In “20 Leading Global B2B Exchanges,” my previous post, I shared B2B marketplace options for buying and selling products. In this post, I’ll offer pointers on using those exchanges.
Selling on B2B Exchanges
Selling on a B2B exchange is an easy and inexpensive way for suppliers to get started with ecommerce. A supplier does not typically need its own website to list products on exchanges.
Many exchanges allow suppliers to create a basic listing for free. But with thousands of suppliers on each exchange, it is often difficult to stand out without a premium account. Most premium accounts include prioritizing the supplier name in the search results, recommending products from the supplier to buyers, and richer product information, with images.
Exchanges usually allow buyers to rate the suppliers they purchase from. A good rating can attract new buyers. Some suppliers sell products not just in bulk, but also in single units, to attract first time buyers who want to inspect.
Many B2B exchanges vet suppliers before allowing them to list products. This is done to protect buyers but it also helps suppliers establish credibility.
Selling on B2B exchanges is straightforward, but there can be challenges.
- Security. Unknown buyers placing orders for large quantities of products requires greater scrutiny. Also, exchanges are known for bot attacks that create fake buyer accounts and place fraudulent orders.
- Payment fraud. Payment terms are defined before placing an order on B2B exchanges. But sometimes both parties, the buyer and the supplier, do not adhere to these, resulting in fraud.
- Product quality. Often buyers and sellers are not located in the same region and buyers have to rely on a suppliers’ representations of product quality. This sometimes leads to disputes when buyers receive the products.
- Shipping. Shipping can take a long time as large orders are often transported via containers on cargo ships. This requires careful forecasting of product demand by buyers and suppliers.
- Returns. Returns can be complicated and expensive, especially for products that are shipped around the globe. Instead of initiating a return, buyers will often request an adjustment against future orders. Returning an entire shipment is possible, but there can be conflicts as to which party pays the return costs.
- Exchange policies. Every B2B exchange has its own rules and policies. A supplier must understand and comply with these rules, which might mean having multiple product listings, better images, and more — resulting in additional work.
Buying on B2B Exchanges
Buying on a B2B exchange is easier than selling. Buyers simply create an account and select the products. Keep the following tips in mind, however, before signing up.
- Product samples. Purchasing on a B2B exchange often involves buying in bulk. But to try out a product, buyers should select suppliers that sell single units or samples.
- Discounts. On B2B exchanges, discounts from suppliers usually increase with larger orders. If a supplier does not advertise the discounts, buyers should request them anyway, especially for high volumes.
- Quotations. Suppliers often want the flexibility to vary prices based on the type of buyer, the quantity ordered, and the frequency of orders. Hence many products on a B2B exchange do not have a price but, instead, a quotation process. Sellers then customize a price, which typically has an expiration date and cannot be transferred to another buyer.
- Payment methods. Suppliers on B2B exchanges use payment methods that include purchase orders and bank transfers. Purchase orders are often approved for a maximum amount. A buyer can purchase throughout a month and, at the end, the supplier will send an invoice. Some suppliers generate invoices for each purchase order. Also, payments are bound by the terms in the supplier’s or the B2B exchange’s policy. This includes payment due dates, such as net 30 or net 45.
What has been your experience with buying or selling on a B2B exchange? Please share in the comments below.