How Online Marketplaces & B2B eCommerce Platforms are Fueling A Wholesale Renaissance

After a few years of destabilisation in the industry, the retail sector is undergoing a complete revitalisation fuelled by innovative B2B eCommerce solutions. Thanks to these new tools, brands around the globe can continue to reach new buyers and sell seamlessly online while providing their retail partners with the means to purchase at their leisure.

The rise of the internet altered the way consumers browse and purchase products for good. The emergence of e-tailing offered brands and retailers alike the possibility of selling their goods online directly to consumers, potentially eliminating the middleman. As brands today have more options than ever before to reach consumers and sell their products, some may think this would mark the end of either online marketplaces, wholesalers and B2B ecommerce platforms – many wondered if all of these channels would have a place in our new reality. But they would be wrong.

Recent research highlights the advantage of using direct-to-consumer models (DTC) together with wholesale partnerships with B2B ecommerce platforms and marketplaces. While some brands may have avoided going down the wholesale path, confident in their ability to succeed solely with a DTC model as it yields higher margins, studies from Coresight Research found that wholesale offers access to a larger customer base and more efficient marketing - even if it provides lower margins. Analysts at BMO Capital Markets found that selling via the DTC model alone does not guarantee bigger margins. In fact, from a group of leading apparel brands studied by BMO, four out of the top five merchandise margin-getters had robust wholesale revenue. Brands Gap Inc and American Eagle Outfitters, who invest minimally in wholesale, have merchandise margins below PVH and Ralph Lauren, two brands that lean heavily on wholesale as well as DTC, according to the report from BMO.

"Using a platform to enhance your reach and your effectiveness in your sales organisation is paramount to achieving profitable sales," - Erik Ulin, Vice President of Marketplaces at NuORDER, leading B2B ecommerce platform

In addition, BMO found that the DTC channel does not also assure a boost in sales. In the report, BMO noted that sales among brands could remain flat despite a DTC expansion as the model is difficult to expand. Although revenue per unit may grow, this does not mean the total company revenue will. It is evident that brands growing steadily have continued to invest in wholesale alongside of DTC, with data from NuORDER noting a 53% increase in the adoption of B2B ecommerce solutions over the last two years to maintain strong relationships with their retail partners. Brands who leverage a DTC platform, a B2B eCommerce platform and wholesale marketplaces can further attract new business online and find potential consumers in more than one place, thereby growing their customer base with minimal marketing effort. DTC models are ideal for brand identity, but wholesale channels will always play an important role in accessing a greater customer base.

"Leveraging the reach of marketplaces provides for great lead and business generation from areas and targets that might not have been targeted otherwise" - Erik Ulin, Vice President of Marketplaces at NuORDER, leading B2B ecommerce platform

The importance of having a wholesale presence to grow a brand's business should not be overlooked, which is why a growing, thriving business should aim to find a balance between attracting new retail customers and deepening partnerships with existing customers. Thankfully, several wholesale platforms today provide integrated B2B ecommerce solutions. Many of them specialise within the mid-to entry-level price points, such as Ankorstor, NuORDER and Faire. But how do brands know which ones are the right match for their business? "It is important to understand how different marketplaces work for different brands," says Erik Ulin, Vice President of Marketplaces at NuORDER, a leading B2B ecommerce platform. "Factors such as price point, type of product, logistics setup, sensitivity to distribution, and pricing of the service itself are all important to understand in relation to who you are as a brand and organisation for it to work for you effectively.​​"

Other essential aspects to take into consideration when searching for a wholesale partner include the amount of control brands have over the digital space in which buyers interact with their brand and products. Being able to display the brand's vision and visual voice remains key to success. "The virtual showroom allows you to design the experience to your liking - it’s how you want a buyer to experience the brand that lies at the centre of our solutions. Educating a buyer on who you are as a brand and what your customer is like is important for there to be a good fit and a good basis for a long-term commercial relationship," adds Ulin. With buyers today also more technologically savvy than ever before and seeking out self-service options to find new products without the aid of a salesperson, having integrated solutions is essential. Data from NuORDER found that two-thirds of B2B customers were found to have a preference for digital tools over in-person sales. In response to this, the core part of NuORDER's solution stems from its product and order management system. Buyers can easily manage and analyse their product portfolio for better decision-making regarding allocation, sales, and potential future design focus.

"Our Marketplace allows you to express your brand to the vast network of NuORDER buyers who browse and search for new brands and products every day," says Ulin. Communicating with an active base of 150k buyers globally, they are introduced to new categories and brands on the platform, with brands featured in NuORDER's communications seeing a 30% to 40% increase in leads generated. "Danish brand Samsøe Samsøe generated significant accounts in Central Europe through their exposure on the marketplace; the U.S. beach lifestyle brand Surfside Supply connected with a retailer that has since become their largest account," notes Ulin, two brands which address different parts of the market that found success on the NuORDER Marketplace.

NuORDER stands apart from other B2B ecommerce platforms by allowing brands to plan their sales and allocations across all channels. It is vital for brands to onboard integrative solutions and help streamline operational processes. NuORDER joined Lightspeed last year to expand its vision of creating a fully integrated B2B2C solution for more connected commerce. This lets brands and retailers work around one source of truth for product data and order management.

For more information, please visit NuORDER.com