The Benefits of a Multi-Vendor Marketplace with Dropshipping in B2B Ecommerce

Businesses need to constantly seek innovative strategies to stay competitive and meet the demands of the market. While multi-vendor dropshipping has been a game-changer in the DTC (direct-to-consumer) sector, its potential for manufacturers and distributors is only expanding. Multi-vendor dropshipping offers many advantages that can revolutionize the way B2B companies operate, from reducing overhead costs to enhancing product offerings. 

In this blog post, we will explore the benefits of integrating multi-vendor dropshipping into your B2B business and how BigCommerce and Logicbroker have been a catalyst for growth and efficiency for Orangetheory Fitness (OTF).

How Orangetheory Fitness Benefits from a Multi-Vendor B2B Dropshipping Marketplace

With Orangetheory’s unique franchise model, the organization noticed that its franchisees were spending an increasing amount of time shopping for miscellaneous goods like cleaning supplies and water bottles, rather than working on building relationships with members. 

Co-founder and CEO Dave Long proposed building a targeted multi-vendor B2B marketplace, driven by dropship vendors, that would allow franchisees to directly purchase approved equipment and supplies, driving growth and efficiency in six key areas:

1. Reduced inventory costs.

Managing evolving inventory needs was one of the most significant expenses for Orangetheory Fitness franchises. Traditionally, franchises are required to purchase large quantities of needed stock upfront, store it in their stores, and manage inventory levels diligently. This approach ties up substantial capital and comes with risks such as overstocking or dealing with unsold inventory. 

To help alleviate these concerns, Orangetheory’s proprietary marketplace allows franchisees to quickly buy approved products and have them shipped directly to the store, negating the need to overstock inventory for day-to-day operations.

B2B benefits:

Cost Savings: Dropshipping eliminates the need to invest heavily in inventory. Since products are purchased from suppliers only after a sale is made, you avoid the substantial upfront costs associated with stocking goods. This frees up capital that can be redirected towards other critical areas of your business, such as marketing or technology investments.

Risk Reduction: The risk of overstocking or ending up with obsolete inventory is significantly minimized. In industries where products can quickly become outdated due to technological advancements or changing trends, dropshipping provides a safety net by allowing you to offer the latest products without the risk of unsold stock.

2. Lower operational expenses.

Operational costs extend beyond just inventory. They include expenses related to warehousing, packaging, shipping, and handling returns. These tasks require resources, both in terms of staff and infrastructure.

Orangetheory estimates that in a typical year, approximately 6,500+ hours are saved for their studios, in total, using the B2B dropshipping marketplace. This is calculated as an average of 30 minutes of time savings per order placed for franchisees that previously had to leave the studio to shop or browse online through multiple stores.

B2B benefits:

Streamlined Operations: By leveraging dropshipping, the logistical responsibilities shift to the supplier. They handle the storage, packaging, and shipping of products directly to your customers. This streamlines operations, allowing you to operate with a leaner organizational structure.

Labor Savings: With reduced need for warehouse staff and logistics management, you can save on labor costs. Your teams can focus on core business activities such as sales, marketing, and customer service, which are crucial for growth.

3. Wider product selection.

In the B2B sector, clients often look for suppliers who can meet a wide range of their needs. Offering a diverse product catalog can set you apart from competitors and attract a broader customer base. For Orangetheory, offering more diverse products was a way to quickly delight franchisees without disrupting their brand identity.

What started as a way to save time has evolved into a co-branding opportunity for suppliers like PATH, a customizable eco-friendly bottled water company. Because of their dropshipping marketplace, PATH now sells exclusive Orangetheory branded pre-filled bottled water in reusable and refillable aluminum bottles for all franchisees.

B2B benefits:

Diverse Catalog: For other B2B organizations, dropshipping allows you to collaborate with multiple suppliers to offer an extensive array of products. This means you can cater to various industries or niches without the need to physically stock all these items.

Market Competitiveness: By providing a one-stop-shop experience, B2B organizations can enhance customer satisfaction and loyalty. Being able to adapt quickly to market trends and customer demands keeps your business relevant and competitive.

4. Faster time to market.

In traditional models, bringing a new product to market involves sourcing, purchasing, and stocking inventory before sales can begin. This process can be time-consuming and delay revenue generation. For OTF franchisees, this process was the difference between more customers and simply having products on hand for the staff. 

With Logicbroker leading the way for all supplier connections, Orangetheory Fitness officially launched with five suppliers onboarded and connected in just a few weeks. 

B2B benefits:

Quick Launches: Dropshipping allows you to add new products to your online store almost instantly. As soon as a supplier has a product available, you can list it on your platform and start selling.

Competitive Advantage: Being first to market with new products can give you a significant edge over competitors. It also allows you to capitalize on emerging trends and customer interests promptly.

5. Improved cash flow.

Cash flow is the lifeblood of any business. Traditional inventory models can strain cash flow due to the need for upfront capital investment in stock. With the OTF marketplace officially online, over 1,700 U.S. locations now benefit from the ability to pick and choose approved products as needed, rather than weeks in advance. 

B2B benefits:

Pay As You Sell: With dropshipping, you only pay for a product after you have sold it and received payment from your customer. This model significantly improves cash flow management, reducing financial strain and increasing liquidity.

Reduced Financial Risk: Lower upfront costs mean that your business is less exposed to financial risk. You can operate more sustainably, especially during periods of economic uncertainty.

6. Focus on core competencies.

With operational complexities reduced, Orangetheory was able to dedicate more resources to areas that directly contribute to their business growth.

“We are focused on building upon our OTF-centric marketplace, similar to Amazon, but with OTF-reviewed and approved products and educational content just for Orangetheory Fitness studios. We wanted to make it much easier for our franchisees to get the supplies needed to run their studios, saving them time to focus on our members,” said Joe Nardolilli, Senior Director of Retail Ecommerce, Orangetheory Fitness

B2B benefits:

Enhanced Customer Service: With less time spent on logistics, other B2B organizations can focus on building stronger relationships with their clients. Excellent customer service has proven to lead to increased loyalty and repeat business.

Marketing Efforts: Investing in marketing strategies can expand your reach and attract new customers. By highlighting your wide product range and quick fulfillment capabilities, you can differentiate your brand in the marketplace.

The final word

Incorporating dropshipping into your B2B commerce strategy offers a transformative approach to business operations. By significantly reducing overhead costs and mitigating risks associated with traditional inventory management, dropshipping allows businesses to be more agile and responsive to market demands. The ability to offer a wider range of products without the financial burden of stocking inventory means you can meet diverse client needs and stay ahead of industry trends.

Additionally, the improved cash flow and reduced operational complexities enable you to invest more in customer service and marketing — areas that directly impact your bottom line. In an era where customer expectations are continually rising, and the market landscape is increasingly competitive, dropshipping provides a strategic advantage that can propel your business forward.

For Orangetheory Fitness, embracing dropshipping was not merely a logistical decision but a strategic move that aligned their thousands of franchises to modern ecommerce practices. It empowered each individual franchisee to scale efficiently, adapt quickly, and focus on delivering exceptional value to their customers. By integrating dropshipping into their B2B operations, OTF positioned its business for sustained growth and success.

We hope this comprehensive exploration of dropshipping benefits in B2B ecommerce has provided valuable insights. If you're considering making the transition or simply want to learn more, feel free to reach out to BigCommerce or Logicbroker to learn more. The future of B2B ecommerce is here, and dropshipping could be the key to unlocking your business's full potential.