Editor’s note. Running a vertical marketplace is a challenge. There are the usual ecommerce ups and downs that come with running a B2B website. Industry-specific marketplaces face the additional challenges of gaining buy-in from both buyers and sellers, building inventory, and competing with other marketplaces such as Amazon Business. In this question-and-answer session with Digital Commerce 360 B2B, Lisa Butters, general manager of GoDirect Trade, an online marketplace launched by Honeywell Aerospace, provides an update on the highs and lows of running a marketplace during a time of great change in B2B ecommerce. (This article will also appear in a forthcoming Digital Commerce 360 B2B special report on B2B marketplaces.)
DC360B2B: How many buyers and sellers are on the marketplace now? At last count, we had 8,500 users and 86 active storefronts.
Butters: Our goal is 10,000 users and 100 storefronts by the end of the year.
DC360B2B: What are sales year to date and what are you forecasting for the year?
Butters: $8 million in sales year-to-date and forecasting $20 million in sales.
DC360B2B: What’s new with features on GoDirect Trade?
Butters: We now offer “lease listings,” which was started by SIA Engineering Co. in Singapore realizing that airlines in Asia Pacific might be cash-strapped, so a leasing option might be a better alternative for them.
We also are now offering virtual and regular consignment services.
Companies like airlines, that historically were focused on keeping passengers flying, might want to sell and offload inventory for cash, but they’re not used to trading, buying, and selling inventory. Companies like HAT can sell their inventory for them by using a consignment model. Editor’s note: Honeywell Aerospace Trading (HAT) is a virtual consignment service and sells inventory through GoDirect Trade.
These two new features are targeted at adjusting or pivoting in this challenging economic environment.
DC360B2B: What are the biggest challenges aerospace parts buyers face using any marketplace these days?
Butters: Demand is just down, everywhere. Everything is really tied to flight hours, which are just down in a big way.
Airlines and operators are still buying parts, but they’re not buying parts and stocking their shelves with spares. They are buying parts to keep the bare minimum flying.
DC360B2B: How big an impact do you think vertical marketplaces such as yours are having on B2B ecommerce?
Butters: I think that there are a few things that marketplaces and ecommerce solutions will impact in this challenging environment:
When consumers want to buy parts, they’re going to want the parts they can buy as efficiently as possible with straightforward “trace.” Yes, everyone is looking to save money and buy at “best price,” but as procurement departments are sizing down, you don’t have enough bodies to get 3-5 quotes on every part you’re searching for.
Ecommerce makes buying parts a “click of the button” type thing versus 3-5 quotes of going back and forth to negotiate. GoDirect Trade also offers all quality documents online for free, like the 8130 tag, so again, that back-and-forth that normally happens, won’t happen because everything is so transparent on the marketplace.
Many, many jobs are going virtual right now. GoDirect Trade as a marketplace enables your “sales force” to sell from anywhere and your buyers to “buy from anywhere.”
This abrupt move to “everything virtual” could be the catalyst GDT needs to move this $4 billion industry to doing more—or all—of its transactions online.
DC360B2B: What else is new with GoDirect Trade?
Butters: Our focus is to continue to get more and more sellers on the marketplace to gain a critical mass of supply. Over the past month, we’ve seen record levels of search activity, and we’ve seen our search success rate boost from 60% to 78%, which means buyers can find more of what they’re looking for.
Just like the Amazon model that seeks to provide one of everything, we need to continue to look at our analytics and search for sellers so they can supply parts and get our search success rate up to 100%.
(Lisa Butters will speak on trends in B2B marketplaces at this year’s B2B Next conference.)
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