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Webshops vs. Online Platforms – Pros and Cons for B2B Businesses

Angeline Rast
31 May 2019

They have established themselves as the most successful business models of our time; a look at the most valuable companies worldwide confirm this trend: 10 of the top 20 are online platforms, Facebook, Uber, and Alibaba among them. The discrepancies between online platforms and webshops make it clear that B2B businesses can expect some advantages from using an online platform.

Not Just a Question of Costs, but Keep Them in Mind

Developing your own webshop requires a significant investment. Not only does the visual interface have to be in order, but the functionality has to be optimized for your industry and internal processes. It takes a lot of time and effort to reach the point of implementation, but things don’t really change once the webshop is up and running. Specially trained employees oftentimes need to learn how to tend to the webshop and care for any resulting customer relationships; not to mention develop an efficient advertising strategy over online channels.

In contrast, an established online platform offers sophisticated processes that can integrate seamlessly into your own IT structure. Any resulting costs are spread between revenue-dependent fees or flat fees and are therefore a little easier to stomach. Businesses also profit from tried and true marketing methods that reach a much wider audience. Are you already convinced? Well, there are two sides to every story.

Network Effects in Both Directions – a Speciality of Online Platforms

If a business uses an online marketplace instead of its own webshop, customers are the first to benefit. Buyers are able to see and compare multiple offers in a single interface, raising business transparency. Of course, that’s not always an advantage for sellers, since they’ll have to improve their prices and products if they even want to be considered. Thus, competition is higher within online platforms.

However, enormous opportunities are also created with this set-up. Businesses can get a clear overview of their competitors’ strategies and are able to see when competition releases new products on the market with very little research. Distinguishing key factors and offering your products and services with clear advantages is not only in the best interest of customers, it’s also a strategy for sustainable success.

Consider Risks and Side Effects

While there certainly are advantages, it would be unwise to ignore the disadvantages. Using an online platform forces businesses to surrender some of their decision-making powers. Internal management in regards to IT, finance, marketing, and distribution, as well as organizational systems like HR are taken over by an external entity, i.e. the platform management system. The influence of the platform ranges from the type and approach to advertising to the replacement of a linear process system with a multidimensional management system.

Registering for an online platform requires B2B providers to expose their internal structures, thereby adding a layer of complexity in securing critical data. The question of cost advantages must be considered individually for each business. Specialized platforms are often more cost intensive and are only worth it if a high number of customers opt for your offers.

Make a Careful Decision – Advantages and Disadvantages of Platforms

The bottom line is that the decision whether or not to use an online platform must be made after careful consideration. If you offer exclusive products or services, you can likely avoid using online platforms. However, we are dealing with a strong trend here, as demonstrated by the success of large online marketplaces that effectively connect diverse providers with a wide range of customers.

Advantages include:

  • Existing infrastructures
  • Reaching a wider range of customers
  • Rapid feasibility of online business
  • Incorporated customer care
  • Relatively low costs 

If you are still not convinced, read here about even more reasons for using an online marketplace in B2B businesses. 

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