B2B Marketplace: Example Use Case Association of HVAC Equipment Manufacturers

Part II of our B2B Marketplace series in which Matt Boland, Director, Global Partner Development at Ultra, examines the revenue potential for embracing marketplace as part of a holistic eCommerce platform. Read Part I here.

For this fictitious example of a real Ultra client, our Marketplace Operator is an Association of HVAC Equipment Manufacturers. 

The uniqueness of the Association approach is the collaborative power of it.  In the United States, Associations can be quite powerful, and a Marketplace can exponentially increase the power and value for its members.  In Australia, they have strength; however, not to the extent the US and in Asia-Pacific, the strength of Associations is not as strong as either the US or Australia.  Marketplaces within Associations, like Industry Distributors, creates a power play where adoption is less risky. 

In Asia-Pacific countries, this means opportunity as business is typically “ruled” by multi-brand conglomerates. In any region, the opportunity for ‘co-opetition’ between the brands and the association is great – in Asia-Pacific, that opportunity is significant.  

Adrian Wakeham, Regional Manager – Australia / New Zealand, from our partner SmartOSC, had this to say about Marketplaces and Marketplace adoption: 

“Unless you’ve been living under a rock for the last few years, you’ll know that marketplaces have taken off in a big way in the APAC region and Southeast Asia in particular.

“While that makes this an intensely competitive market, it’s still a nascent one with opportunities for growth. Chief among those opportunities may be that consumers of all stripes [B2B, B2B2C, B2C] in this region are comfortable with buying everything from power tools to dinner via marketplaces, so marketplace newbies won’t face large hurdles when it comes to customer education.

“Speed to market is crucial in such a competitive environment which is why it really does pay to go with an integrated platform, giving you the speed to launch quickly and the agility to adapt just as quickly.” 

Back to the example, that supports Adrian’s view. 

The Marketplace, built by the Association for its members, offers the entire gamut; Equipment, Parts (new, used, spare), Service (installation, repair, removal), Subscription, and even Quoting.  The Members of the Association service many industries. Nearly all of its members have some level of an eCommerce presence. 

Many members of the Association have commented on the Association Leadership’s eCommerce knowledge, skills, and capability. They have asked what the Association can do to educate the membership and support growth through additional programs, channels, etc. Some have even asked, “What can the Association do for us to facilitate growth through eCommerce as we are getting buried by global Distributors and knock-off products on Amazon and the like.  We don’t even know how to get started. Could you run an eCommerce business or a channel for us…on our behalf?” 

This question opens as many opportunities as it does questions and challenges. 

Historically the complexities of such a business model led to inevitable issues:  each site requiring its own platform license (for commerce – and other supporting and/or ancillary technology/applications), resulting in each Association Member eStore being a unique standalone solution as well as an independent marketplace entity running off the same instance in a multi-tenant environment.  Ultra’s disruptive Pricing and Licensing makes this business model and strategy more affordable the ever before, more on that in Part III.

In this case, the Association not only saw the opportunity to support their members’ businesses, they saw a business opportunity for all participants.  Launching, managing and supporting these independent businesses, while at the same time consolidating them into industry-specific, expert marketplace…run by, contributed to, participated in, and guaranteed by industry experts and managed by the Association whose goals is less about profits and more about fair competition within the industry, collaboration amongst its membership, improved industry visibility, the guarantee of quality goods and customer growth and retention. 

Figure 1 provides a snapshot of the functionality offered by an Ultra Marketplace and the roles and capabilities provided to and provided by the three (3) types of stakeholders. 

Figure 1: Functional Overview

This Association found that with many Marketplace solutions, the ‘ownness’ is on them to cobble together a variety of applications critical to the business and technical success of the Marketplace’s ability to promise, orchestrate and execute complex orders.  After speaking with Ultra Commerce, they found all the critical applications delivered as modules with Ultra’s comprehensive, integrated platform. 

In choosing the Ultra Commerce integrated platform, the Association expects to dramatically shorten their time to market, retention and attraction of members, increased satisfaction among member companies and customers with this new and competitive channel.  Their expectations are focused on hard dollars as well through membership dues and Association revenue captured through a nominal service transaction fee that will be reinvested in the Association and the Marketplace.   

Of course, the big winners are the members of the Association and the increased sales & revenue growth as the Marketplace brings clients back from the aforementioned generalist marketplaces to a marketplace owned, run and contributed to by experts. 

So how does a selection of Ultra complete their vision?  Here is some additional description of the modules delivered, “out of the box” with Ultra’s Comprehensive Marketplace solution:  

  • B2B, B2C, and/or D2C Commerce: Enterprise-class eCommerce capability with all the bells and whistles.  The ability to launch an unlimited number of storefronts on the platform (one for each participant or Marketplace seller who may want one); 
  • Marketplace: Multi-seller, multi-vendor marketplace providing participants with portals to add products, update inventory, view sales metrics/performance, process and fulfill orders (and provide notifications) – all of which can also be done offline. 
  • Order Orchestration: Robust omnichannel / multi-party order orchestration – including split orders between multiple fulfillers and even split order lines to fulfill quantities from multiple locations to satisfy customer requirements.  Easily definable business rules can also be created to set fulfillment rules if multiple participants have the available inventory. 
  • Product Catalog Management:  a robust, hierarchical and complete catalog capability to manage product information capable of handling complex products, hierarchies, complex bills-of-material, etc.  Through our built-in Product Catalog, the ability to pre-populate all storefronts catalogs with consistent information, attribution, and inventory availability. 
  • Content Management: Business user-friendly tooling to build, modify pages, promotions, create bundles or segments, or anything else needed to create a premium digital experience on the storefronts – with access-based controls so storefront owners can maintain their pages (and only their pages), and 
  • Product Data Management:  provides substantiative value in aggregating, cleansing, and standardizing complex product (and other) data across multiple categories and enterprises to create a standard and consistent data solution for your platform. It is delivered in a fully integrated manner via our 2021 acquisition of Vesta Commerce.

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