Let’s focus on open marketplaces in chemical for a moment

An open market is different from a closed market or ecosystem, and understanding the differences is essential for all parties to talk about the same things, manage expectations, and communicate with customers, distributors, and value chains.

A closed market is usually owned by producers, while an open market operates independently of producers. In an open market, your competitors may be right next to you, offering exactly the same product at different prices. In a closed market, you can decide who or what the people next to you are, but you should also strive to get complementary products on your platform, because your competitors may not want to introduce their customers to you and risk losing them. So when you can work "as usual" in a closed market, you still have to manage the increased customer expectations. Even so, most companies prefer closed markets because it gives them a sense of control.

Another model is ecosystem, which helps customers get the most benefit from products by providing additional third-party services (such as charging, finance, supply chain services, etc.). It can be owned or used, but it's different from open markets because you can't find competitors here. On the contrary, consumers get a range of products. Compared with the closed market, ecosystem can manage the level of user participation independently of the product itself.

An open market is a place where your company can not only buy and sell materials and services, but also understand market trends and demands at a glance. Here, you can also seek support from independent consultants to overcome digital challenges due to limited internal capabilities. Imagine that the business will be combined to trade.

It's easier for a company to separate expert services from the overall product price and offer it as a consultation to customers: you pay for what you get. Why do customers pay for your sales or technical services every time they buy your product, even if they only need your advice and service when they first buy it?

Letters of credit may become obsolete, and with its emergence, financial services will only intervene when needed, a frustrating and time-consuming process that is obsolete for all parties. Transportation and logistics will become transparent, capacity will be used more effectively, and those who should listen carefully will eventually hear the voice of customers.

Today, half of B2B buyers are between 24 and 39, Walker.com It is estimated that by 2020, the customer experience will surpass the position of products and prices in B2B sales. It's only a matter of time before the first wave reaches the chemical industry. It's time to rethink what we know about the business, develop an omni channel strategy, and put customer comfort first.

As with any change, no matter how necessary or how good, it means risk. For example, you need to create new revenue streams because you are likely to lose some profits. Transparency is the key; you can't hide price and availability. Something that sounds non scalable may become your next generation business. Services cost money. If you can provide them, why don't you get a good share of the revenue? I remember a company that sold books but never owned them. This story may also take place in chemistry.

The chemicals industry is complex; it's not like selling shirts or candles. It is highly regulated and driven by contract, politics and other factors. Nevertheless, customers should be given a more personalized, simpler and more comfortable way to do business. The era when you can solve the challenges on your own is over, and the voice of customers can be turned up or down to provide the best service for you.

If you are considering putting your product on the market, make sure you have a clear understanding of the potential business model. They can help you, but they can also damage your reputation and market prices. Also, don't expect the world to wait for you to eventually sell your product in a new channel. You need marketing and communication to spread the message. Finally, when purchasing products in the market, it is not expected that all people will provide new channels of products with the same old processes and gaps.

Don't underestimate the challenges of being successful in the market, as this is not the typical business model that chemical companies are used to. Using the market as an alternative sales channel is possible, but the marketing strategy looks different. This is the main reason why such projects often fail. For you, running your business in the market is the ultimate opportunity to build a new, digital business model, with new revenue opportunities, but it requires new measures, different approaches, new skills and partners.

Article source: https://article-realm.com/article/Finance/8455-Let-s-focus-on-open-marketplaces-in-chemical-for-a-moment.html