In the IT space, marketplaces are booming.

A recent Forrester study predicted that 17 percent of the tech industry’s $3.5 trillion spend will go through marketplaces in 2023. In other words, nearly $600 billion in technology spending is expected to go through marketplaces in the coming year.

So, the question is, how can channel partners leverage marketplaces to grow their businesses and increase profitability in the coming year?

The Pandemic Accelerated Marketplace Growth — But Opportunities Remain

As the pandemic swept across the globe at the beginning of 2020, companies of all types faced a massive challenge: adapt digitally or risk becoming irrelevant. As a result, e-commerce and marketplaces saw an incredible acceleration in adoption. McKinsey reported that during the early stages of the pandemic, e-commerce market penetration saw 10 years’ worth of growth in just three months. This has fundamentally changed how many channel partners approach their businesses, both from a sales and service perspective.

One of the opportunities that has presented itself is finding new ways to leverage marketplaces or e-commerce as a means of serving your customers. While traditional sales-driven activities conducted face-to-face or over the phone or email remain valuable and essential to relationship-building, the always-on, always-available, self-service model of marketplaces creates new opportunities for customers to discover product offerings. By working with marketplace partners instead of building your own e-commerce platform, you can better serve your customers when they need it.

Identify and Capitalize on Niche Marketplaces

Another opportunity for channel partners is identifying niche marketplaces where your services could be valuable. Like many industries, digitalization has lowered the barrier of entry — and for marketplaces, this means that you will see tremendous growth in smaller, niche marketplaces over the next 3 to 5 years. These can represent significant growth opportunities for channel partners with specific tools, platforms, or expertise that work harmoniously with these verticals. While the marketplaces for organizations like Salesforce and Microsoft represent big business today, the opportunities that may grow in the coming months and years are not to be ignored.

The Marketplace Multiplier

According to Forrester, the average cloud deal creates a 5x multiplier for partners. In other words, for every dollar spent on the product itself, approximately $5 goes into implementation, ecosystem spend, and support. As more organizations create marketplaces and e-commerce portals to sell their products, channel partners have a massive opportunity to act in provisioning, implementing, and supporting those products. Cashing in on this 5-to-1 multiplier opportunity represents incredible potential for the channel.

For channel partners, marketplaces offer a scary but exciting proposition — with incredible earning potential and a bit of uncertainty. But by taking a multi-faceted approach — looking at how you can work with the big players, the niche markets, and also exploring ways to develop your own digital offerings — you can position your organization in a strong growth position and find ways to get a piece of this growing revenue stream.

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