*By Carlo Versano* Alibaba Group ($BABA) is making its biggest foray into the huge U.S. business to business (B2B) market, announcing Tuesday that it will allow American small businesses to sell their wares to other businesses around the world on the flagship Alibaba platform for the first time. "Our mission is to make it easy for all businesses everywhere to do business anywhere," said John Caplan, head of Alibaba's North American B2B unit in an interview on Cheddar announcing the expansion. Alibaba, which started as a "yellow pages of the best factories in China" and has since grown into a business to consumer (B2C) and B2B e-commerce behemoth, enters the U.S. B2B market at a time of cutthroat competition for small business dollars from the likes of Amazon ($AMZN) and others. Previously, U.S. businesses were only able to purchase goods and services via Alibaba.com. The Alibaba platform gives small businesses "everything \[they\] need to operate or source goods globally," Caplan said. Selling on Alibaba gives businesses a storefront with CRM capability and demand, "all in one place." Alibaba monetizes the platform through a roughly $2,000 membership fee, plus extra for advertising opportunities, Caplan said, rather than taking a cut of each sale. That model could be beneficial to small businesses worried about B2B costs cutting into their margins. (By contrast, Amazon takes a cut of each item a third-party merchant sells). "We are not a retailer," he said. "The value chain in B2B is more complex, but it's also a far bigger business." Bigger by an order of magnitude, in fact. The B2B industry is worth nearly $24 trillion, according to the U.S. International Trade Commission, compared to just under $4 billion for the B2C industry. Though Alibaba dominates e-commerce in China, it is still relatively unknown to many American consumers and small businesses. Caplan acknowledged that there is "marketplace confusion" here with regard to Alibaba's businesses, but noted that the U.S. still makes up a full third of the company's global market of buyers. And with more than 70 percent of American small businesses still without a digital presence, the opportunity for Alibaba to become the one-stop shop for manufacturers, distributors, and wholesalers is massive, Caplan said, opening them up to a global marketplace of buyers who were previously unattainable.

Share:
More In Business
Is U.S. Restaurants’ Breakfast Boom Contributing to High Egg Prices?
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
Trump Administration Shutters Consumer Protection Agency
The Trump administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down the agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. Russell Vought is the newly installed director of the Office of Management and Budget. Vought directed the CFPB in a Saturday night email to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. The agency has been a target of conservatives since President Barack Obama created it following the 2007-2008 financial crisis.
Load More