“Collaborative commerce” may sound like a new term, but it certainly isn’t a new concept. It’s a vision for sustained growth and innovation that many digital businesses aspire to achieve, especially in today’s competitive business environment.
Engaging in collaborative commerce means coming together with all of your commerce constituencies — suppliers, partners, distributors and even competitors — to deliver more value to customers and achieve better business outcomes in the process.
One of the most important proof points for the power of collaborative commerce is the success of online marketplaces. Launching a marketplace enables a business to offer complementary products and entirely new product categories from third-party sellers, including competitors. Today, marketplaces make up around 50% of online sales globally.
Marketplaces give both direct-to-consumer (DTC) and B2B companies opportunities to collaborate with other companies so everybody wins. Here’s what you should know about opportunities in this growing space.
The Benefits of Launching Your Own Marketplace
No matter whether your company sells to business buyers or consumers, adopting a marketplace business model offers a range of benefits. It lets you capture incremental sales without losing control of the customer relationship and experience. It enables you to quickly expand product assortment without the cost and risk associated with owned inventory, logistics, fulfillment and customer care.
It also offers opportunities to test new products, explore new markets and attract new customers by leaning on third-party suppliers and drop-ship partnerships for inventory and fulfillment.
Collaborative commerce through marketplaces also offers some opportunities specific to DTC or B2B companies. DTC companies benefit from the ability to:
- Secure a greater share of wallet by selling complementary products that customers would have purchased from a competitor.
- Increase customer loyalty and lifetime value by becoming the one-stop-shop for everything customers need at competitive prices.
- Gain deep customer insights into behaviors, buying trends, pricing, brand awareness, and more, for a huge advantage in identifying new business opportunities.
B2B companies benefit by being able to:
- Gain inventory visibility and price transparency across the network of dealers and distributors.
- Understand end-customer behavior, preferences and buying patterns.
- Manage suppliers more effectively through a self-service portal.
If your organization operates in the B2B space, launching a marketplace can also enable you to sell directly to customers by teaming up with your network of distributors, dealers or franchisees to offer frictionless buying. This also helps you gain inventory visibility and price transparency across your network of dealers and distributors, and also gain visibility into end-customer behavior.
Collaborative Commerce Is the Future
To fuel business growth, companies must embrace their ecosystems of suppliers, distributors, franchisees and even competitors — just like Amazon did with its marketplace. Collaborative commerce is the growth and innovation engine of today and tomorrow — and launching your own marketplace is an ideal way to get started.
A marketplace business model gives leaders the flexibility to take their ecommerce business in new directions and scale beyond the limitations of their own operations, generating incremental revenue with little investment and business exposure.
Amit Shah is chief strategy officer at VTEX.