Last summer the water dispenser in our refrigerator stopped working so we called a repairman to fix it. The issue was straight forward; the filter was broken and needed replacing. It didn’t matter that the refrigerator was 10 years old, the repairman told me, since any part for any appliance is readily available eBay, which is why he doesn’t bother to carry replacement filters anymore. They pop in and out, we could take it from there.
As a B2B distributor, eBay, and more generally digital marketplaces, may not seem relevant to your business, but that’s a mistake. If they’re not part of your selling strategy you’re leaving a lot of money on the table.
The many shades of eBay
Let’s go back in time 20 years and trace the origins of digital marketplaces. The company that invented the whole notion of a digital marketplace is eBay, and the site lit the consumer’s hair on fire. Suddenly a whole range of stuff that had always been hard to find was available at one’s fingertips. Vintage Russel Wright dinnerware, the toy your mom threw out when you went off to college but you still miss, the perfect knobs for your new kitchen cabinets…if you wanted it you could find it.
After a decade, though, eBay lost some of its luster. Newer, shinier marketplaces, like Amazon and Alibaba, caught the consumer’s attention. But eBay is, and always has been, going strong. In 2018, the company had gross merchandise volume (GMV) of $24.6 billion. That’s a lot of sales … who’s doing all that buying?
Ebay’s main play right now — the place where they’re still killing it in 2019 – is B2B. The site is a dominant player for every single part, bit or bob that exists in the automotive, marine, electronics, commercial laundry, and a great many other sectors. It’s the New York City of the digital universe.
Think about it: you can find a new fuel filter for your car on eBay as easily as you could once find matchbox cars.
Marketplaces like eBay are also the go-to sources for people who are looking for lots of different parts. A business that runs industrial equipment will always be in need of parts, and it’s just easier for a buyer to go to a single source for everything he or she needs in one fell swoop. It’s the same reason why consumers go to Amazon when they need new blue jeans, kitty litter, grass seed and school supplies. Nobody wants to go to 15 different stores to buy a bunch of things, which is precisely why eBay is so appealing. If you’re an auto mechanic looking for parts to restore a bunch of classic cars eBay is a godsend.
It’s kind of incredible that more people aren’t aware of just how much B2B business occurs on eBay each day, but it is. In fact, I’ve met people who are selling millions of dollars worth of parts on the site each year, some of whom don’t even carry any stock themselves. They’re getting rich by acting as the middlemen between people looking for parts and manufacturers who have them to sell.
Of course, these digital middlemen are succeeding because they bring a specific value to the equation: Data. Most manufacturers have PDF catalogs filled with hundreds of thousands of SKUs. Turning that PDF into a searchable database that’s integrated with eBay requires skill sets they don’t have, or have no desire to acquire. So they turn to the middlemen with data warehouses that will do that work for them.
The role of marketplaces in your omnichannel strategy
Okay, now that I’ve convinced you that you must sell on eBay (and other marketplaces we’ll talk about in a minute) how do you get started? What are the things you should think about?
First and foremost, leverage the hard-learned lessons of the B2C space, beginning with operating your digital commerce business as a separate channel from your brick-and-mortar and wholesale operations. Online selling, and selling via marketplaces specifically, require a specialized set of skills and rules of the road.
Which brings me to my next piece of advice: start thinking of your business as omnichannel. Parts distributors have typically sold directly to the end customer via a single channel, even if their supply chains were complex. But customers have become omnichannel, and you must too.
Once you start selling via multiple channels, and acquiring additional customers in the process, channel conflict will be inevitable unless you figure out how to manage it. Here’s a classic example of what could happen: A catalog customer you’ve been selling to for 20 years — a client with whom you have pricing agreements in place — receives an email offering 15% off an order for new customers, and feels miffed.
One of the things I find most interesting about this topic is the way that selling via marketplaces forces B2B businesses to accept that they need to develop the capabilities to manage multiple channels.
I should emphasize that all marketplaces, not just eBay, are serving customers in search of parts that many distributors consider their domain. One can find plenty of automotive supplies on Amazon and the site even offers tools to help consumers search by their vehicle model and year.
Meanwhile, Facebook Marketplace is growing at a scary-fast clip. It may have started as a neighborhood swap shop, a Craigslist of sorts, but now all kinds of businesses are serious about the channel, and are putting their full range of products there. Everyday I see Facebook Marketplace ads from local dealerships advertising the cars sitting in their lots. People are shopping for cars on Facebook!
So if you were under the impression that marketplaces were just for B2C businesses, I hope you think differently now. All businesses, both B2C and B2B, need to do business on them in order to compete and grow your business.