The rise of the virtual marketplace has made it easier for buyers and sellers to connect. The most well-known virtual marketplace — Amazon — is a top example of a retail marketplace where buyers looking for specific products can choose from (often) a wide selection of sellers. But virtual marketplaces are not just for retail. Platforms for e-learning, travel, healthcare, home rentals and professional services enable people and businesses to connect with each other online.
For small and medium-sized businesses, many specialized services are commonly outsourced — from SEO, graphic design and cloud technology. At the same time, SMEs don’t typically have large marketing budgets or sales teams with the time or resources to reach potential customers. And considering the global economy, this may mean opportunities are left on the table.
This is where a virtual marketplace can help. Owners looking to outsource and professionals offering products and services can connect to grow their respective businesses.
Benefits for business owners looking for products and services
As a business owner, you have a lot on your plate. If you need to outsource professional services, you want to find the right partners at the right price — without a lot of legwork to take you away from running your business. A virtual marketplace can help you do just that.
Here are some of the ways a virtual marketplace may benefit business owners:
- Find accredited professionals. One of the toughest parts of finding a marketing partner is knowing where to look. Unless you have the advantage of a referral, where do you start? Virtual marketplaces can evaluate providers for you and offer a selection of compatible and accredited professionals based on your project needs and budget.
For example, for business owners in need of creative and technology services — such as web development, marketing strategy, digital marketing, content creation and more — a virtual marketplace such as helloDarwin can help connect businesses with vetted and experienced outsourcing partners.
- Compare pricing. If you’re new to outsourcing, it can be difficult to know what a fair price is for the work you need to be done. Many virtual marketplaces offer pricing comparisons so you can evaluate quotes across service providers.
- Enjoy payment protection and efficiency. Most virtual marketplaces have industry-standard scope-of-work proposals and contract templates, making it easier to onboard a vendor. While some platforms allow participants to transact payments off-platform, others offer full-funnel payment. In this case, an owner pays the platform, which can provide accounting efficiencies, help protect your payments, and ensure you receive your deliverables.
- Transform your procurement process: Using a virtual marketplace as a procurement tool may enable your procurement team to streamline time-consuming and tedious work typically involved in sourcing, vetting and comparing vendors. By achieving greater value and efficiency, more effort can be spent on value-added activities such as innovation and sustainability.
Benefits for professionals offering products and services
If you run a small agency, freelance or work as an independent contractor, you may not have the budget — or time — to market your services. A virtual marketplace may make it easier for you to get your name in front of businesses.
Here are some reasons to consider joining a virtual marketplace:
- Reach a broad audience. Thanks to the rapid evolution of digital technology, freelancers and agencies can do business with companies around the world. The trick is finding the work — virtual marketplaces provide exposure and access to opportunities both locally and globally. As an agency looking to expand its reach and portfolio, Les Promotions Mondiales Inc. (Rank Media Agency) turned to a virtual marketplace to build both its exposure and client base.
- Boost brand credibility. Becoming a part of an established digital marketplace may provide a level of trust for both you and the buyer. And if there are any third-party reviews about your work, buyers may have more confidence in working with you.
- Build your network at little expense. Typically, there is no cost for freelancers or agencies to join a virtual marketplace, making it a low-cost business development tool. Most often, you or the buyer only pay the platform for revenue generated by leads or projects.
- Focus on the work. With the option to promote your business and your work without the need to develop and maintain other channels (a website and/or bricks and mortar location) you can focus your time on the services you provide.
Tip: Understand the marketplace business model
Be sure you understand what you are signing up for when you join a marketplace. It pays to read the fine print when it comes to payment options and taxation, returns, the scope of work (SOW), and how fulfillment issues are resolved. B2B online marketplaces usually follow two business models.
- A broker model connects buyers and vendors but as buyers communicate and contract directly with vendors, the marketplace offers limited or no support, warranties or responsibility for transactions.
- A Single-vendor model acts as the vendor and bears the responsibility for delivering the products and services as promised, acting as an agent.
By connecting businesses and service professionals, virtual marketplaces help both parties grow efficiently, build their networks and make quality contacts that can benefit all partners for years to come.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.