The term B2B Marketplace simply refers to Business to Business Marketplace where a business purchases inventory from another business. The biggest B2B marketplace in the world is www.alibaba.com, and everyone B2B marketplace is trying to copy or improve what Alibaba has accomplished over the years. Due to the network effect, Alibaba is able to attract more businesses to its platform. Since Alibaba is also profitable, Alibaba can deploy more cash in technology and marketing. Having said that, there are multiple issues with model of Alibaba. Alibaba is not so strong in India, and there is scope for multiple players to serve niche segments.

There are primarily three types of B2B marketplaces.

a. Lead Generation Marketplaces – For all practical purposes, http://www.indiamart.com is biggest player in this space. These guys get leads from business on their platform, and distribute the leads to businesses who are providing the service or product requested. Let’s say you are a tire manufacturer, and you need rubber. You can put your quote at Indiamart, and you would receive multiple quotes from different vendors. In this space, the winner takes all, and few niche players can survive for a while.

b. Lead Generation, Logistics, and Payments – These players not only provide leads, but they also provide logistics and keep funds in their escrow account. Alibaba is the biggest player in this space, and they are doing a fantastic job.

c. Lead Generation, and Fulfilment – These players do not expose the other side ( sellers ) to customers, and these players ensure that 95% or more of the order requests are delivered to their customers. These guys try to work with Just-In-Time inventory model, and they keep inventory purchased from sellers for few hours in their own warehouse. Most B2B marketplaces do not want to build warehouses, but they want to deliver inventory in 24 hours or less. The TAT between delivery time and order request is critical metric in this space.

We at LOANMEET ( LoanMeet | Inventory Financing | Working Capital Loan | Peer to Peer Lending India ) provide Invoice discounting and working capital loans to both sellers and customers of B2B marketplaces. If you are running a B2B marketplace and you want to provide credit to your customers who place orders, please reach out to us at LoanMeet | Inventory Financing | Working Capital Loan | Peer to Peer Lending India or 91–7259355400.