After transforming consumer retail, hospitality and travel markets, digital marketplace are now reshaping industrial markets and supply chains. Experts say the upheaval of traditional business models is inevitable, but the disruption offers companies across the B2B supply chain a unique opportunity to expand their reach and create innovative new customer experiences.
On October 24, 2017, the share prices of several Fortune 500 industrial supply companies dropped as much as 5%, even though the NYSE and NASDAQ indexes remained essentially flat.
What happened? According to investment analysts, the decrease occurred due to the launch of Amazon Business, which provides Prime’s unlimited fast delivery to Amazon’s business customers. As an online B2B marketplace, Amazon Business provides a software platform that enables buyers and sellers to connect and do business. The platform is the facilitator; the transactions are essentially peer-to-peer.
Amazon Business shifts inventory and logistical duties to participating suppliers, cutting its costs and increasing its agility. It’s a model the world’s largest B2B marketplace platform, Alibaba, adopted from inception, allowing it to carry zero inventory on its own balance sheet, much as Amazon pioneered with books.
The marketplace model allows these companies to grow at a pace and scale that companies with heavy inventory, facilities and logistics investments cannot. This enormous capacity to scale, plus a compelling user experience, have enabled these marketplaces to disrupt sector after sector.
Altered customer expectations
The disruptive nature of business-to-consumer (B2C) and consumer-to-consumer (C2C) marketplaces is well-documented in hospitality (Airbnb, Wimdu), travel (Booking.com, Ctrip), financial services (M-Pesa, PayPal), transportation (Uber, Lyft), and retail (eBay, Tmall).
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