A B2B marketplace is a website or app where businesses find suppliers, compare them and ask for prices, and where suppliers find new buyers. It is also called a B2B supplier marketplace or a B2B lead marketplace. Some also run a virtual expo, a trade fair held online, where suppliers set up digital stalls and buyers visit them.
Most B2B marketplaces do not sell the goods themselves. They list the suppliers and their products, and they help buyers contact them. This follows the marketplace model: the marketplace never owns the goods. It earns money from the suppliers, through a yearly subscription for a better listing, or a fee for each enquiry it sends them. Some marketplaces also take the orders and payments, and earn a commission on each sale.
A buyer usually starts in one of two ways. The buyer can search the listings, filter them by city, product and certificate, and contact a few suppliers. Or the buyer can post a requirement, called a request for quotation (RFQ). The marketplace sends the RFQ to suitable suppliers, who reply with their prices.
Imagine a small furniture maker in Jodhpur who wants brass handles for a new range of cabinets. He posts an RFQ: 2,000 handles, 128 mm long, antique finish, delivery in four weeks. The marketplace sends it to 15 brass suppliers, many of them in Moradabad, a city in Uttar Pradesh known for brassware. Within two days, six suppliers reply, with prices between ₹38 and ₹55 a handle. He checks each supplier's ratings, its years on the marketplace and its verification badge. He orders samples from the two cheapest, and places the full order with the one whose sample is better.
Trust is the hardest part. A buyer cannot visit every supplier. So marketplaces verify the businesses that list on them, with know your business (KYB) checks of the GST number, the company registration and the bank account. Even so, buyers usually order samples first.
Virtual expos grew during the COVID-19 lockdowns, when trade fairs could not be held. An event management platform runs the registrations, the digital stalls and the video meetings.
How is a marketplace different from a B2B ordering portal? A marketplace helps a buyer find a supplier that it does not yet know. After the first order, regular orders often move to the supplier's own portal, with negotiated prices and credit.