The company’s financial gains reversed recent quarterly declines, as Bodor noted that Protolabs did well in Q3 despite continued softness in manufacturing markets.

Robert Bodor, president and CEO, Proto Labs Inc.

“We continue to accelerate innovation for customers with the fastest and most reliable lead times in the industry,” Bodor said on a Q3 earnings call. “The broader economic environment is still uncertain. Manufacturing conditions in the U.S. and Europe remain soft and have not consistently improved throughout 2023.”

Protolabs revenue in Q3

Despite that economic downturn, Protolabs “grew in the quarter, especially in our digital manufacturing network business,” he said.

Bodor added that Protolabs is gaining market share with larger companies and expanding in new markets.

“Recently, a luxury high-end automotive manufacturer selected Protolabs to assist with its first foray into the electric vehicle market,” he said, without naming the manufacturer.

Bodor added that Protolabs worked with vehicle manufacturer’s design firm, Hutchinson, to make prototypes for and electric vehicle battery pack cooling system.

“We rapidly manufactured injection molded parts, which meant stringent project timelines and quality utilizing our speed, reliability and quality,” he said.

Bodor noted that Protolabs’ traditional business over most of its 24-year history has been in manufacturing prototypes of parts that customers use in designing and testing new products. But it is now seeing growing demand for parts that customers use in the production of final products.

Protolabs “is becoming a one-stop shop for custom prototypes and low-volume production,” he said.

Protolabs’ services include:

• Injection molding
• 3D printing
• Sheet metal
• CNC machining

CNC machining is a manufacturing process in which pre-programmed applications dictate the movement of factory tools and machinery. The process enables three-dimensional cutting tasks to be accomplished in a single set of prompts.

Protolabs reported for the third quarter ended June 30:

• 23,800 product developers served by its digital manufacturing.
• Gross profit of $59.28 million, for a gross margin of 45.4%. That’s up from $53.6 million and 44% a year earlier.
• $19.5 million in earnings before interest, tax, depreciation and amortization (EBITDA) or 14.9% of revenue. That’s up from $11.4 million and 9.3%.
• Net income of $7.95 million, up from $3.95 million.

For the nine months ended June 30:

• Revenue of $166.18 million, nearly unchanged from $166.85 million a year earlier.
• Net income of $10.32 million, down from $11.60 million.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Protolabs update.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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ACV Auctions is a Buffalo, New York-based B2B marketplace. On it, used-car dealers view, bid on, and purchase used-car inventory.

ACV Auctions B2B marketplace

But ACV Auctions’ B2B marketplace total revenue, including marketplace and service revenue, grew 13%. That’s an increase to $119 million from $105.4 million in the prior year. Net loss was $18.2 million compared with a net loss of $23.6 million in the third quarter of 2022.

“We sold 150,000 vehicles in the quarter, resulting in 13% year-over-year growth, reflecting further adoption of our marketplace solutions targeting dealer engagement,” CEO George Chamoun told analysts on an earnings call. “GMV of $2.1 billion was flat year over year, reflecting continued moderation of wholesale market prices.”

ACV sees stronger growth ahead as the wholesale and retail market for used vehicles begins to normalize after inventory shortages in recent years, Chamoun said.

“While volumes continue to lag pre-pandemic levels, inventories improved, which is key to supporting a sustained recovery in retail sales, trade and dealer wholesale supply,” he told analysts. “Used vehicle retail units modestly increased sequentially and year over year, but also remain well below historical levels as affordability issues continued to pressure consumer demand. In terms of vehicle sourcing, our data indicates that dealers retain a higher-than-normal percentage of trade for retail inventory.”

For the fourth quarter and the full year, ACV Auction B2B marketplace projects:

• Total Q4 revenue of $116 million to $120 million, an increase of 18% to 23% year over year and a GAAP net income loss of $24 million to $26 million.
• Total yearly revenue of $479 million to $483 million, an increase of 14% to 15% year over year and a GAAP net income loss of $75 million to $77 million.

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Yoav Kutner

The distribution industry stands at a crossroads. For decades, the familiar model of manufacturers selling to distributors who then sell to customers has been foundational across industries. But with the emergence of digital tools that empower manufacturers to deal directly with consumers, this time-honored structure has faced deepening disruption.

While distribution remains essential, manufacturers can now own the customer relationship end-to-end with little input from intermediaries. Combined with the meteoric rise of ecommerce, this direct-to-consumer revolution threatens to make distributors obsolete. Amazon and other digital juggernauts are also building formidable logistics capabilities that threaten to undermine the function of traditional distributors.

To survive in this new paradigm, distributors must take a page out of the D2C playbook and undergo their own digital transformation. They need to reimagine their value proposition and business models for an increasingly tech-focused world. Distributors that fail to adapt risk losing relevance as manufacturers bypass them to sell directly to customers online. The choice for the distribution industry is clear: digitize or die.

The threatening dawn of D2C

D2C represents an existential threat to the traditional distribution model. Manufacturers are rapidly exploring innovative sales channels that feed directly to end users, taking cues from disruptive startups like Dollar Shave Club and Casper. These digital native D2C brands have shown that enormous success can be achieved when control over pricing, customer relationships, and end-to-end experiences is kept in-house.

For manufacturers, D2C delivers a gold mine of customer data to tailor products and personalize engagement. Combined with the explosive rise of ecommerce, producers now have direct access to vast pools of customers without the need for distributor middlemen. This trend is unlikely to peter out; between 2019 and 2022, customer-direct purchases increased by almost a third, with sustained growth forecasted through the middle of the decade and beyond.

As D2C continues to gain momentum, distributors are likely to find once-reliable clients starting to question indirect sales. This is particularly true of manufacturers who’ve sunk millions of dollars into their own digital capabilities, and, as a result, are rapidly seeking higher margins by eliminating intermediary markups.

A narrow window of opportunity 

Despite this, distribution remains essential across the majority of modern industries. Distributors provide vital value through their technical expertise, expansive product selection, and customer service. But much of this value can now be replicated or replaced through technology. Even the least future-facing manufacturers are wondering whether they need third-party distributors to the extent they once did — thanks, not least, to the sudden emergence of eye-catching alternatives.

Powerful ecommerce enterprises, like Amazon and Alibaba, have surged into the packing and delivery spaces, offering services once fulfilled solely by distribution specialists. Their expertise in digital shopping and advances in logistics allow cost-effective shipping of products — including large and bulky items — neutralizing an advantage established distribution players previously enjoyed. These digital disruptors are also beginning to match distributors in terms of technical proficiency, leveraging artificial intelligence, algorithms, and data analytics to close the knowledge gap.

For traditional distribution companies, the window of opportunity to secure a sustainable future is closing fast. But it isn’t too late for these tried-and-true providers to cement themselves as essential cogs in the ecommerce machine. To remain relevant in a rapidly digitizing world, they must recognize the need for reform, casting aside antiquated models to deliver the experiences that modern-day manufacturers — and their customers — want.

An investment worth making

Moving forward, distribution leaders must strive to deliver seamless omnichannel journeys formulated to meet fast-evolving customer expectations. Siloed channels and fractured data severely degrade these experiences, so the focus should be on unified commerce solutions spanning web, mobile, and marketplaces.

Investing in flexible, customizable B2B ecommerce platforms purpose-built for the distribution space provides a strong foundation for unified commerce, empowering distributors to blend digital efficiency with high-value account management and the other areas in which they excel.

To fortify fulfillment and logistics as customer demands escalate, distributors must also optimize supply chain operations for speed, transparency, and flexibility. They can achieve these operational improvements by digitizing warehouse management, selectively applying automation, exploring innovative last-mile delivery partnerships, and closely monitoring supplier relationships. While superior fulfillment and logistics remains a distributor stronghold, digital disruptors are advancing quickly, so established disruption players must urgently double down on this advantage before it evaporates entirely.

In both the short term and the long term, those that modernize their supply chains will gain a powerful competitive edge. However, to truly thrive in the evolving distribution landscape, distributors must expand their value proposition far beyond just moving products.

Doing so requires a realization that they shouldn’t be competing with manufacturers, but rather complementing their operations. This means providing services, insights, and specialist know-how that make them the expert distributor, an indispensable partner. With knowledge and relationships baked deeply into the customer experience, manufacturers will be less incentivized to cut distributors from the chain — especially in economically uncertain times when increasing value is imperative.

Ready to thrive 

There’s no doubt that D2C is here to stay, but manufacturers will continue to seek the services of digitally enabled distributors who provide value far beyond basic order fulfillment. That’s why, to remain competitive, distribution players must augment their value proposition by evolving into trusted advisors and strategic partners.

Getting this right relies on comprehensive digital transformation encompassing ecommerce, supply chain, and service delivery operations. Distributors that fail to adapt their business models and stubbornly cling to antiquated, unsophisticated approaches will inevitably fail.

Adapting to this new distribution reality is no small task. But it has become necessary for survival — and with the right tools and technology, it can be a remarkably painless process. With commitment to change, investment in digitization, and a tireless customer focus, distributors can reinvent themselves as next-generation enterprises ready to thrive in all market conditions — now, and in the future.

Yoav Kutner is co-founder and CEO of Oro Inc., an open-source business technology company serving B2B merchants.

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For the third quarter ended Sept. 30, Global Industrial posted sales of $354.6 million. That’s an increase of 18.8% from sales of $298.5 million in the third quarter of the prior year. Net income also grew, reaching $20.7 million compared $20.3 million in Q3 2002.

“Top line performance was once again led by our ecommerce channel, as recent investments and actions to drive digital transformation and enhance the online shopping experience are delivering returns,” says CEO Barry Litwin.

For the first nine months of the year, Global Industrial sales increased 5.4% to $954.2 million. That’s compared to $905.6 million in the prior year. “We continue to leverage digital marketing to deliver healthy customer acquisition and retention rates,” Litwin told analysts on the recent earnings call based on a transcript from Seeking Alpha. “Our web and marketing teams have been doing an outstanding job executing on our strategy, and we’ve been very pleased with the recent ecommerce performance.”

For the year, Global Industrial is counting on basic business performance and smaller customer orders to generate sales. “Our direct one-to-one sales channel remains a key focus to deepen customer relationships, build larger accounts and expand into new end markets,” Litwin told analysts. “While we did see some nice gains in select national and public sector accounts, and overall order volume improved, we continue to see muted large order volume. This reflects the cautious customer behavior we’ve observed throughout the year.”

About 60% of all Global Industrial sales are now generated digitally, the company said in the second quarter.

Percentage changes may not align exactly with dollar figures due to rounding.

Check back for more earnings reports.

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B2B marketing, sales, and product teams face a turbulent year ahead. It will be full of partner-centered growth and productivity ups and buyer demands, technology, and regulatory/legal downs. Generative AI will launch the potential for sweeping impact across all teams with a mix of success and failures expected during the next 12 months, Forrester says.

Here are three ways generative AI will change the world of B2B marketing

1. Millennials take charge

2 out of 5 Millennial buyers will demand early access to B2B product experts. Forrester predicts that 40% of younger buyers will rate person-to-person meetings with product experts as their most meaningful personal interactions.

Key takeaway: B2B sellers should forge effective partnerships with product experts and orchestrate all person-to-person interactions.

2. AI will play a big role in product development

Generative AI will surface insights that dictate one in five new B2B product launches. In 2024, Forrester expects product teams to adopt generative AI for idea identification and innovation because of its ability to rapidly sort through customer data for insights. Using generative AI to expedite reviewing an even wider variety of win/loss, competitive intelligence, and customer feedback sources will help to identify novel or non-obvious capabilities that make it into 20% of products launched.

3. Early and rushed AI may backfire B2B marketing efforts

Thinly customized generative AI content will degrade purchase experience for 70% of buyers. B2B buyers saturated in vendor content will have to sort through even more, as marketers and sellers adopt the rapid repackaging and reuse capabilities that generative AI delivers.

Key takeaway: Early experiments will struggle to produce more than simple vertical veneers, poorly personalized offers, or prospecting messages aimed at existing customers, giving buyers more of what they don’t want, Forrester says. Growing frustration will cause more than 70% of business buyers to voice displeasure about the material vendors share.

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The metalworking and industrial supplies distributor said sales increased 8.6% year over year to $4.009 billion. And that happened even though MSC Industrial ecommerce sales, which account for more than 60% of total sales, slid by 3% year over year in the fiscal fourth quarter. Gershwind attributed the drop in digital sales mainly to public sector sales occurring in non-ecommerce channels.

Kirsten Actis-Grande, executive vice president and chief financial officer, MSC Industrial Supply Co.

MSC Industrial ecommerce sales

Full-year MSC Industrial ecommerce sales, however, rose 9.1% to $2.45 billion. Gershwind and Kirsten Actis-Grande, executive vice president and chief financial officer, said they expect to see improved ecommerce sales, especially as MSC rolls out upgrades to the company’s flagship ecommerce site, MSCDirect.com.

“Looking forward, we expect improvement in our ecommerce sales, particularly through MSCDirect.com, as we start rolling out enhanced capabilities, including improved search and navigation functions,” Actis-Grande said on a Q4 earnings call with investment analysts today.

Gershwind added that the “heavy-lifting” on ecommerce improvements have already been completed and that the ecommerce upgrades will occur “over the next quarter or so. … That’s when customers will begin seeing an impact.”

Still, he cautioned that the impact of better ecommerce technology will not be like turning on a light switch.

“This will build over time,” said, adding: “It is one of the things, though, that gives us confidence beyond this year.”

MSC Industrial defines ecommerce sales as those through digital channels including its ecommerce platforms, internet-connected vending machines, EDI, XML-based ordering systems and other electronic portals. MSC’s formal corporate name is MSC Industrial Direct Co. Inc., but it generally goes by the name of its main business unit, MSC Industrial Supply Co.

MSC Industrial earnings

For the fourth quarter ended Sept. 2, MSC Industrial reported:

• Total net sales rose 1.3% year over year to of $1.035 billion.
• MSC Industrial ecommerce sales fell about 3% to $627.1 million, accounting for 60.5% of total sales.
• Gross profit margin of 40.5%, down from 41.9%.
• Net income fell 15.9% to $87.623 million.

For the fiscal year, MSC Industrial reported:

• Gross profit margin of 41.0%, down from 42.2%
• Net income inched up 1% to $343.23 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MSC Industrial report.

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Gaurav Dhingra

India is not only a rising giant in the global arena, but also a booming market for B2B ecommerce. With its fast-growing economy, large population, and digital transformation, India offers immense opportunities for businesses looking to sell their products and services to other businesses online. This article explores why India should be on your radar if you want to succeed in the B2B ecommerce space.

João Manuel

India’s B2B ecommerce market is one of the fastest-growing in the world. By 2030, Redseer projects it will reach $90 billion to $100 billion in gross merchandise volume (GMV). Several factors are driving this growth, such as:

• The increasing demand from small and medium enterprises (SMEs) for a variety of products and services, especially in sectors like packaging, textiles, apparel, and contract manufacturing. SMEs account for about 40% of India’s GDP and employ over 100 million people.
• The availability of affordable and reliable internet connectivity and smartphones, which enable online transactions and communication. India has over 624 million internet users and over 500 million smartphone users, making it one of the largest and fastest-growing digital markets in the world.
• The government’s initiatives to promote digitalization and ease of doing business, such as the Digital India campaign, the Aadhaar biometric identification system, the Unified Payments Interface (UPI), and the Goods and Services Tax (GST). These initiatives have simplified online payments, reduced tax complexities, and improved transparency and efficiency.
• The emergence of innovative and disruptive B2B e-commerce platforms that connect buyers and sellers across the country and offer solutions for vendor management, supply chain automation, and supply chain financing.

India’s B2B ecommerce market is large, diverse and dynamic. It caters to different segments of buyers and sellers, such as wholesalers, retailers, manufacturers, distributors, service providers, and exporters. It also covers a wide range of product categories, such as industrial goods, consumer goods, agricultural products, healthcare products, and digital services.

India’s B2B ecommerce market is also open to international players who want to tap into this lucrative opportunity. According to a report by PayPal, cross-border B2B ecommerce in India is expected to grow at a compound annual growth rate (CAGR) of 28% from 2021 to 2026, reaching $54 billion. Some of the factors that are driving this growth are:

• The increasing demand from overseas buyers for high-quality and low-cost products from India, especially in sectors like textiles, handicrafts, pharmaceuticals, engineering goods, and software services.
• The increasing supply from Indian sellers who want to expand their market reach and access new customers across the globe.
• The availability of online platforms that facilitate cross-border trade by providing features like currency conversion, payment processing, logistics support, customs clearance, and dispute resolution. Some of these platforms include Amazon Business, Alibaba, eBay, TradeIndia, and IndiaMART.

India’s B2B e-commerce market is also poised to benefit from the recent developments in the global scenario, such as:

• The successful hosting of the G20 Summit in New Delhi onSeptember 9 and 10, 2023, which showcased India’s leadership role in addressing global challenges like climate change, sustainable development, digital transformation, multilateralism, and women empowerment.
• The signing of several trade deals and partnerships with key countries and regions like the United States, the European Union, the UK, Japan, Australia, ASEAN, Africa, and the Middle East, which enhanced India’s economic cooperation and integration with the world.
• The launch of several initiatives to boost India’s manufacturing sector and exports, such as the Production Linked Incentive (PLI) scheme, the Atmanirbhar Bharat (Self-reliant India) campaign, the Make in India program, and the National Export Policy (NEP).

To sum up, India is an emerging powerhouse in the B2B ecommerce space that offers tremendous potential for growth and innovation. If you want to be part of this exciting journey, here are some tips to help you succeed:

• Understand the market dynamics and customer preferences in different regions and sectors of India. Customize your products and services according to the local needs and expectations.
• Leverage the existing online platforms that connect you with potential buyers and sellers in India. Alternatively, create your own online presence and brand identity that showcases your value proposition and differentiates you from the competition.
• Build trust and credibility with your Indian counterparts by providing quality products and services, timely delivery, transparent communication, and responsive customer support. Use online tools like ratings, reviews, testimonials, and certifications to demonstrate your reputation and reliability.
• Comply with the legal and regulatory requirements of doing business in India, such as taxation, customs, licensing, and intellectual property rights. Seek professional advice and assistance if needed.
• Stay updated with the latest trends and developments in the Indian B2B e-commerce market. Adapt to the changing customer demands and market opportunities. Innovate and experiment with new products, services, and business models.

India is a land of opportunities for B2B ecommerce players who are willing to explore, learn, and grow. With its huge market size, diverse customer base, digital infrastructure, supportive government policies, and global outlook, India is the place to be for B2B ecommerce in the 21st century.

About the Authors:

Gaurav Dhingra is the co-founder and CEO of New Delhi, India-based ecommerce marketing agency Refresh Ideas. João Manuel is the founder and CEO of international marketing and public relations firm Vereda, which operates without a specific headquarters but maintains a company website at Vereda.global, with content displayed in the English and Portuguese languages.

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Amazon Business already claims 6 million customers and $35 billion in annualized gross merchandise sales — and it launched just eight years ago. But market analysts figure it is far from reaching a sales plateau.

Colin Sebastian, an R.W. Baird & Co. investment analyst who has accurately forecasted Amazon Business’s sales growth in recent years, has projected $80 billion in gross sales, including many by third-party sellers, before the end of this decade.

2023 B2B Marketplace 500 Report

Analysis of the leading U.S. B2B ecommerce marketplaces. Includes over 20 charts, a downloadable excel spreadsheet listing the top 500 B2B Marketplaces in alpha order, with company name, marketplace industry and URL and the most detailed study of the U.S. manufacturing and distribution marketplace.

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Amazon Business leads a B2B marketplace charge

Many buyers say they purchase from Amazon Business. The marketplace reported in April that it had reached “roughly $35 billion” in annualized gross sales. Nice growth for a marketplace that launched in 2015.

60% of buyers do more than a quarter of their purchasing on Amazon Business, a Digital B2B Buyer Survey found. And 28% say they do more than half. But another 12% say they “don’t buy anything” on Amazon Business — and 29% say they buy on other marketplaces.

Amazon Business is the dominant marketplace, the industry’s most influential marketplace, and by far the biggest, accounting for about one transaction of every four, Digital Commerce 360 projects.

Meanwhile, Amazon is also No. 3 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Amazon ranks No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.

Do you rank in our database?

Submit your data and we’ll see where you fit in our next ranking update.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly. 

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For the fiscal third quarter ended Sept. 30, Watsco said ecommerce sales rose about 15%. Watsco ecommerce sales accounted for about a third, or $702.9 million, of total sales of $2.1 billion. It also noted that ongoing improvements to its digital commerce technology and practices have resulted in a 19% expansion over the past 12 months to 54,000 customers with active ecommerce accounts.

“Our mobile platforms and ecommerce channels have increased customer engagement, reduced attrition, created market share gains, and supported our margin expansion,” chairman and CEO Albert Nahmad said on the company’s recent earnings call with investment analysts.

Watsco ecommerce sales

Nahmad said that Watsco has added over 400,000 new SKUs to its digital product library since the start of 2023. He noted that “approximately 60% of the HVAC systems we are now selling represent new products.”

Watsco notes that its product information management (PIM) database contains over 1.5 million SKUs. They’re available to more than 350,000 contractors and technicians.

In addition, Watsco makes available to professional customers its HVAC Pro+ mobile apps. They provide real-time information to such details as:

• Product specifications
• Technical support
• Inventory availability
• Warranty look-up and processing
• Access to ecommerce ordering

Watsco said it also increased online gross merchandise sales 31% year over year during the first nine months of this year. Those sales grew to $958 million through its OnCallAir digital sales platform and its companion CreditforComfort consumer-financing service.

Digital strategy supports margin strategy

Nahmad said the company’s digital technology strategy is supporting its long-term goals for improving gross profit margin to 30% (up from 26.7% in Q3) while also upgrading how it engages contractors and end customers.

Aaron (“A.J.”) Nahmad, president, said Watsco’s overall digital strategy enables the company “to do analytics on opportunities, enhance our capabilities, and measure and track our successes in all parts of our business — things like prospecting and winning new customers and changing and improving how customers engage with us with things like ecommerce in our apps, which eventually reduce our cost to serve those customers.”

Albert Nahmad asserted that, as Watsco’s financial position continues to improve, it “provides us the flexibility to invest in virtually any opportunity” in the $50 billion North American [HVAC] market.

He added that merger-and-acquisition activity “remains an important contributor” to Watsco’s growth and noted that, in Q3, the company acquired South Carolina-based Gateway Supply Co., a regional HVAC and plumbing supplies distributor, “giving us the ability to partner with great leadership to grow beyond their $180 million sales.” Gateway operates an ecommerce store for HVAC and plumbing supplies and offers contractors online Pro accounts.

Since 1989, Watsco has acquired 68 businesses.

Check back for more earnings reports.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Dan Lewis, CEO, Convoy Inc.

“We are in the middle of a massive freight recession and a contraction in the capital markets,” Lewis said in a memo to employees, whose ranks had been slashed to about 500 from a peak of 1,500 a year ago.

Launched in 2015 under the leadership of Lewis, a former Amazon.com Inc. executive — and operating with financial backing from such investor as Amazon founder Jeff Bezos and Microsoft co-founder Bill Gates — Convoy racked up a client base including such companies as The Home Depot, Unilever, Procter & Gamble and Anheuser-Busch.

But largely because of post-pandemic drop in demand and a challenging investment market, Lewis said Convoy had spent the last several months exploring alternatives, including possible acquirers to maintain its operations.

“Alongside this unprecedent freight market collapse, the dramatic monetary tightening we’ve seen over the past 18 months has dramatically dampened investment appetite,” he said, adding: “M&A activity has shrunk substantially, and most logical strategic acquirers of Convoy are also suffering from the freight market collapse, making the deal that much harder. The perfect storm.”

Mike Brown, general partner of investment firm Bowery Capital, commented in an email to DC360 that Bowery’s  tracking of fundraising data for B2B marketplaces, in general, shows the quantity and monetary value of financings is down significantly.

He suggested that “a macro takeaway” regarding investments in B2B marketplaces “is the cyclicity of the business and difficulty of the business model (including low take rates, high servicing costs, and tough multiples) which we think will scare a lot of venture dollars away.”

Bloomberg News reported yesterday that Convoy is one of many logistics startups hurt by falling prices and demand for shipping along with a downturn in venture capital fundraising. Bloomberg noted that Flexport Inc. and Seattle-based warehousing startup Flexe Inc. have had to lay off workers as demand fell from pandemic highs.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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