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How to Build a B2B Marketplace Website Like Alibaba

Business Model, Revenue Model, B2B Marketplace Development

By Akanksha ChandanPublished 2 years ago 7 min read
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What is Alibaba.com?

Jack Ma (a former school teacher) and his 18 tech pioneers had a dream of building a B2B eCommerce marketplace that connected Chinese manufacturers, retailers, distributors to buyers worldwide. They created Alibaba – a globally connected and competitive ecosystem where more manufacturers attracted more buyers, and vice versa. Soon, Alibaba became a household name in China, generating significant traffic on the website both from within China as well as around the world.

Launched in 1999 by Jack Ma, Alibaba is the world’s largest B2B eCommerce marketplace headquartered in Hangzhou, Zhejiang China. It connects over 150K suppliers with 10 millio

n+ buyers in 190+ countries, as shared on alibaba.com.

Other Popular B2B Multi-vendor Marketplaces

Apart from Alibaba, there are many other popular B2B marketplaces leading the digital landscape. Below we have listed the top 4 B2B marketplaces other than Alibaba:

Amazon Business – A B2B ecommerce platform by Amazon.com launched in 2015. Amazon Business is a thriving marketplace available in 9 countries. It is estimated to reach $75 billion by 2023.

eWorldTrade – Over 500,000 registered users, more than 100 categories, and a global presence makes eWorldTrade one of the popular marketplaces for B2B eCommerce.

IndiaMart – With over 60% of the market share in India’s B2B eCommerce space and 25 years of existence, IndiaMart is one of the most reliable B2B marketplaces connecting buyers with suppliers.

Global Sources – One of the oldest/earliest B2B platforms based in Hong Kong, Global Sources registers over a million monthly active users. It conducts online trade events to enable vendors to fulfill their business potential.

And more.

Business and Revenue Model of Alibaba

In 1979, the Chinese government implemented free-market reforms (an open market) opening up foreign trade and investment opportunities in the country. This potentially untapped large pool of workers to foreign businesses, thus making China a popular offshore destination for manufacturing firms. But, rigid Chinese investment policies meant that companies looking to make use of such opportunities should form a joint venture with Chinese partners. While the policies were intended to help Chinese retailers and entrepreneurs, developing such long-lasting relationships was difficult because

  • Only those foreign companies with enough funds could sustain such ventures
  • Small-medium businesses and entrepreneurs in China had little recognition to be considered as partners

With Alibaba, Jack Ma and his team created a smart, reliable, & interconnected B2B ecosystem for Chinese businesses to interact and perform business operations with foreign traders. In return, Alibaba earns its revenue from offering annual subscriptions for sellers.

How does Alibaba make money?

Alibaba acts as an intermediate between sellers and buyers charging commission to vendors on each transaction. While commission per transaction is an important revenue channel for Alibaba.com. This isn’t the only revenue channel through which they earn. The marketplace earns revenue from Gold membership plans.

Alibaba offers two supplier membership plans – Free and Gold. Under the free membership plan, sellers are not verified and can only list up to 50 products. On the other hand, Gold Supplier is a premium membership for suppliers to easily promote their products and maximize ROI. All Gold suppliers must pass a rigorous verification process by third-party agencies to earn a verified badge that generates trust. Moreover, all Gold members pay a commission fee per transaction.

Alibaba offers multiple seller plans for businesses to become Gold members and reach millions of B2B buyers globally. There are separate pricing plans for every country. For instance, there are 2 plans – Plus ($3,499 /year) and Pro ($10,799 /year) for sellers in the US. Similarly, for UK sellers – there are 3 pricing plans namely; Basic Plus ($2,999 /year), Standard ($3,999 /year), and Premium ($5,999 /year). While the plans and pricing may differ, all plans include several platform features (such as unlimited products, access to trending keywords, reporting tools, etc), customer service, and support for onboarding.

How to Build or Create an Online B2B Marketplace like Alibaba?

There are many reliable ways to create a B2B eCommerce website like Alibaba. Depending upon your requirements, you can choose one that suits you best.

Code Yourself – Developing an eCommerce marketplace demands critical designing and development skills such as creating a seamless front-end design, use of accurate theme colors, implementing all essential eCommerce features, integrating third-party APIs, and more. Website development requires a lot of coding skills and consumes a lot of time/effort, which may delay your website launch.

Hiring developers – Another way is to hire skilled developers to build a completely personalized eCommerce marketplace from scratch. You can either hire an in-house team for all development needs or outsource your development needs to custom eCommerce development firms like FATbit Technologies. Either way, building an eCommerce marketplace from scratch will consume hundreds of thousands of development hours.

Readymade B2B eCommerce platforms – While development from scratch seems a good choice, more often than not, this isn’t a viable solution. Since each business decision has wide-ranging implications, it is critical to invest your resources and effort smartly. Choose a turnkey eCommerce platform with all essential features that empower your business to centralize operations, accelerate transformation, and reduce time-to-market. Yo!Kart B2B, Shopify Plus, BigCommerce B2B – these are some of the most popular B2B eCommerce solutions.

How to Choose the Right B2B E-commerce Platform?

While a readymade B2B eCommerce platform significantly reduces launch time yet, you must identify and choose the right platform that clearly aligns with your business strategies. There are many key parameters that can be considered during the selection process. Below we have listed a few essential considerations for business owners:

Scalability – Amid consistently changing consumer behavior, evolving technological parameters, and accelerated digitization; it is important to choose an eCommerce platform that ensures scalability and long-term growth. Scalability in B2B means staying future-ready with access to the right resources, to automate processes and swiftly accommodate growing demands.

Personalization – A customizable platform helps deliver tailored experiences to your customers, propelling growth. For instance, the ability to personalize and offer customer-specific pricing or restrict access to hide bulk pricing for guest customers improves the user experience. A customizable platform ensures personalization, improves branding, and greatly increases user engagement leading to more conversions and repeat customers.

Ease of Use – Processes in B2B commerce are often complex involving bulk transactions, partial payments, recurring business orders, and more. This is why most B2B platforms offer several advanced features (such as Request for Quote (RFQ), Bulk discounts, etc) to streamline negotiations and facilitate B2B transactions. While these features do add value, they shouldn’t come at the cost of convenience.

Flexible Payment Options – Unlike traditional B2C commerce, the transactions in B2B trades are much higher. These transactions often involve bulk purchases on a recurring basis instead of once-off smaller purchases. Hence, the ability to pay partially and via preferred payment method (including COD) is a must-have feature for a B2B eCommerce platform.

Trusted and Reliable – A trusted and well-recognized eCommerce platform is one that is widely popular among entrepreneurs, SMBs, as well as large-scale enterprises. Often the quality of projects delivered, worldwide clientele, and ratings on popular review sites can be a good indicator to help you decide. Look for reviews on sites like G2/Capterra, browse through their existing/past projects, and check for complete details on the platform before making an investment.

Essential B2B eCommerce features – Minimum order quantity, bulk pricing/discount feature, Request for Quote module, and multiple payment options are some of the essential eCommerce features for a B2B marketplace. Before you decide on your B2B marketplace solution, make a checklist of all essential eCommerce features on your selected platforms and compare. This will give you a better idea.

Conclusion

Millions of B2B brands are eyeing opportunities in the digital space to capture the growing eCommerce market segment with a global valuation exceeding trillions of dollars. The potential opportunities are tremendous for a B2B marketplace looking to start/scale operations. Choose Yo!Kart B2B Marketplace Software – a turnkey, secure, and feature-rich B2B eCommerce platform to launch a scalable B2B eCommerce website like Alibaba. The multi-vendor platform powers many popular B2B marketplaces like UNI Diamonds, Bozinga.com, and more.

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Originally published at https://www.yo-kart.com/blog/

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Akanksha Chandan

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