B2B marketplaces: the fastest-growing B2B ecommerce trend

B2B marketplaces are becoming part of mainstream ecommerce. Collective sales on them grew 130% year over year in 2021 to $56 billion, according to an estimate by Digital Commerce 360.

Marketplaces have been in existence for more than 20 years, but the commercial and vertical marketplace platforms that bring together groups of buyers and sellers in a digital sales channel have played only a minor role in ecommerce—until now.

As the global COVID-19 pandemic marches into its third year and continues to produce major supply chain trouble for many manufacturers, distributors, and others, more organizations are latching on to marketplaces to buy and sell goods and services.

Today, B2B marketplaces, driven by the dominating presence of Amazon Business and the proliferation of scores of marketplaces springing up to serve numerous vertical markets from healthcare and automotive to chemicals and agriculture, are part of the mainstream of ecommerce.  To say more, B2B marketplaces are red hot and getting hotter.

B2B marketplaces also are the fastest-growing digital sales channel. For 2021, Digital Commerce 360 projects that the collective sales on B2B marketplaces grew 130% and totaled $56.0 billion, compared with a projected $24.34 billion in 2020. Last year, B2B marketplaces sales grew 7.3 times faster than total B2B ecommerce sales.

Market players

Amazon Business remains the dominant force in driving B2B marketplace sales higher and is moving quickly to become a more dominant company in B2B ecommerce.

Amazon Business could generate $31 billion in gross merchandise volume this year, and accelerate to as high as $83 billion as soon as 2025. Today, Amazon Business accounts for about 1.9% of U.S. B2B ecommerce sales which could amount to 10% by 2025. Last year, the gross merchandise volume on Amazon Business represented 55.4% of all B2B marketplace sales of $56.0 billion.

But even with the big shadow cast by Amazon Business, vertical marketplaces continue to proliferate and attract serious money from Wall Street investors.

For instance, Xometry, which raised more than $300 million in an initial public offering of stock in July 2021 is ready for mammoth growth by acquiring for $300 million the B2B marketplace company Thomas, which operates Thomasnet.com with more than 1.3 million registered users. Thomas’s client base includes such organizations as manufacturers General Electric Co., Johnson & Johnson, Lockheed Martin, and Eaton Corp.; distributor W.W. Grainger Inc.; the National Aeronautics and Space Administration; and the U.S. departments of defense, transportation, and homeland security. Thomasnet hosts more than 500,000 commercial and industrial sellers.

Xometry and Thomas share a common mission of championing the digital transformation of the manufacturing industry, one of the largest sectors of the global economy and the foundation for innovation everywhere. Thomas will help Xometry “introduce new services, cross-sell to our combined base and expand our suite of products, particularly in fintech and digital marketing.”

Another example is Bay Supply, an industrial distributor from Farmingdale, New York, selling a wide array of fasteners to big and small companies since 1961. The company is rolling out a new marketplace on BaySupply.com to bring together buyers and sellers in rather fragmented and outdated fastener industry.

Sourcing fasteners requires an incredible amount of time and research online, and the current process just doesn’t make sense for anyone in the supply chain anymore.

The marketplace was designed and launched in conjunction with McFadyen Digital, an ecommerce and marketplace consulting firm. The marketplace was a new extension of Bay Supply’s Magento ecommerce platform. Bay Supply will collect 9% of each completed transaction on the marketplace.

The timing is right to launch a B2B marketplace and there are companies uniquely positioned to do so.