How to identify the ideal marketplace for your wholesale business?

In this digital age, this is how businesses can enhance their coverage and win over new customers.

However, there are some caveats with this strategy for wholesale businesses. Firstly, these e-commerce sites focus mainly on retail products for final consumers (B2C). Moreover, when using an e-commerce platform as a retailer, an enterprise will have to be responsible for operation processes (for example, order management, daily/weekly inventory control, customer enquiry response, program development, promotion, and advertising), shipping costs and commission costs. Sometimes enterprises will need to create a dedicated team just for e-commerce channels.

Considering all of the above, enterprises have to carefully consider whether to expand through these B2C channels or focus their resources on B2B e-commerce channels that will help them target the right businesses, which are seeking large quantity orders of your product.

In Vietnam, Alibaba is one of the most popular e-commerce sites for wholesale enterprises. It's a good example of a digital B2B marketplace that allows enterprises to search, exchange information and sell their products across borders throughout Europe, the Americas, Asia, the Middle East and Africa. 

There are many more benefits an effective B2B marketplace can deliver to enterprises besides creating opportunities to connect with other enterprises around the world, regardless of borders.

Your enterprise will reduce expenses when compared to other advertising methods.

You will be able to serve customers 24/7, 365 days a year.

You will will be fully supported by a platform developer when running projects and promotion campaigns.

All enterprise and product information will be thoroughly examined and verified before being published, which will enhance your credibility for purchasing transactions.

You will build up your brand reputation and trust factor when appearing on major digital marketplaces.

Of course, there are two sides to everything. Besides the aforementioned benefits, there are also risks that businesses have to consider. For example, you have to be careful to choose the right marketplace with a suitable customer segment. You must also choose a reputable marketplace that has a strict and transparent policy to avoid losses of time and money or damaging your brand image and losing customer trust.

So before joining any marketplace, make sure you consider these essential factors:

1. Scale and credibility of the marketplace: small-sized marketplaces may not have a strict inspection system and membership policy. Therefore, you might encounter fake firms or companies that give misleading information.
     
2. Purchasing and warrantee policies: these will help enterprises minimise risks when it comes to fake companies and counterfeit products.
     
3. A platform’s technical system: look for a marketplace with a user-friendly interface and integrated functions that will help your business save time when publishing content and ensure you can manage orders effectively.
     
4. Check the platform’s target customers and markets: each marketplace site will have their own target customers that will be located in certain markets. So, depending on your business’ needs and vision, you should choose a platform that can help you achieve growth.

Beyond trying to get a detailed understanding of the various e-commerce platforms out there, and being careful to identify which one is most suited to your enterprise, it’s crucial that you also understand the importance of cash flow management. Many businesses can grow well and record high profits, but still lack cash flow and, as a result, end up failing. Cash is one of the important factors to ensure a small business survives.

Lastly, businesses should also consider selecting a marketplace site that cooperates with major banks to have the best deals. For example, the BizMerchant mortgage loan program created by UOB Vietnam runs in cooperation with Lazada, Shopee, and Sendo and has supported many online businesses.

To help businesses understand the importance of cash flow management, and identify ways to optimise cash flow, make sure you follow UOB Vietnam’s future posts, featuring practical advice and the latest insights from leading experts in the corporate finance field.