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What Is Amazon Business, Alibaba and Thomas, And How Can They Help Sell Your Products?

When you are building or assessing your B2B marketplace strategy, your first step should be understanding your different marketplace options. A B2B marketplace is defined as an e-commerce platform third-parties utilize to sell directly to their customers. The difference between a marketplace and distributors or retailers is that the former connects buyers and sellers, while the latter owns the inventory. B2B marketplaces deal with more complex transactions than B2C marketplaces due to specific business needs such as bulk orders, wholesale, order approvals, invoicing, and more. Here are the main players:

Amazon Business

Amazon Business is currently available in France, India, Italy, Germany, Japan, Spain, UK, and the US. Launched in 2015, by 2018, third-party sellers were responsible for over 50 percent of the $10 billion in sales generated on Amazon Business. Many Amazon Business sellers are SMBs utilizing Amazon in order to scale up their e-commerce strategies to reach new geographical locations and target audiences.

New sellers begin by registering through Seller Central to list their products and set pricing. Seller Central has analytics dashboards available to show buyers their inventory, pricing, and sales including trends such as who is purchasing what, when and how often. Sellers must meet customer standards and expectations regarding quality, fulfillment, and delivery to remain in good standing. Buyers making business purchases can buy in bulk and get custom pricing from some sellers. Buyers can utilize “Guided Buying”, which helps admins select preferred brands, products, and suppliers, and account administrators have features such as “Spend Visibility” and “Workflow Approvals” tools.

Alibaba

Launched over two decades ago, the Alibaba.com B2B marketplace was originally designed as a yellow page directory. The marketplace connected Chinese factories with global buyers searching for custom manufactured products. In the last couple of years, it has evolved into a full-scale commerce and sourcing platform that provides a variety of services buyer/seller transaction services, including custom quotes, communication tools, escrow payments, a translation service, and capabilities like diverse shipping and delivery options.

Alibaba announced in the summer of 2019 that SMB sellers in the US could sell to buyers worldwide, which differentiates it from Amazon. It now facilitates the buying and selling of commoditized items and doesn’t own any inventory. Now, instead of being a retailer or distributor, Alibaba.com considers itself a technology company, which creates less competition in search results.

While there is a small credit fee, they do not take a commission on the platform’s transactions. Instead, the company receives revenue from ads that sellers purchase via keyword, geographical locations, or search histories, and charges suppliers an annual membership fee of approximately $1,500.

Thomas

Thomas began as a print directory but evolved into a digital marketplace in 2006. Thomas serves industrial B2B buyers looking for product sourcing and supplier evaluation but doesn’t facilitate the transaction. Thomas provides comparison tools that allow a buyer to locate and compare multiple sources, creates bidding opportunities for more buyer options and transparency, and helps suppliers send custom proposals to prospective customers.

There are approximately 500,000 suppliers using the platform. Thomas users start by creating a free profile and listing and then Thomas monetizes the marketplace through upgrades to paid programs. There are more than 850,000 active registered buyers on the marketplace, three-quarters of whom are SMB buyers, 20%-25% are purchased by OEMS, while 75% to 80% of marketplace sales are by large scale purchasers seeking a custom manufacturer.

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