There is a misconception that the construction industry prefers to do business face-to-face or over the phone. Hence, the industry does not need a digital marketplace. Of course, many companies in this industry do like to do business over the phone as well as face-to-face but research shows that the industry is shifting towards eCommerce, especially for heavy equipment and parts. Nearly 50% of companies in the construction industry are embracing eCommerce and looking for service providers online.
Hence, it makes sense to set up a service marketplace for construction industry, a platform that completely meets the needs of this industry. The construction industry is unique and different from other industries. As a result, the marketplace should ensure that it is geared to meet the specific requirements of this industry. So, if you are planning to launch an online marketplace, you should think about setting up one for this industry.
Here are some reasons to launch a marketplace aimed at the construction industry.
Have Access to Wider Choice
Today, thanks to the internet, construction companies do not have to restrict themselves to a small pool of suppliers. Instead, with the help of a marketplace, they can get access to a wider pool of heavy equipment and parts suppliers, allowing them to find the best-fit service provider.
Since companies can find more service providers in their geographical region without lifting the phone or having face-to-face meetings, they can suppliers who are cost-efficient, quality-conscious, and ready to cater to big or small orders. This enables smaller players in the construction industry to compete on an equal footing.
Bring Industrial Suppliers Together
While industrial suppliers tend to favor in-person service, they also understand the importance of eCommerce. Many large and small suppliers are shifting to eCommerce. Research shows the B2B distributor businesses in this industry are prospering, in particular those who are using eCommerce to provide services to their target audience.
Launching a service marketplace for the construction industry will enable you to attract industrial suppliers so that they can cater to the growing demands of this industry. Some of the biggest suppliers and service providers have realized the importance of using digital channels to boost their revenues and increase sales.
Renting Heavy Equipment is Becoming the Norm
Previously, construction companies used to focus on buying and maintaining heavy equipment. That meant a lot of investment and ongoing expenses. However, this has changed over the years, with more companies looking to rent heavy equipment. It allows them to reduce their capital expenditure while still offering their services to clients.
When you launch a marketplace where B2B companies can connect with each other, it will allow smaller players to get access to the rental equipment. These companies do not have a large budget and hence, they cannot afford to buy heavy equipment. As a result, they cannot compete with bigger players. However, the marketplace gives them an opportunity to get access to cost-effective rentals that, in turn, let them compete with bigger construction companies without feeling inadequate.
Enable Companies to Increase Revenue
A service marketplace can help heavy equipment suppliers to boost their revenues. Presently, the heavy equipment rental business relies on repeat customers. Most construction contractors have a relationship with a few businesses that they like to patronize and this ensures that the rental business has repeat customers.
When these heavy equipment rental businesses shift to a service marketplace, not only can they retain their old customers but they can also get access to new ones. The marketplace introduces new customers to these businesses, thereby letting them widen their reach and get more clients. This is a win-win situation for all stakeholders and helps them increase their revenue.
Connect with Young Millennial Business Owners
According to studies, nearly 73% of B2B business owners are millennials. These tech-savvy youngsters constantly use the internet to research and buy products and services that they require. They harness the power of the internet to get the best deals at cost-efficient prices. So, if a potential service provider does not have an online presence, they will not be able to conduct business with these young business owners.
An online marketplace is a perfect solution. It allows companies to get online even if they do not have the experience and get access to these B2B buyers. This can help companies expand their customer base and connect with more businesses that are interested in what they are offering.
Keep the Middleman Out
With businesses looking to cut costs and pass the benefits to their clients and customers, more are looking to directly work with service providers. Many companies in the construction industry work with wafer-thin margins and if they deal with a middleman, those margins shrink further. Hence, many construction companies now prefer to buy/rent what they need without an intermediary.
A marketplace enables construction companies to connect directly with relevant service providers. Hence, they can save costs and increase their profit margins. Alternatively, they can pass the cost savings to their clients/customers. This scenario is more appealing to a majority of construction companies and that is what is spurring the shift from offline business to online eCommerce. Furthermore, a marketplace allows construction companies to research and analyze the services being provided and that helps them choose the most cost-effective service without compromising quality.
Cater to Modern Construction Companies
The businesses run by millennials do not like working with sales reps. They prefer using self-service tools to order and reorder. Depending on how your marketplace is designed and the kind of service providers you attract, you can meet the expectations of these young business owners.
Heavy equipment and parts suppliers can use an online marketplace to become eCommerce enabled businesses and this, as a result, will allow them to connect with modern and tech-savvy construction companies. Their sales rep can work to convert new prospects rather than spending time trying to handle inquiries and transactions.
These are some of the reasons to start a service marketplace that caters to the construction industry. Presently, there is a dearth of such marketplaces and if you jump in early, your marketplace will be able to take a larger share of the pie before your competition decides to foray into this field.