B2B App Marketplace as a Business Opportunity

“Without a customer, you don’t have a business – all you have is a hobby.” Don Peppers, American business author

Customers and Sales Channels are key elements of any business model, apart from the Product.

If you have a brilliant product idea but have no understanding of how and where to sell it, it’s worth of nothing. Thus, it is very important to have not only a clear understanding of the product itself but to have a vision of your future business model. Even if you have a clear understanding of who is your product’s target audiences, not knowing the sales channels to reach your potential customers, you are very much at risk of failure.

The good news is that now we live in the eCommerce growth age, where it’s possible to use marketplaces as the existing sales channels to push your products forward. Alpha Serve has chosen this way to promote and sell its own products. Having started in late 2018, they now have more than 25 add-ons in total on Atlassian Marketplace, Shopify App Store and Magento Marketplace. Anna Odrinskaya, Chief Strategy Officer of Alpha Serve shared their experience on why to consider running a business as a multiple marketplace vendor in the software industry.

According to the Digital Commerce 360 report, B2B marketplaces have already become a big growth driver of b2b eCommerce. It’s also mentioned that worldwide b2b marketplaces sales could reach an estimated 3,4 trillion USD by 2024, up from 680 billion USD in 2018.

What Is a B2B Marketplace?

A marketplace is an eCommerce platform where third parties can authorise to sell their products or services directly to customers. Generally, there are 3 key distinctive features of a marketplace:

  1. Numerous sellers and buyers using the same website as a single selling point
  2. Marketplace doesn’t own inventory
  3. The purchase is executed without leaving the website.

As consumers, we all know about PlayMarket from Google or AppStore from Apple for B2C apps. But hardly anyone knows that B2B apps marketplaces exist, like Shopify App Store, Atlassian Marketplace, Salesforce AppExchange, etc.

B2B app marketplaces are mostly offered by a principal vendor, which means that it sells its products and services alongside those of other third-party companies. Thus, the strong principle vendor’s brand name gives opportunities to the vendors to parasitize on it by accessing a ready sales channel with organic traffic and numerous customers nearly for free, as well as accessing a well-developed ecosystem with clear rules and existing best practices.

Besides, a B2B marketplace help sellers manage complex transactions for businesses, such as bull orders, app licence issues and management, payment and invoicing, etc.

All this reveals a true potential for significant scalable growth both for vendor and app developers.

Why Consider This Business Opportunity?

For apps and SaaS solutions, b2b marketplaces can offer an easy launch and scale. It is more simple to use existing infrastructure than to build a digital presence from scratch. This is a true value proposition for those companies or developers who start their businesses and go digital.

Access to Global Markets

B2B app marketplaces are in major part international platforms. This means that introducing your app on the marketplace is global market exposure. You may be challenged by interface or language to get a market in some regions, but generally, you can reach out and collect feedback from users from all over the world. Foreign markets expansion is much easier when your product joins a working sales channel with numerous warm users browsing for apps.

B2B Marketplace Ecosystem

Leading B2B marketplaces can offer more than just a platform to sell your products. There are many more valuable points in addition. You can get product features insights and share knowledge in solutions in User communities. You can benefit from experience exchange and solve the issues you face during product development in the Developers community. You can learn from Best practices in marketing and sales from the blog. Join industry events both online and offline for inspiration and to find new partners. So, it is always something more than just a point of sales.

Find Your Product-Market-Fit

Launching your app on the marketplace is perfect to test your MVP and find a product-market-fit at a comparatively low cost. Yes, you still need to invest in MVP development, but remember to launch the very first app version and start collecting feedback. Thus, you’ll be able to check if the app idea has any sales potential, and you’ll get valuable insights from real users on how to develop your app further.

Shorter Sales Cycle

Getting access to global customers of different sizes and industries is a priceless boost for your app. Imagine how much money and resources you’ll need if you start marketing the unknown app. In addition, you need to build all functions on your side to execute the complex b2b sales, including various payment methods (which is often a bottleneck), customer support, licencing, compliance etc. Marketplace removes these troubles from the vendor and takes them upon himself for the commission, making your b2b sales cycle shorter. This allows you to focus on your product development, but not on the business operations.

Managed Profitability

All b2b marketplaces have pre-set pricing concepts where you can choose the one appropriate pricing idea for your application. You can easily get acquainted with the average prices for similar solutions that are already existing to get a general understanding what are your reference points in price and save time on A/B testing. Moreover, the commission model is transparent and clear. You can easily calculate the revenue and margin after a few months, as well as build your financial model for future scalability with a sufficient level of accuracy in numbers.

Simple Entry

Despite the mass delusion, it is not that complicated to launch your app on the global b2b marketplace. Many of them do not require a registered company as a vendor, so releasing your app as an individual is possible. All of them have their expectations and requirements, though they are all possible to execute. As contact is obligatory to start your vendor’s story, don’t forget to study it carefully, together with marketplace rules. In practice, it is easier to be blocked on the marketplace for rules violation than to publish a product.

Tips for the Successful Start as B2B App Marketplace Vendor

As you see, there are several advantages to start your app business with B2B marketplaces. For example, on the Atlassian Marketplace, there are more than 3500 apps, but not all of them are equally successful. When you’re just starting, it will be hard to compete with leaders in terms of active installations growth. But anyway there are certain things you need to work on if you wish to become notable.

Use the Product Content at a Maximum

In this model content is a strong marketing tool that has a number of aspects that need to be covered at launch:

  • Fill in your product listing pages at maximum, keeping a hand on accuracy and apprehensibility. Focus more on the user values than on technical details. Remember, that end-users but not technicians will be browsing for your solution!
  • Use screenshots where relevant to provide as much visualization as possible. Invest in a short app demo video based on screencasts to let your visitors get a clear picture of how the app looks like and how it works.
  • Use unique texts and graphics.
  • Fill in all possible chapters offered on the marketplace.

Work on Product Documentation

Don’t forget to give users a comprehensive tutorial on installing, configuring, and using your applications. This must be a step-by-step manual with screenshots.

Take care of the framework End-user licence agreement, to let your future customers know what you’ll provide to them for the payment to avoid false expectations.

Get Most of Analytics

You need to regularly monitor your app activity and track your progress in installs. Use all options provided by the marketplace: use google analytics and conversions to know who’s attending your page and performing targeted actions. Study all available marketplace reports. You aim to gather as much information as possible in the first months.

Provide Basic Customer Support

Even if you’re working alone and have no support team behind, your users need to know how to reach out to you if they decide to use your app. Where should they send their questions? Where to submit a support request if anything goes wrong? You should at least have an email address for such cases. And don’t forget to constantly monitor it.

Conclusion / Wrap up

As you see, starting your product on the global B2B marketplace is not that tricky, but can reveal huge opportunities for your business. Marketplaces are good to test your app ideas and find a market fit. Use the above-mentioned tips for a successful start. Don’t live ideas in your head – share them with others by creating new apps!