In the digital transformation era, B2B businesses have dramatically evolved in response to new and emerging technology.
One of the most impactful technology trends is the emergence of online marketplaces. Amazon has perfected the business model and its success made the online marketplace approach to eCommerce a viable option for businesses across the globe.
An online marketplace is a website that aggregates sellers and facilitates shopping from many different sources. The operator of the marketplace itself does not own any inventory, and their business is to act as the middleman by connecting buyers and sellers to facilitate sales.
The inherent concept that makes an online marketplace, a marketplace is that there is an operator that exists as the intermediary in the middle of buyers and sellers. While many businesses think of online marketplaces as a way to extend their products into existing marketplaces, there are other ways to take advantage of the business model.
Franchises and multi-location retailers have the unique opportunity to take advantage of the online marketplace business model to create a private online marketplace for their franchise and retail locations.
The primary objective of an online marketplace is to streamline complex business processes and drive efficiencies. A common challenge that many franchises and multi-location retailers face is managing vendor and supplier relationships and facilitating the purchasing processes for their franchise and retail locations.
By creating an online marketplace, a franchise or multi-location retailer can eliminate the need for that business practice by connecting vendors and suppliers directly to their franchise and retail locations via an eCommerce platform.
Here are the 3 Online Marketplace Benefits for Franchises and Multi-location Retailers
1. Supplier Consolidation and Control
The most obvious benefit of creating an online marketplace for franchises and multi-location retailers is to evaluate and consolidate all of their suppliers and distributors. B2B businesses often have a hard time managing their supplier network. Since locations are usually spread geographically, it’s not uncommon to end up having a vast and inefficient supplier network.
By taking a marketplace approach to eCommerce, multi-location retailers and franchises are able to take note of suppliers and consolidate unnecessary contracts.
Additionally, connecting suppliers directly to the franchise or retail locations allow for better pricing, a more efficient supply chain, and reduced shipping costs. Suppliers have a better view of inventory in real time and as a franchise or multi-location retailer, you are able to spend less time facilitating purchases.
2. Streamline Complex Ordering
Online marketplaces, like any eCommerce platform, gives franchises and multi-location retailers greater control over complex ordering. With online marketplaces, you are able to create custom and complex workflows for your franchise or retail locations.
Since all of the ordering is done on the online marketplace platform, you can create rules and views that reflect up to date pricing, limited visibility for items that are available for only certain locations and set budgets and manager approval rules.
The benefit to taking advantage of an online marketplace approach to supply chain management is that while you can control how orders are placed, the platform takes care of getting the correct orders to the correct suppliers and distributors.
3. Higher Visibility and Analytics
By creating an online marketplace, you are gaining visibility to valuable purchasing data at real time. Increased data isn’t only important for evaluating how you’re doing as a business, but also making future decisions about things like inventory and marketing.
Because an online marketplace is digital, you will always have access to real-time inventory. You’re able to see which franchise or retail locations have placed orders and are up to date with the materials they need and are required to have to run their businesses.
From a marketing perspective, online marketplaces make it easier to ensure that your brand is consistent across all of your locations. It’s easy to use your online marketplaces as a way to communicate new promotions, updated marketing materials and other general marketing announcements with franchise and retail locations since you know they are going to the site to place orders.
Ultimately, an online marketplace approach to eCommerce for franchises and multi-location retailers can provide game-changing supply chain management results. It can help streamline ordering and facilitate greater supplier management. Four51 has experience creating online marketplaces for franchises and multi-location retailers. If you’re looking to get started, contact us today.