Producer-Centric Marketplace – How Building Materials Manufacturers Are Regaining Control Over Digital Distribution

Introduction: Manufacturers’ Challenges in the Digital Era

The building materials industry currently faces fundamental challenges related to traditional distribution models and growing pressure for digitalization. Building materials manufacturers primarily struggle with limited access to end customers – contractors and investors. Market relationships are mediated through a multi-level distribution chain: from manufacturer through large distributors to local wholesalers and building supply yards. This structure makes it difficult for manufacturers to collect feedback and build loyalty among the actual users of their products.

Additionally, manufacturers experience increasing margin pressure. Each link in the distribution chain adds its margin, forcing manufacturers to compete mainly on price, losing control over the added value of their products. In Europe alone, there are approximately 13,000 building materials distributors, leading to market fragmentation and complicating standardization of end-customer service.

At the same time, the market environment is changing dynamically. More and more B2B customers expect shopping convenience similar to the B2C world – they want 24/7 online access to offerings, the ability to quickly compare prices and availability, and efficient delivery to the investment site. According to recent data, 49% of all B2B spending already occurs online, and within the next 5 years, this percentage will increase to 57%. The COVID-19 pandemic further accelerated these changes, forcing 75% of construction companies to increase investments in digital transformation in 2021.

The development of horizontal marketplaces like Amazon Business or Alibaba has demonstrated the convenience of ordering various products in one place, which is now beginning to apply to building materials as well. It is against this backdrop that the concept of a “Producer-Centric” marketplace emerges as a response to the pain points of the traditional distribution model and an attempt to shift market power from intermediaries to producers.

The Producer-Centric Marketplace Concept

From Supplier to Ecosystem Center

The term “Producer-Centric” marketplace refers to a trading platform model in which the manufacturer (or group of manufacturers) plays a central role in the transaction ecosystem. Such a marketplace is designed to strengthen the manufacturer’s position – giving them direct access to B2B customers (contractors, investors), control over product presentation, prices, and customer relationships.

Unlike typical horizontal marketplaces (e.g., multi-industry platforms like Amazon or Alibaba), where the main distinguishing feature is a wide assortment from many sellers competing primarily on price, the producer-centric model emphasizes high added value from the manufacturer. This means that the platform may offer not only products from one manufacturer but also complementary products from partners, yet the entire ecosystem is curated by the manufacturer and subordinated to strengthening its brand and customer relationships.

Model Definition

A producer-centric marketplace is a B2B digital platform on which the manufacturer sells its building materials directly to end users (construction companies, developers, general contractors), bypassing traditional intermediaries or limiting their role. The manufacturer may use external logistics partners for delivery fulfillment, but the ordering process and business relationship take place between the manufacturer and the buyer.

It is therefore a form of direct digital distribution, supported by technology, which allows bypassing classic wholesalers. This model is possible because the manufacturer provides an online platform (website, mobile app) where customers can browse offerings, place orders, negotiate individual conditions (e.g., prices for large volumes or payment terms), and track order fulfillment.

Differences Compared to Traditional Marketplaces

The “Producer-Centric” marketplace differs from other trading platforms in several key features:

1. Scope controlled by the manufacturer – On typical marketplaces, the manufacturer is one of many sellers and often competes alongside direct rivals, having limited influence on offer exposure. In the producer-centric model, the entire platform is dedicated to a particular brand or sector under the manufacturer’s curation, eliminating direct competition and enabling more personalized customer service.
2. Prioritization of quality and consulting – While neutral marketplaces focus mainly on price and availability, the manufacturer can complement the offer with technical advice, guarantees, loyalty programs – elements building long-term value, not just one-time transactions.
3. Revenue model – In a neutral marketplace, the operator lives off transaction commissions, whereas in the producer-centric model, the manufacturer’s goal is rather to increase its own sales and margins than to collect commissions from others. This allows the manufacturer to afford lower transaction costs or invest these funds in better customer service.

Direct Access to Contractors and Investors

One of the greatest advantages of a producer-based marketplace is direct access to contractors and investors – the key customers in construction. Traditionally, manufacturers were separated from these groups by at least one intermediary level (wholesaler, building supply yard), which made relationship building difficult.

The digital platform changes this arrangement, enabling direct manufacturer-contractor interaction. Such contact brings mutual benefits. The contractor receives first-hand information – has access to complete technical documentation, can ask questions directly to the manufacturer (e.g., via chat with an online advisor), and can submit complaints or comments without intermediaries. The manufacturer, in turn, can actively support its customers: provide application advice, recommend system solutions, warn about potential execution errors.

Collecting and Using Customer Data

A direct relationship with contractors and investors allows the manufacturer to gather rich data about their B2B customers, which was previously difficult or expensive for them. Among the most important data are:

• Profile information about contractors and investors: type of business activity, scale of operations, geographic location
• Transaction data: what products a given contractor buys, in what quantities and with what frequency, seasonality of purchases, average order value
• Purchase preferences: whether the customer chooses premium or economy products, whether they respond to promotions
• Opinions and feedback: product ratings, reported technical problems, improvement ideas

With this data, the manufacturer can better understand the needs of their customers and adapt their offer accordingly.

Loyalty and Partnership Programs

The marketplace enables the manufacturer to actively develop loyalty and partnership programs targeted at contractors. The digital platform allows for full automation and increased attractiveness of such programs. When registering on the platform, a contractor can be automatically included in a loyalty program – each order is tracked, and points or discounts are calculated without additional formalities.

Loyalty and technical programs on the marketplace can take various forms:

• Point-based loyalty programs – For a certain value of purchases, the contractor receives points that can be exchanged for rewards or financial discounts
• Discount thresholds / partnership statuses – The marketplace can assign statuses (silver, gold, platinum partner) depending on the annual volume of purchases, each with specific benefits
• Technical and certification programs – The manufacturer can use the platform to conduct online training and contractor certification
• Promotional actions and bonuses – E.g., free delivery for orders above a certain threshold, gifts for regular customers, extended warranties

The platform facilitates the communication and implementation of such actions, automatically calculating discounts or adding gifts according to set conditions.

Analytics and Data as a New Source of Competitive Advantage

In the marketplace model, analytics and data play a huge role – one could say that data becomes a new currency in the manufacturer-customer relationship. By moving to a digital platform, the manufacturer gains access to a much wider range of information than in a traditional sales channel.

Types of Available Data and Their Application

On the marketplace platform, the manufacturer can collect and analyze the following types of data:

1. Sales data broken down into detailed segments: who buys (customer profile), what they buy (specific products, variants), when they make purchases (seasonality, order frequency), where to deliver (construction site locations)
2. User behavior data on the platform: which products they view most often, which filters they apply, at which stage they potentially abandon the cart
3. Operational and quality data: delivery fulfillment time, delays, number of returns or complaints
4. Financial and transaction data: average order value, preferred payment methods, use of trade credit
5. Marketing data: product reviews, ratings, comments – sentiment analysis of these opinions allows measuring customer satisfaction with particular products

All this information can be consolidated in the manufacturer’s dashboard – an interactive panel with key business indicators, presenting, for example, a sales map, weekly sales trend chart, list of top 10 customers and top 10 products, logistics indicators, and average service rating.

Supporting Business and Production Decisions

Data collected by the marketplace supports business and production decisions at many levels:

• At the strategic level – Demand analysis can guide product policy, e.g., if data shows growing demand for ecological materials
• At the operational level – Precise sales data improves production forecasting, allowing better prediction of how much material will be needed in the upcoming season
• In marketing and sales – Purchase behavior data allows better targeting of promotions, e.g., seeing that a particular customer hasn’t placed an order for half a year, the CRM system can automatically generate a return offer for them

The application of advanced marketing analytics in construction can significantly increase the conversion rate. An example is Saint-Gobain, which through the use of cloud and analytics in marketing increased the conversion rate of online purchases from 10% to 22%.

Key Performance Indicators (KPIs)

Among the most important KPIs to monitor on the marketplace platform are:

• GMV (Gross Merchandise Value) – Total value of goods sold through the marketplace in a specified period
• Number of active customers – How many unique customers made a purchase in the last month/quarter
• Average order value
• Engagement KPIs: number of platform visits, average time spent by the user, number of RFQs
• Conversion rate – Percentage of platform visitors who made a purchase
• Customer retention – Percentage of customers who made a repeat purchase within a specified time
• Order fulfillment time
• NPS (Net Promoter Score) or other satisfaction metric
• Share of online channel in total sales

Monitoring these KPIs over time allows assessing whether the marketplace is delivering the assumed benefits and where it may require optimization.

Synergy with Traditional Distribution Channels

The introduction of the producer-centric marketplace model naturally raises questions about the role of existing trading partners – distributors and wholesalers. The key to success is developing a strategy for cooperation with distributors so that the new channel synergistically complements the traditional network rather than replacing it in a hostile manner.

Strategies for Cooperation with Distributors

The manufacturer can design the marketplace model to address the needs of segments that are difficult or unprofitable for distributors to serve. For example, small, scattered orders from one-person renovation companies may be less attractive to large wholesalers.

Transparent communication with partners is very important. Before launching the marketplace publicly, it’s worth having conversations with key distributors and presenting them with the vision so they feel part of this project rather than its victim.

Distributors can play various roles in the new model:

• Logistics partner (fulfillment) – Wholesalers can be incorporated as local fulfillment centers for platform orders
• Hybrid marketplace – The manufacturer can invite distributors to sell on the platform alongside itself
• After-sales and service support – Distributors can continue to play an important role in the value chain, providing services that the manufacturer does not centrally provide
• Marketing support – Trading partners can support platform adoption, educating customers locally on how to use it

Pricing Policy and Channel Conflicts

To avoid channel conflicts, many manufacturers decide to maintain consistent retail prices between the platform and the traditional market. Prices offered on the marketplace (at least starting prices for typical quantities) should not drastically differ from those at which wholesalers sell to smaller contractors.

The competitiveness of the digital offer is then not based on lower price, but on convenience, availability, and bonuses (e.g., no need for negotiation, delivery certainty). A mechanism can also be introduced where discounts for larger customers on the platform are comparable to those offline.

Logistics and Systems Integration

Using existing distributor warehouses to fulfill orders can shorten delivery times and lower costs. However, this requires system integration – the platform should have insight into partner inventory levels or at least a mechanism for transferring orders.

A distributor serving as a delivery fulfiller must be adequately compensated to have motivation. Often a model is used where the manufacturer invoices the goods to the customer, but logistics is paid for as a service – e.g., the wholesaler’s margin is re-invoiced as a delivery/service cost.

Implementation Process and Measurable Results

Entering the producer-centric marketplace model is a complex undertaking that requires a well-thought-out implementation process. Several main stages of implementing such a platform can be distinguished.

Marketplace Implementation Stages

Stage 1: Strategy and Planning The manufacturer must clearly define the business objectives of the marketplace, analyze the market and competition, secure internal support from the board and key departments, create a business plan with estimated costs and potential benefits.

Stage 2: Model Selection and Technology Partners At this stage, the manufacturer decides whether to build the platform from scratch, use an existing solution, or enter into cooperation with a technology startup. The manufacturer selects a technology provider and designs the main processes (product catalog, shopping cart, payments, logistics module, customer panel, admin panel). Ensuring integration with existing systems is crucial.

Stage 3: Building and Testing (MVP) The actual platform development begins, with high-quality product data being prepared in parallel. After building the initial version (MVP), internal tests are launched, involving representatives from the sales or customer service department. Load and security tests are also conducted.

Stage 4: Pilot and User Onboarding Before full opening, many manufacturers opt for a pilot in a limited scope, e.g., launching the platform for one region or one product group. During this time, training is organized for the team servicing the marketplace, and onboarding of the first customers is conducted.

Stage 5: Full Implementation and Platform Marketing At this stage, the marketplace is made available to a wider audience, an information campaign is launched, customer support (helpdesk) is prepared, and operational procedures are implemented at full scale.

Stage 6: Scaling and Functionality Development After successful launch, the manufacturer plans further development, adding new product categories, new services, introducing UX improvements, or entering new markets.

Resources Necessary for Implementation

Each of these stages requires specific resources. It is crucial to build an interdisciplinary project team consisting of IT, logistics, sales/marketing, and finance specialists. Companies often appoint a B2B e-commerce project manager to coordinate the work.

Budget-wise, one must account for platform development/license costs, IT integration, marketing, and ongoing service. In the initial phase, ROI may be negative – it is an investment that is expected to pay off over several years.

Measuring Success and ROI

It’s worth defining measurable results and KPIs for implementation success in advance. Such indicators include, for example: number of registered customers after 6 months, value of sales through the platform in the first year, reduction in order handling cost, shortening of order fulfillment time, decrease in the number of errors.

Companies often look at several aspects of ROI. Direct financial ROI is a comparison of the costs of implementing and maintaining the platform with the additional margin generated by it. ROI can result not only from sales growth but also from cost optimization, e.g., through order process automation or better inventory management.

Benefits should also include strategic aspects, such as independence from intermediaries, acquiring a contact database of end customers, or strengthening customer loyalty.

Case Studies and Market Examples

Schüttflix – “Uber” for Construction Aggregates

Although Schüttflix is not a single manufacturer but a startup platform, it deserves discussion as a case study of successful digitization in the bulk materials segment. The platform started in Germany, connecting aggregate producers (quarries), dump truck carriers, and earthworks contractors needing sand, gravel, and crushed stone.

Schüttflix offers a mobile application through which the contractor can order a specific amount of aggregate with delivery, and the algorithm automatically connects them with the nearest supplier and transport company. The platform is successful – it is already present in Germany, Austria, the Czech Republic, and since 2022 also in Poland.

After the first year of operation in Poland, over 900 companies were using the platform, and more than 300 delivery projects were completed, including large contracts covering over 1,000 transports each. The Polish branch of Schüttflix noted faster development in its first year than the home market in the analogous period.

A key aspect of success was ensuring that Schüttflix does not try to push out existing players but acts as an integrator. It was possible to convince market participants that the platform’s services complement their activity and do not enter traditional business domains.

Cemex – Digital Leader Among Heavy Materials Producers

Cemex, a Mexican cement conglomerate operating globally (also in Poland), is an example of a manufacturer that has implemented its own digital platform to serve customers. Their Cemex Go system allows customers to order concrete, cement, and other products online, manage delivery schedules, track the status of concrete mixers en route, and even access documents through the application.

The results are impressive: after 4 years of implementation, already 85% of concrete customers and 93% of cement customers were using the platform. Cemex notes concrete operational benefits: thanks to data from Cemex Go, they can predict where demand will increase and proactively send loaded trucks there, which allowed reducing the fleet by up to 35% without deteriorating service. Additionally, the company boasts a high NPS = 74, which it attributes partly to the excellent digital customer experience.

During the pandemic, when contact restrictions hampered traditional sales, Cemex maintained service continuity thanks to the platform. Cemex’s innovation has been recognized – the company regularly appears on change-maker lists precisely for digital transformation in a conservative industry.

Future and Recommendations

Looking into the future, one can expect that marketplaces in the building materials industry will play an increasingly important role and undergo further evolution.

Trends and Forecasts

Forecasts indicate that the share of e-commerce channels in building materials trade will grow dynamically. Currently, only a few percent of industry revenue is generated online, but by 2030, this part is expected to triple, reaching a level of about 15% or more.

The future market will likely take shape in a hybrid model: large projects will still require direct agreements and tenders, but the entire “long tail” of smaller purchases will move online. It’s possible that several dominant industry marketplaces will emerge, supported by consortia of the largest manufacturers.

Role of New Technologies

New technologies will gradually enrich marketplace functionality:

• Artificial Intelligence (AI) will be used for product recommendations, dynamic price optimization, and as a virtual shopping assistant for contractors
• Augmented Reality (AR) and Virtual Reality (VR) can revolutionize the product selection process, especially for finishing materials
• Internet of Things (IoT) in the construction context will mainly concern monitoring construction sites and material usage
• BIM (Building Information Modeling) can connect with marketplaces, enabling automatic generation of shopping lists based on building models

Recommendations for Manufacturers

For companies considering transitioning to a marketplace model or joining an existing one, a few tips:

1. Start small, think big – begin with a pilot in a specific segment, but have a long-term vision
2. Emphasize openness and integrations – ensure your platform has API and can connect with customer and partner systems
3. Develop digital competencies – identify competency gaps in your organization and fill them
4. Collaborate instead of competing where it pays off – entering into partnership with other manufacturers may be a good strategy, especially for smaller firms
5. Be patient and oriented toward iterations – digital transformation is an ongoing process, plan agile improvements, collect data, improve
6. Measure impact on ESG – in the future, the ESG aspect will be increasingly important, and a marketplace can help achieve sustainable development goals
7. Maintain a pro-customer attitude – never lose sight of the fact that the goal is to make life easier for customers, and technology is just a means

Summary

The “Producer-Centric” Marketplace is not just a new sales channel but a strategic transformation of the manufacturer’s role in the construction industry value chain. It gives manufacturers unprecedented opportunities in building direct relationships with contractors and investors, collecting valuable market data, optimizing processes, and increasing margins.

Case studies of companies such as Cemex or Schüttflix show that this model can bring measurable business benefits, from sales growth and customer loyalty to optimizing operational costs and better strategic decisions.

Manufacturers who do not take steps toward digital transformation risk losing competitive position against those who are already investing in marketplaces. It’s no longer a question of “whether” but “when” and “how” to enter this model in order not to fall behind market innovators.

The future belongs to those who can combine traditional assets (product quality, technical knowledge, relationships) with new digital capabilities (data, analytics, customer experience). Producer-centric marketplaces are the perfect tool for such integration and a key element of competitive strategy in the digital age.