Sidebar: Will Online Marketplaces Displace Online Stores?

Online marketplaces will host your company's entire catalog and give you wide visibility within your industry. Once the leaders are established you can't afford NOT to be represented in your industry's key marketplace. Do you really need to spend the money to also build and maintain a standalone e-commerce capability on the Web?

For most companies, I believe you DO need your company's own standalone online store. These are the reasons:

1. In vertical marketplaces, the marketplace owns the customer, you don't. But competing head-to-head with similar companies makes winning business more, not less, expensive. Your goal is to be seen by new customers in the marketplace, but then encourage your new customers to make their purchases through your own online interface. You can offer lower prices to your customers there, since you don't have to pay commissions to the marketplace owners. And it helps you build a one-on-one relationship that can benefit both businesses.
2. Your company's products may span several industries. You can't afford to join every marketplace, only the one or ones where you do the most business. Your own standalone e-commerce site allows you to make smaller sales to customers who find you on the Web. Example: If you sell gloves that are used in a number of industries, you'd be better served by having your own website. But if you sell ball bearings exclusively to the automobile industry, you may not have as much need for your own e-commerce capability.
3. All businesses can't be expected to shop in marketplaces. Many will locate what they need using search engines. If you sell in small or wholesale quantities to other business users, a standalone online store will probably benefit you significantly. If you sell what are essentially commodities in large quantities to single buyers, then a marketplace site may benefit you more than your own standalone site.

Some B2B Online Stores

In looking around for standalone B2B e-commerce sites, I ran across these: Most of these examples sell products to end users that are businesses, but not all provide special interfaces for large corporate sites.

Dell Computer http://www.dell.com is the industry leader in PC computer sales direct to large corporations, small businesses, and consumers. Dell does it all from their website as well as printed catalogs. Larger customers have their own webpages where divisions can purchase authorized computer configurations at negotiated prices. Add-ons are a big part of Dell's sales to end users. Their interface gives the price of the basic unit, and then asks customers to make selections of a dozen or more options that can be upgraded to a better product than the standard offering. Dell began using direct sales, so it had no distribution chain to alienate. But other computer companies are struggling to compete and at the same time keep their distribution chains intact.

Grainger.com http://www.grainger.com distributes MRO (maintenance, repair, and operations) merchandise for vendors whose products are displayed in the pages of Grainger's famous catalog. In the current version of the site, scans of the actual catalog pages provide information for buyers, rather than separate text and graphics like most online catalogs. On Grainger's site you can apply for an open account, or use a credit card or procurement card.

Office Max http://www.officemax.com is a retailer, essentially adopting a distributor position on the Web. Targeting small to medium size offices, as well as home offices, they see their brick and mortar stores as a distinct advantage. Orders placed online are delivered by the local store the next business day, free within the trade area for orders of $50 or more. Customer service is also provided by the local store. Sales tax is charged on all products, and businesses can use either a credit card or apply for an open billing account.

Plantronics http://www.planatronics.com is a telephone headset manufacturer headquartered in Santa Cruz, California. They sell high priced, high quality headsets directly from their online store through a distributor. They also sell through a well-developed distribution chain that includes both brick and mortar distributors, retail stores, as well as other online stores. I didn't see a place on their site for their retailers to place orders.

You can find a number of small B2B stores using Yahoo! Store. Take a look at the kinds of companies that have set up stores. http://shopping.yahoo.com/stores/business_to_business/

Bottom line: marketplaces do not render standalone B2B e-stores obsolete. You can reap significant advantages from your own store. But marketplaces can provide small businesses visibility and an additional sales channel.