With estimated revenues of over $7 trillion a year, small businesses have an unmatched purchasing power that everyone who sells goods or services should consider tapping into. And that means you too. One of the most convenient ways is through online marketplaces, which have become the de-facto targeted marketing centers for small businesses.
As the number of small businesses increase and their purchasing power becomes more evident, marketplaces provide a valuable outlet for both selling and purchasing necessary services and products at a premium. Online marketplaces also allow entrepreneurs to access the purchasing power of other businesses by simply signing up, creating a profile for their company and putting their products and services online – available for purchase 24/7.
If you aren’t already familiar with online marketplaces, here are four things you should know:
1) What is an online marketplace?
An online marketplace is a web-based forum where the marketplace operator processes transactions and then delivers the participating retailers or wholesalers fulfill the orders. These can include businesses such as office supply carriers, wireless communications providers, car rental companies and more. Because marketplaces carry products from a wide variety of vendors, they offer greater availability of a wider selection at prices that stand-alone vendors can’t afford to offer.
An online marketplace may be open to the general public, or closed. This means you may have to be a customer or member of the parent organization, such as a credit card company, to take advantage of the marketplace. Both kinds of online marketplaces help your business drive growth through access to new customers. In addition, they deliver savings through discounts on services offered at prices typically only associated with purchasing power of big businesses.
2) Why are marketplaces helpful?
There is an inherent trust factor when you sign up for a closed marketplace. For example, if you are a member, you can assume that the other businesses have similar interests, concerns and values. If the marketplace is regional in nature, you can support your local economy by promoting and buying from businesses in your area, which in turn can help your own bottom line.
3) Should I join an open or a closed marketplace?
With membership available to everyone, open marketplaces are accessible to hundreds of millions of potential customers. On the flip side, because the customer base is so broad, many of those marketplace users may not be relevant for your business. The advantage of a closed marketplaces is that is has a more focused audience with specific interests or needs, such as a marketplace just for technology, health or construction companies.
4) How can I find the right kind of marketplace?
Look at organizations you do business with – such as health, human resources, government, technical companies etc. Find out if they belong to existing online marketplaces or if they created their own. Then decide whether or not the marketplace is right for your business:
- Is the marketplace opened or closed?
- What type of audience does that marketplace reach, especially a closed one?
- Are the other businesses on the marketplace, either buyers or sellers, going to help my business?
- What is the size of the marketplace and are there fees for membership or listing my products?
- How will my business benefit from promoting my products/services in the marketplace?
- Will it deliver ROI?
There are a lot of marketplaces out there, so it’s good to comparison shop. Either way, they’re worth a look. Marketplaces can offer your company a new way to tap into the purchasing power of other small businesses, while at the same time letting you access a new channel to communicate with your current customers.