How Marketplaces Enable Solution Selling

One of the core drivers of distributors providing a marketplace on their website is to offer additional products to their customers, without the overhead of inventory management, warehousing and shipping. When a distributor launches their own online marketplace they are enabling greater flexibility and a wider range of products than their non-marketplace distribution competitors. Marketplace suppliers and their products can provide access to new customers, markets, larger average orders and ultimately solution selling.

Savvy distributors have realized that they have to compete on more than just product selection and price. Many distributors have moved towards providing more solution based offerings or kitting, and other value added services. Amazon generates 35% of their revenue from recommendation engines alone. Imagine a distributor who provides not only the individual components for a customer purchase, but can also provide an integrated offering of “products often selected together,” that the customer will need to complete their project or product.

This “solution” selling mind-set enabled by a marketplace aligns with many of the business goals of a distributor:

Higher Average Deal Size:
Being able to sell more product per purchase is a goal of distributors. Being able to make buyers aware of additional products that they naturally could add to their order is a no-brainer for raising deal size and engagement. This can often be seen where the buyer is given suggestions on product pages, shown additional products on check-out, or sent incentives or discounts via email. Marketplaces allow for greater average deal sizes because they open up a far greater pool of manufacturers and distributors, and when used strategically can fill in gaps or open new markets in a distributor's supplier/product portfolio.

Greater Movement of inventory:
Distributors don’t like seeing inventory sitting in the warehouse for weeks or months. Marketplaces open up new markets, product lines and customers without the inventory risk. The logistics of storing and shipping products reside with your individual manufacturers who already have established processes and operations that will allow them to easily ship their products off to your marketplace customers. If solution selling is done right, it can also allow for more triggers for a buyer to purchase as distributors are now able to offer more product, especially product that may have been a gap in the supplier offering. With solution selling products that are harder to sell (e.g. needle and thread) can be bundled with larger or more in-demand products (e.g. sewing machine) helping to move inventory that normally is more difficult to sell individually.

Keeping the buyer spending on their site, not on a competitor’s:
Distributors spend money on awareness and engagement all in the hopes of keeping their buyers on their websites. The more valuable products a distributor can provide across different segments of buyer need, the more likely that buyer is going to buy everything they need on the distributor site, and not jump to a competitor to fulfill the rest of their orders. Amazon Business is a great example of a site that provides a massive amount of options, solutions and products across a wide spectrum that keeps buyers committed to buying from them.

More engaged and loyal customers:
Buyers want great digital experiences that are easy and seamless. Every buyer interaction with a distributor is going to increase or decrease engagement and loyalty, so distributors need to make sure they’re providing an optimal experience to their customers. Marketplaces provide a greater offering to customers, and reduce the complexity of sourcing from multiple distributors or suppliers.

Multiple product entry points to get a buyer engaged in a purchase:
A given order may have multiple potential products that could be purchased. In solution bundling each product is a doorway to all the other associated products. With solution selling, you are providing pathways for the buyer to enter into that solution selling set via any of the potential products that they are purchasing, providing more opportunities for additional sales.

Let’s run through some examples of this type of “solution selling” in the real-world.

An Electrical Engineer: An electrical engineer will need multiple components (e.g. microcontroller, memory, power supply) to build out a new control module. Imagine the marketplace either directly or indirectly providing additional product offerings as the engineer is purchasing one of the components. This can be done in context on a product page as the engineer is shopping, or can be provided via specialized product configurators.

A Dental Office Manager: A dental office manager looking to build out a new dental suite. They may be looking for a dental chair, but they may also be looking for additional components to outfit the dental office including dental instruments, sterilization equipment or operating lights. They may also be looking for a television, large mirrors, comfortable seating, things perhaps a traditional dental supply distributor may not supply through their core suppliers, but could easily be supplied via marketplace suppliers.

A Plumber: A plumber may be looking to buy a product for the next job. She may be looking for water heaters, pipe, tools or caulking and sealant. The plumber may also be looking for buckets, uniforms, trailers, wheelbarrows and other items that may not be supplied by a traditional plumbing distributor, but could easily be supplied by marketplace suppliers.

Marketplaces provide the ability to bring in non-traditional suppliers providing adjacent products to your core buyers, without having to take on the risk and commitment of inventory, warehousing, shipping and all the ancillary commitments that come with bringing on a core supplier. A marketplace solution reduces risk by enabling distributors to:

  • Try out new product areas without the inventory, warehousing and shipping commitments
  • Try out suppliers in a given market or product area without the large investment of bringing on a core supplier
  • Bring on more marketplace suppliers in a given area more quickly than bringing on a traditional core supplier
  • Rely on marketplace suppliers to use their own shipping and logistics to move product to the end customer
  • Shut down a new market or product line built in the marketplace process if the right numbers aren’t hit with far less complexity in removing a large group of core suppliers.

There are areas you need to consider when pulling together a solution selling process that will work for your customers and for your business:

Product Matching: You will need the ability to map together products that are most likely to be purchased together. This can be done by looking at bill of materials, abandoned carts and/or completed cart purchases, and then putting together mappings of the most purchased products; Another method is to have marketplace suppliers create mappings to distinct groupings of products or individual products. If distinct product configuration tools are being built, then these types of relationships can be built in a product management file, or can be tied right into the distributor's back-end system.

Presentation Types: Another area of consideration is where you’re going to allow for “solution selling” to take place. Some companies create product wizards and configurators that allow the customer to build out an end solution digitally, being able to buy multiple products, with suggestions being provided as the configuration progresses. A bill of materials (BOM) list can also be built on the fly as the customer makes selections in the configurator. Another presentation area is to provide additional options or solutions on product pages. This is similar to the Amazon model where similar products, or supporting products are suggested right on the product page. Both presentation types have their advantages, but if you have to choose one the focus should be on building solution selling into product pages where it is a natural extension of the buyer journey.

Supplier/Distributor Alignment: Marketplace suppliers are motivated to be successful on a distributor’s website. The level at which a distributor engages with marketplace suppliers is different between distributors, but suppliers are often motivated to help create the types of product relationships, and supporting content required to have their products rise above the rest. Often in a marketplace certain marketplace suppliers will be more successful on the marketplace than others. Savvy distributors will create stronger relationships with their top marketplace suppliers, and solution selling is an area where deeper engagement between distributor and marketplace supplier can provide good results.

Know Your Users: Understanding how buyers move through a buyer journey, and what types of solutions or projects they are trying to build out with individual components is critical. As you roll-out your solution selling capabilities online, taking the time to identify your personas, and the types of products customers would buy as a bundle will help you better focus your time on building out the highest probability solutions bundles, and allow you to optimize with real data as you track the success of different solution bundles across your business. Customer preferences for solution bundles can be ascertained through looking at past purchase data, interviews with key customers, and researching competitor offerings.

Marketplaces are great enablers for solution selling or bundling of a product. Marketplaces provide the flexibility and the increased options to build more suppliers and products into solution bundles, and position a distributor as a solution provider, and not just as an old school distributor competing only on price and availability.

Have more questions? Get in touch with a MarketPush expert to see a marketplace in action or discuss how to help your company embrace the future of e-commerce. Email us at