Transactions carried out between businesses are known as business-to-business (B2B) transactions. In Japan, there are various marketplaces used for B2B transactions. Unlike online shops where retailers sell to individual customers—often called business-to-consumer (B2C) transactions—B2B marketplaces focus on transactions between businesses. This can include transactions between manufacturers and wholesalers or wholesalers and retailers.

In this article, we review the basics of B2B marketplaces, including their advantages and disadvantages. In doing so, we also provide some success stories of B2B marketplaces in Japan and other countries.

What’s in this article?

• What is a B2B marketplace?
  
• What are the advantages of a B2B marketplace?
  
• What are the disadvantages of a B2B marketplace?
  
• What are some successful B2B marketplaces in Japan?
  
• What are some successful B2B marketplaces in other countries?
  
• Considerations when choosing a B2B marketplace
  
• Finding the best B2B marketplace for your business
  

What is a B2B marketplace?

The term “B2B” refers to any transaction conducted between two or more businesses. Examples of B2B transactions include the sale of parts and materials to manufacturers and the sale of equipment to offices, such as computers and software.

A marketplace is an ecommerce service that connects sellers and buyers of products online. Therefore, a B2B marketplace is a digital platform that connects sellers and buyers, providing a location where they can easily interact. This makes B2B marketplaces different from ecommerce malls—such as ZOZOTOWN or Rakuten Ichiba—which focus on B2C activity.

What are the advantages of a B2B marketplace?

Here are some benefits of using a B2B marketplace to sell products:

Promote your business

A B2B marketplace allows you to sell products online and is not limited by location. Compared to physical stores, more businesses can find out about your products through an online B2B marketplace. By widely publicizing your business, you could increase the number of sales and improve sales overall.

Eliminate the need for a physical store

With a B2B marketplace, you don’t need the face-to-face customer service of a brick-and-mortar store. As a result, there is no need to pay rent for a physical storefront or hire a storefront staff. This can reduce the overall cost burden and allow you to get up and running quickly.

Gain the trust of business partners

B2B marketplaces typically have strong security measures in place to protect customers’ personal information. Additionally, when a business operator joins a B2B marketplace as a supplier, they must pass a preliminary screening process. In other words, buyers will not do business with suppliers who have not been pre-approved, which could give buyers some extra peace of mind.

Manage inventory and sales more easily

In general, B2B marketplaces provide a centralized inventory and sales management system for sellers. Part of the support systems site hosts offer include services that provide advice on monetization and sales promotion. This can also include a manual and help desk for shop owners.

What are the disadvantages of a B2B marketplace?

In spite of their advantages, B2B marketplaces do have some downsides, including:

Competitive pricing

B2B marketplaces gather a wide range of products from various businesses. Having many products in one place makes it easy for buyers to compare costs. For sellers, this can lead to increased price competition with other businesses selling similar items.

If there are many competing businesses selling the same item at a lower price, some products might not sell well, and businesses might have to lower prices further.

Lack of customization

It might be difficult to differentiate a business from its competitors who sell similar products. B2B marketplaces use the existing features and designs marketplace owners provide, so there is less freedom in terms of design and functionality. This could make it difficult to stand out. Unlike an ecommerce site designed specifically to reflect a business’s brand and individuality, presence on a marketplace could lack a brand’s originality.

Increased language and cultural support

Due to recent globalization trends, B2B businesses must be able to provide services in multiple languages, even B2B businesses operating in Japan. When Japanese businesses conduct B2B transactions on cross-border ecommerce marketplaces, they need to provide products and services that have been appropriately localized. This should be based on a thorough understanding of the other country’s culture. To do this, it is important to create a business plan that considers expansion outside of Japan, including securing in-house personnel who can handle multiple languages.

What are some successful B2B marketplaces in Japan?

Here are some of the major B2B marketplaces operating in Japan:

ASKUL

ASKUL—a B2B marketplace with a high profile among Japanese businesses—offers a wide range of products for various business needs, including stationery, office supplies, and office furniture. The business name is a play on the Japanese words that mean “coming tomorrow,” referring to orders being dispatched and delivered quickly. ASKUL also carries over-the-counter health supplies, including stomach medicines and bandages, which are important for first aid in the workplace.

MonotaRO

MonotaRO is a B2B marketplace that focuses on industrial supplies, such as cutting tools and abrasives. The company describes itself as “the online store that supports the workplace.” It also sells equipment and tools for manufacturers and construction businesses. One of its unique features is the ability to purchase products at wholesale prices. MonotaRO also handles office supplies, everyday items, niche items, and general office supplies.

MISUMI

MISUMI is a B2B marketplace that sells machine parts and tools used in the manufacturing industry. MISUMI does not offer components used in the manufacture of smartphones and automobiles. Instead, it provides the parts and components found in the factory equipment and devices that make these parts. These components are sometimes called “indirect production materials.”

MISUMI offers a wide range of products and can ship orders as quickly as the same day. The company also has many suppliers and buyers in Japan and overseas. The site is developing a global business that supports multiple languages in addition to Japanese, including English.

What are some successful B2B marketplaces in other countries?

Here are some B2B marketplaces from outside Japan that have achieved commercial success:

Alibaba

This marketplace is often referred to as “the Chinese version of Amazon” because of its massive scale. Alibaba’s mission is to “make it easy to do business everywhere.” The service is primarily aimed at Chinese manufacturers, but it also provides a digital platform for comprehensive B2B transactions. It is used by many buyers and sellers around the world.

Amazon Business

Amazon Business is a B2B marketplace in the US run by Amazon. It offers hundreds of millions of office-related products and office supplies. Unlike private individuals, business customers can settle their accounts by invoice rather than making separate purchases. Business Prime members receive free delivery, making it easier to order smaller quantities.

IndiaMART

IndiaMART is the largest B2B marketplace in India. The company is focused on creating a lively marketplace by forming a network of businesses. This includes two-way discovery via email and text messages. The company also offers a free payment protection program—called IndiaMART Payment Protection—to ensure a safe environment for customers.

Considerations when choosing a B2B marketplace

Here are some key points for manufacturers and other sellers to consider when choosing a B2B marketplace:

Functionality and support

Functionality and support vary from one B2B marketplace to another. B2B businesses should select a marketplace that has the services they need. There might be additional fees for certain features, so it’s important to check carefully before making a decision.

Number of buyers

Well-known marketplaces have many existing customers looking for various products. On these sites, it could be relatively easy to attract customers. If a business is using a marketplace for the first time, it might want to consider opening a store or listing items on well-established marketplaces.

While flash sales and seasonal campaigns (e.g., Black Friday, Cyber Monday, year-end sales, etc.) are often used for B2C marketing, it is a good idea to check whether a B2B marketplace actively pursues sales promotions that can increase customer traffic.

Payment methods

Some marketplaces limit the payment methods available to buyers. For example, some only allow bank transfers after a monthly invoice has been issued. If the desired payment method is unavailable, the buyer might not make the purchase, even if the product is available. This can result in potential customers being lost to competitors on other B2B marketplaces.

When selecting a B2B marketplace, businesses should choose one that supports a wide range of payment methods. This is convenient for both buyers and sellers. Sellers can see what payment methods customers use most often, providing a better understanding of payment trends. This can be useful for future business strategies.

If you are a business owner looking to expand your business into other countries, flexibility in accepting payments—especially the ability to accept cashless payments both within and outside of Japan—could help you increase the number of customers in the future. Stripe is a payment processor that builds and delivers online payment infrastructure. Stripe is used by many marketplaces to process payments.

Stripe Connect is a payment tool tailored for businesses that have complex financial transfer needs, such as software platforms and online marketplaces. It allows businesses to efficiently manage payments with multiple partners and offers a number of functions such as sales distribution, fee collection, and support for international transactions.

Finding the best B2B marketplace for your business

In this article, we introduced the advantages and disadvantages of using a B2B marketplace for supplier businesses, including some Japanese examples.

B2B marketplaces connect buyers and sellers, serving as locations to facilitate and simplify transactions between businesses. They also provide a way for sellers to reduce the cost of physical stores and quickly open new stores.

On the other hand, B2B marketplaces can experience intense price competition and must accommodate different cultures and languages when involved in doing business with countries outside of Japan. To perform well in a B2B marketplace, the key is to discover ways to overcome these issues. You should also identify the most suitable marketplace for your business after considering cost, safety, and convenience.