Last updated: E-commerce for auto suppliers: Marketplace model transforms industry

E-commerce for auto suppliers: Marketplace model transforms industry


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Global economic trends and B2C e-commerce are transforming business-to-business (B2B) online buying. Industries that might’ve never considered themselves to need digital commerce are now realizing how critical it is – and the use of the marketplace model by visionary e-commerce auto suppliers is a great proof point around this topic.

In response to changes in the dynamic business environment of today, organizations are deploying their own marketplace solutions to streamline and scale B2B e-commerce instead of relying on solutions from the big retailers.

What is the marketplace model: Definition

The marketplace model harnesses the power of digital platforms and sales for sellers, connecting them with buyers. Brands use the marketplace model to reach customers who want to buy certain products or services – traditionally, the marketplace hasn’t sold their own products, but that’s changing, as evidenced by Amazon.

The marketplace model is also called:

Enterprising brands are starting their own marketplaces – and while it’s no small undertaking, the benefits and potential are massive.

Benefits of the marketplace model: Boosting e-commerce auto suppliers – and other B2B industries

Using the marketplace model within your own brand or platform offers a host of benefits for companies, including:

  1. Taking control of the full customer journey
  2. Using enterprise data to understand customers better
  3. Driving growth without channel conflict
  4. Offering more-engaging online experiences

Simplifying things: Defining variations of the marketplace model

The marketplace model features advanced software, technology, and best practices to help simplify supply chains and increase profitability.

And with supply chains that span oceans, skies, and continents, holistic e-commerce for auto-suppliers is becoming more and more critical by the day.

Here’s a brief breakdown of what the terms around marketplaces mean:

  • Horizontal: Broad coverage with something for everyone, like Amazon and Amazon Business
  • Vertical: Narrow target market within a single industry, with optimal purchasing conditions for a small set of buyers, like Wayfair
  • Digital goods: Products transferred electronically, such as iTunes + Shutterstock
  • Niche: More limited than the vertical model, covering a specific product category, such as StubHub
  • Services: Focused on pure service offerings – think Uber and Airbnb

To determine which option or combination of options is the best fit for your organization, you need to assess the relative strengths and weaknesses of each approach.

To make this assessment, first it’s necessary to identify your strategic goals, like:

  • Launching new products or services
  • Growing revenues
  • Acquiring new customers
  • Increasing operating and profit margins
  • Positioning and differentiating for a competitive edge
  • Acquiring sellers

Real-world examples: The marketplace model in action

Leading enterprises across industries are putting the marketplace model and its variations into action.

Here are some real-world use cases that illustrate what’s possible:

  1. Combine the horizontalvertical options to enhance experiences and provide one-stop shopping for your customers. With a holistic solution and hybrid approach, you can increase web traffic and expand e-commerce activity. You can grow product catalogs and assortments, improve promotions, and conversion rates – and smooth and speed supplier onboarding to help make it all happen.
  2. The niche model is ideal for meeting the global supply chain challenges of extremely complex product offerings with a high number and variety of components and parts. You can fend off retail competitors by creating a digital ecosystem and third-party marketplace that make it easier for customers to find what they need. At the same time, you can control inventory levels and costs while managing and optimizing multiple supplier relationships.
  3. Go vertical to eliminate manual, outdated sales processes, such as phone calls and offline transactions, and bring e-commerce to a previously untapped part of your market. And by digitalizing buying, you can improve visibility into markets and segments and offer retail-grade experiences. Crucially, a digital marketplace approach helps you avoid conflicts with existing channels while improving product delivery times and assortments – as well as customer acquisition, satisfaction, and sales.

Learn more about how the accelerating pace of e-commerce has changed B2B buying and see examples of what companies in the automotive and other industries are doing.

Moving your industry or organization down the road of digital transformation requires structured frameworks and playbooks, but it’s worth it once you arrive at your destination.

Rev up revenue + customer loyalty.
Discover how digital tech is transforming the auto industry HERE.

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