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online marketplace

5.18.20

Colin Keeler - Payments Design Manager, Leaf Trade

For a B2B Business, a Managed Marketplace is the way to go :Why more technology companies are switching from an open marketplace to a managed one.

Blog

eBay launching in the ’90s to radically transform how buyers and sellers connected.

Amazon rising to a ubiquitous role across all aspects of e-commerce.

Uber and Lyft fundamentally disrupting consumer transportation.

Marketplaces have, in many ways, defined the internet era. They’ve allowed different third parties to transact goods and services with efficiency and unprecedented selection. Commerce has expanded from a primarily local basis to truly global.

As marketplaces have grown to dominate the web, they’ve also splintered to serve the unique needs of specific verticals. While Craigslist certainly fulfills many different use cases as a generalized marketplace, new sites like Airbnb, Indeed, and StubHub have thrived by deeply serving the temporary housing, job, and events markets.

B2B Business and Managed Marketplaces

While marketplaces have rapidly changed how consumers buy and sell worldwide, the onset of business-to-business marketplaces has, in many ways, lagged its consumer counterpart. The value proposition of marketplaces has historically been outweighed by the complex nature of B2B transactions, with highly specialized supply chain needs, multiple middlemen and brokers, and deep relationship buying.

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However, new B2B marketplaces are now emerging to reinvent how businesses interact across different industries. In contrast to the “Wild West” open marketplace approach popular with consumers, B2B marketplaces are thriving by committing to highly channelized, industry-specific needs with a “managed marketplace” approach.

Where consumers seek the broadest selection of products possible, businesses need vendors who can deliver the right products at the right time and price. The new wave of managed marketplaces is thus going far beyond just connecting any and all buyers and sellers by instead ensuring trust via multi-step processes of validation and aligning deeply with existing supply chain flows.

Hurdles in Hemp

As a rapidly growing, highly fragmented industry burdened by complicated regulations, hemp and CBD businesses face a supply chain almost defined by its inherent obstacles and inefficient processes.

Screen Shot 2020-05-11 at 3.35.13 PMCultivators face uncertainty in both sourcing (finding quality CBD-rich clones and seeds) and selling their harvest (partnering with the right processors and buyers). Extraction is a highly technical process that balances yield maximization against maintaining compliance, creating incredible demand for the most proficient companies.

As a newer, developing industry, companies also face an increased risk of “bad actors”. The market is truly emerging, with nearly 3,000 processing licenses issued in 2019 alone. Companies remain small in size and lack defined reputations within the industry.

Without firmly established standards and limited historical performance, gauging a potential partner’s credibility and capabilities can be daunting. With a complex patchwork of state laws further complicates who and how businesses can work together, companies can face tremendous risks both business and legally oriented.

Managing the Hemp Market

Leaf Trade is helping to mitigate this significant uncertainty across the supply chain with its unique managed marketplace approach to hemp transactions:

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  • Trusted Supply: Leaf Trade’s robust onboarding, vetted suppliers, and unmatched configurability simplifies and de-risks growing hemp businesses, allowing companies to discover, develop, and deepen key relationships.
  • Increased Efficiency: By acting as a single source of truth across the supply chain, Leaf Trade’s marketplace brings together disparate modes of communication to reduce time spent coordination.
  • Integrated Payments: Leaf Trade’s Leaf Pay solution pulls hemp payments according to agreed-upon terms automatically, keeping buyers and sellers aligned and on-time.

By taking a tightly focused approach to the needs of the hemp industry, Leaf Trade’s marketplace will support unparalleled efficiency and growth. Whether you are a cultivator, processor, brand, or retailer, reach out to the Leaf Trade team to see how their managed marketplace can help you grow better, sell better, and buy better.