If you manage B2B procurement or a marketplace, you are bound to come across acronyms and expressions that rarely appear in formal training: RFP, KYC, GMV, DPP, take rate, P2B, DAC7.
Each of these terms describes a concrete decision, obligation or performance indicator. This B2B procurement and marketplace glossary brings together 48 of them, with a short definition and the context in which each is used.
It is designed to be read entry by entry. You do not need to go through the entire glossary to find what you are looking for.
Before signing a contract, a procurement department qualifies, compares and negotiates with suppliers. Seven concepts describe this process, from the initial consultation through to the assessment of the selected supplier.
An RFI, or Request for Information, is used to assess a market before making any commitment. It helps identify suppliers capable of meeting a need, understand their positioning and refine the specifications.
No formal offer is requested and no commitment is made.
On a marketplace, an RFI often comes into play when recruiting the first sellers. At this stage, you are not yet looking for the best price. You are trying to understand who is out there.
An RFP, or Request for Proposal, asks suppliers to submit a detailed technical and financial proposal. It sets out the requirements, selection criteria and award timetable.
It is a decision-making tool for complex projects where price is not the only criterion.
An RFP differs from an RFQ, or Request for Quotation, which focuses on the price of specific products or services.
An RFQ answers the question “how much?”. An RFP answers “how, and at what price?”.
E-sourcing refers to the management of supplier consultations through a dedicated platform. It covers publishing tenders, collecting responses, scoring proposals and awarding contracts.
An e-auction is one possible part of this process. It organises an online auction between pre-qualified suppliers, often in the form of a reverse auction, for volumes or specifications that have already been defined.
E-auctions work well for standardised and competitive purchases. They are less suitable for projects requiring design work, innovation or long-term partnerships.
A framework agreement defines prices, conditions and the scope of a purchase over a given period without committing to a precise volume.
A call-off is an order placed under that previously negotiated agreement. Each entity within the company can then place orders according to its needs while staying within the agreed framework.
This combination avoids launching a new tender every time a requirement arises. In return, it requires rigorous monitoring of volumes and expiry dates.
The Kraljic matrix classifies purchases according to two dimensions: supply risk and the financial importance of the spend.
It distinguishes between:
Each category requires a different approach. Strategic purchases call for partnership. Leverage purchases lend themselves to negotiation. Bottleneck purchases need to be secured, while routine purchases should be simplified.
Supplier due diligence is the process used to verify that a supplier is who it claims to be and is capable of delivering the required level of performance.
It covers financial checks, references and the organisation’s legal compliance.
On a marketplace, due diligence takes place before selling rights are granted. It directly affects both the quality of the offer and buyer confidence.
A supplier scorecard assesses a supplier against criteria defined in advance: price, quality, delivery times, responsiveness and compliance.
These criteria are weighted according to the buyer’s priorities and monitored over time.
A scorecard provides a common basis for decision-making. A supplier whose performance deteriorates against a clearly identified criterion can be addressed much faster than one assessed purely on subjective impressions.
A CFO and a procurement manager do not necessarily look at the same numbers. Seven indicators repeatedly appear in supplier and business reviews.
GMV, or Gross Merchandise Value, measures the total value of transactions processed through a platform over a given period.
It includes third-party seller transactions and does not deduct commissions or returns.
On a marketplace, GMV describes the activity flowing through the platform. The operator’s revenue, however, is calculated from the commissions it earns.
Confusing the two gives a misleading picture of the health of the model. A marketplace can generate high GMV while still producing relatively low operator margins.
AOV, or Average Order Value, measures the average value of an order over a given period.
It is calculated by dividing total sales by the number of orders placed.
On a B2B marketplace, AOV should be analysed by seller segment and buyer type.
If AOV rises while the number of orders remains flat, it may simply mean that the catalogue is becoming more expensive rather than that overall activity is improving.
Tail spend refers to the large number of low-value purchases that are not covered by a framework agreement.
Office supplies, minor equipment and occasional services are typical examples.
Individually, these purchases are too small to justify dedicated negotiation. Taken together, however, they can represent a significant share of the budget while remaining largely unmanaged.
On a marketplace, tail spend is often one of the first sources of potential savings. Consolidating these purchases on a single platform improves visibility and creates opportunities for renegotiation.
Maverick spend refers to purchases made outside approved processes.
They may be made without an amendment, without a framework agreement or even without involving the procurement department.
This is common when procurement tools are too complex or approval processes take too long.
It can be measured by comparing contractual commitments with actual purchases. The gap between the two reveals the proportion of spend that escaped the defined process.
TCO, or Total Cost of Ownership, estimates the full cost of a product or service from purchase through to end of life.
It combines the purchase price, acquisition costs, operating costs and exit costs, including take-back and disposal.
Two offers with the same purchase price may have very different TCOs.
This is the metric that prevents decisions from being made on headline price alone.
Addressable spend refers to the share of overall expenditure that procurement can realistically influence through negotiation or purchasing decisions.
The remainder, such as costs imposed externally or contracted elsewhere, sits outside procurement’s direct control.
Cost avoidance measures an increase in costs that has been prevented through renegotiation, a change of supplier or another procurement decision.
The two concepts help clarify savings claims.
A saving can be observed against an executed budget. Cost avoidance must be demonstrated against a counterfactual scenario.
Supplier KPIs, or Key Performance Indicators, are measurable values used to track a supplier’s performance over time.
They indicate when corrective action becomes necessary.
Typical indicators cover delivery performance, quality, responsiveness and documentary compliance.
They feed into the supplier scorecard.
Without regular monitoring, they are only used at renewal time, which is often too late to take meaningful action.
When a marketplace launches, the vocabulary changes.
Terms such as liquidity, take rate and network effects begin to appear. They do not describe how a company purchases goods or services. They describe the health of the marketplace itself.
This marketplace glossary brings together seven concepts that repeatedly appear in marketplace performance reviews.
The take rate is the commission percentage that the operator charges on each transaction between a buyer and a seller.
It is calculated by dividing marketplace revenue by the value of the transactions processed.
It is the metric that connects platform activity with operator revenue.
A high take rate means little without volume. A low take rate applied to very large volumes can still produce a profitable model.
Both figures need to be analysed together.
Liquidity measures the probability that a buyer’s search will find an offer, and that a seller’s listing will find a buyer.
A marketplace is liquid when a buyer arrives, finds what they are looking for and completes an order.
It is illiquid when that buyer leaves empty-handed.
Liquidity is the first indicator to monitor during launch. It tells you whether the marketplace is functioning before revenue becomes significant.
The match rate measures the proportion of searches or listings that result in a transaction.
Time to match measures how long it takes for a buyer and seller to find a match.
The two should be monitored together.
A reasonable match rate combined with a long time to match suggests that the catalogue eventually converts, but too slowly.
A network effect occurs when adding one user makes the service more useful to other users.
On a marketplace, every additional seller can make the platform more attractive to buyers, while every additional buyer makes it more attractive to sellers.
This is the mechanism that allows a marketplace to grow once it reaches critical mass.
Network effects can also work in the opposite direction.
Too many sellers in a narrow market can fragment demand and make discovery more difficult.
The concentration of supply therefore matters just as much as its depth.
Multi-tenanting describes users who use several competing marketplaces at the same time.
A buyer purchasing both through your platform and through a competitor is not fully loyal to either.
This behaviour can be measured by comparing user transaction volumes across platforms over a given period.
Multi-tenanting decreases when switching from one marketplace to another becomes costly.
Switching costs can be measured in the time required, the data that needs to be re-entered and the working habits that must be rebuilt.
The higher these costs, the more likely users are to stay.
Supply concentration describes the share of marketplace volume represented by its largest sellers.
A marketplace that depends on three suppliers for most of its activity is fragile.
A marketplace where no single seller accounts for a disproportionate share is more resilient and defensible.
This indicator should be monitored on both sides of the marketplace.
Excessive buyer concentration creates the same vulnerability.
A trusted third party is the entity that ensures transactions between buyers and sellers take place correctly.
On a marketplace, the operator takes on this role.
It verifies sellers, arbitrates disputes, secures payments and enforces the marketplace rules.
Trust cannot simply be declared. It is built through consistent monitoring and consistent decisions.
Once a supplier has been selected, the next steps are to order, receive, check and pay.
Seven terms describe this chain.
P2P, or Procure-to-Pay, covers the full operational purchasing cycle, from an internal request through to supplier payment.
It includes approval, purchase orders, goods receipt, invoicing and settlement.
S2P, or Source-to-Pay, extends the cycle upstream by adding sourcing, negotiation and contracting.
P2P focuses on execution. S2P includes strategy.
A purchase order is the commercial document through which a buyer confirms to a seller the goods or services required, together with quantities and specifications.
It commits the company and becomes the reference point for the rest of the transaction.
On a marketplace, the purchase order passes through the platform before reaching the seller’s system.
Its traceability is essential for accounting reconciliation.
Three-way matching checks the consistency between the purchase order, goods receipt and invoice.
The system compares quantities and amounts before authorising payment.
This is the control point that prevents incorrect invoices from being paid.
Without it, discrepancies tend to become disputes.
Lead time is the time between placing an order and receiving the delivery.
OTIF, or On Time In Full, measures the proportion of deliveries received in full and on the promised date.
The two should be read together. One measures duration; the other measures reliability.
On a multi-seller marketplace, both need to be tracked seller by seller.
A one-off delay can be corrected. Repeated delays damage the performance of the entire marketplace.
MOQ, or Minimum Order Quantity, is the smallest quantity that a buyer is allowed to order from a supplier.
It can restrict low-volume purchases and increase tail spend.
Vendor-managed inventory works in the opposite direction: the supplier monitors its customer’s consumption and replenishes stock based on actual usage.
Both mechanisms are negotiated contractually.
They directly affect the responsiveness of the supply chain.
An SLA, or Service Level Agreement, formally defines the level of service expected from a service provider or supplier.
It specifies the scope, each party’s responsibilities and the escalation procedure in the event of a problem.
It becomes contractually enforceable once incorporated into the agreement.
On a marketplace, SLAs most often cover support, processing times and platform availability.
A marketplace that operates independently from the rest of the company’s information system can generate orders that the accounting department never sees.
Three terms describe how this data moves.
EDI, or Electronic Data Interchange, is the computer-to-computer exchange of business documents between partners using a standardised format.
It works without human intervention and replaces paper, fax and email.
Purchase orders, invoices and shipping notices can move directly from one system to another.
EDI remains a core component of B2B integration, including for marketplaces working with established suppliers that already use it.
An ERP, or Enterprise Resource Planning system, centralises a company’s main processes, including procurement, inventory, production, finance and human resources.
It links internal requirements to external commitments.
A marketplace does not replace the ERP.
It connects to it so that orders, inventory and invoices remain consistent across systems.
cXML is a data exchange format used to transmit purchase orders, invoices and shipping notices between systems.
Punchout is the mechanism that connects a supplier’s catalogue directly to its customer’s procurement portal.
The buyer browses the supplier’s catalogue without leaving their procurement environment, and the selected order then flows back into their system.
These two mechanisms are central to integrating a marketplace with an ERP.
They determine the fluidity of order and invoicing flows.
Selecting a supplier is only the beginning.
The relationship must then be managed, expenditure structured and supplier master data kept reliable.
Four concepts form the foundation of this work.
SRM, or Supplier Relationship Management, is the overall management of relationships between buyers and suppliers, proportionate to the criticality of the goods or services being purchased.
Strategic suppliers receive closer attention. Routine suppliers remain on a standard management process.
The objective is to align management effort with actual risk.
Spending the same amount of time on every supplier is rarely efficient.
Category management divides company expenditure into coherent groups of products and services, such as IT, equipment or maintenance.
Each category becomes a management unit with its own strategy, preferred suppliers and performance indicators.
This approach moves procurement away from processing purchases one by one.
It gives management a more useful view of overall spend.
Strategic sourcing manages supplier selection for products and services that are central to the company.
It goes beyond a one-off tender by incorporating market analysis, procurement strategy design and long-term supplier relationship management.
It differs from tactical purchasing, which deals with isolated requirements.
Both approaches coexist in most organisations.
An approved supplier list records suppliers that have been accepted based on their technical, operational or financial ability to meet the company’s requirements.
Being on the list determines whether an organisation is authorised to place orders with them.
On a marketplace, the list grows with every seller whose onboarding process has been approved.
Keeping it up to date protects buyers and the operator alike.
Nine regulatory areas affect B2B procurement and marketplaces.
They apply both to marketplace operators and to the companies purchasing through them.
KYC, or Know Your Customer, verifies the identity of a customer or supplier.
KYB, or Know Your Business, verifies the identity of a company, its legal existence, beneficial owners and financial position.
These checks form part of anti-money laundering and counter-terrorist financing requirements.
On a marketplace, KYC/KYB takes place during seller onboarding.
It determines whether selling rights can be activated and payments released.
The DPP, or Digital Product Passport, is a digital record that accompanies a product throughout its lifecycle.
It documents its composition, origin, manufacturing conditions, repairability and recyclability.
It is provided for under the European Union’s Ecodesign for Sustainable Products Regulation, or ESPR.
The European Commission’s official timetable foresees delegated acts for textiles, aluminium and tyres in the third and fourth quarters of 2027.
Furniture follows in 2028, with mattresses and recycled content requirements arriving in 2029.
Electronic invoicing is becoming mandatory in France for transactions between VAT-registered businesses.
The timetable depends on the size of the company and the nature of the transactions.
A marketplace handling B2B transactions therefore needs to anticipate the compliance of invoices issued by its sellers.
The Digital Services Act, or DSA, is the European regulation governing digital services.
For marketplaces, it requires stronger traceability of sellers offering products or services.
Platforms must collect specific information about each professional before allowing them to sell and must make reasonable efforts to verify the reliability of that information.
They must also provide relevant information to buyers.
In practical terms, seller onboarding becomes a matter of regulatory evidence.
An incomplete seller profile is no longer simply a poor user experience. It can constitute non-compliance.
The P2B Regulation, or Platform-to-Business Regulation 2019/1150, governs relationships between online intermediation platforms and the businesses that use them.
Adopted in June 2019 and applicable since 12 July 2020, it aims to create a fairer, more transparent and more predictable environment for sellers.
It requires operators to provide advance reasons for any restriction, suspension or termination of an account, offer access to a complaints process and reinstate accounts that were closed in error.
It also requires terms and conditions to remain accessible at every stage and obliges platforms to explain the main parameters used to rank offers.
Operators with more than 50 employees and more than €10 million in annual turnover must also implement an internal complaint-handling system.
DAC7, Directive 2021/514, requires digital platform operators to report income earned by sellers using their services.
It entered into force on 1 January 2023 and places responsibility on the platform operator to collect and verify information on each seller.
It also establishes due diligence procedures and penalties for non-compliance.
For a marketplace operator, seller data therefore becomes a tax reporting obligation.
The GDPR governs the processing of personal data within the European Union.
It distinguishes between two roles.
The data controller is the person or organisation that determines the purposes and means of processing: in other words, why the data is processed and how.
The processor handles personal data on behalf of another organisation as part of a service.
On a marketplace, the operator is the data controller for data relating to its own platform and may also act as processor for certain seller data.
Each seller agreement should define these roles explicitly.
The French Duty of Vigilance Law of 27 March 2017 requires companies employing more than 5,000 people within the company and its subsidiaries, with their registered office in France, to establish and publish a vigilance plan.
The plan must identify and prevent risks of human rights violations and environmental harm resulting from the activities of the company and its subcontractors.
For a company opening its marketplace to third-party sellers, the scope of the plan needs to be clarified.
Whether marketplace sellers fall within the supply chain or are considered part of a distribution channel can affect the obligations involved.
In France, payment terms between businesses are regulated by law.
The standard payment term is 30 days unless otherwise agreed, and contractual terms cannot exceed 60 days.
A 45-days-end-of-month arrangement is also permitted where expressly provided for in the contract.
Late payment triggers statutory penalties, together with a fixed recovery fee.
A marketplace that organises seller settlements must ensure that sellers’ payment conditions comply with this framework.
Payments are where a marketplace decides how it handles other people’s money.
This marketplace glossary highlights three concepts that help structure the subject.
A PSP, or Payment Service Provider, is the authorised intermediary connecting the merchant receiving payment, the customer making the payment, banks and payment networks.
It enables businesses to accept several payment methods through a single solution.
In France, these providers are regulated by the Autorité de contrôle prudentiel et de résolution.
On a marketplace, a PSP does more than process payments.
It distributes funds between sellers, deducts the operator’s commission and manages exceptions, including refunds, credit notes and disputes.
Split payment divides the value of a transaction between the different parties involved, such as the seller, the marketplace operator and, where relevant, public authorities.
The amount collected is automatically allocated according to rules defined in advance.
It structures how cash is distributed between the parties.
Poorly designed split-payment rules quickly become an accounting reconciliation problem.
The allocation logic should be defined before launch, not reconstructed afterwards in a spreadsheet.
Escrow allows funds to be held and released only when a predefined condition is met.
The buyer’s money is held by a trusted third party until an agreed event occurs, such as delivery, resolution of a dispute or expiry of a waiting period.
It protects both sides of the transaction.
Escrow differs from split payment: split payment distributes funds that are already available, while escrow holds funds that are not yet releasable.
A marketplace connects multiple independent sellers with buyers on a platform operated by a third party.
E-procurement refers to tools used to structure a company’s purchasing activities, approval workflows and supplier repositories.
The two often intersect, but they do not pursue the same objective.
An e-procurement system controls the spending of the buying organisation.
A marketplace hosts sellers that choose to offer their products or services through the platform.
The same word, “supplier”, therefore refers to two different contractual relationships.
A marketplace operator defines the rules of the platform, selects sellers and ensures transactions are carried out properly.
An e-procurement system applies the rules that the buying organisation has defined for itself.
One makes a promise to sellers. The other serves the buyer.
This distinction is what guides the framing of a project.
Look at which side you are making a promise to, and you will know which model you are building.
This B2B procurement and marketplace glossary is intended as a working reference.
Use it when you need a definition during a meeting, negotiation or project scoping exercise.
Two use cases come up repeatedly.
The first is establishing a shared definition before making a decision, especially when members of a committee are using the same word to mean two different things.
The second is checking what a metric actually measures before committing to it in a business plan.
If a term is missing, it can first be suggested in the comments.
The list will continue to grow as new projects and use cases emerge.
An RFP, or Request for Proposal, is a structured consultation asking suppliers to provide a detailed technical and financial proposal.
It describes the requirements, selection criteria and award timetable.
It differs from an RFQ, which focuses on price, and an RFI, which focuses on market qualification.
GMV measures the total value of transactions processed through the platform, before deducting commissions and returns.
The marketplace operator’s revenue is calculated from the commissions collected.
A marketplace can therefore report a high GMV while generating a much lower level of operator revenue.
Tail spend refers to the large number of low-value purchases that are not covered by a framework agreement.
Individually, these purchases do not justify dedicated negotiation.
Taken together, they represent a significant share of the budget and often remain poorly managed.
Consolidating them through a marketplace improves visibility.
The DPP documents a product’s composition, origin, manufacturing conditions and recycling options.
It is provided for under the European Union’s ESPR regulation.
The first sector-specific obligations concern textiles, aluminium and tyres in the third and fourth quarters of 2027.
P2P, or Procure-to-Pay, covers the purchasing cycle from the internal request through to supplier payment.
S2P, or Source-to-Pay, adds sourcing, negotiation and contracting upstream.
The first focuses on operational execution, while the second also covers procurement strategy.
A punchout catalogue connects a supplier’s catalogue directly to the customer’s procurement portal.
The buyer browses the supplier’s offers without leaving their own procurement tool, and the order is then transferred back into the buyer’s system using a structured data exchange format.
It is one of the key mechanisms used to integrate a marketplace with an ERP.
The take rate is the commission percentage that the marketplace operator charges on each transaction.
It is calculated by dividing marketplace revenue by total transaction volume.
A high take rate is meaningless without volume, while a low take rate on very large transaction volumes can still create a profitable model.
Liquidity measures the probability that a buyer’s search will find an offer and that a seller’s listing will find a buyer.
A marketplace is liquid when buyers arrive, find what they are looking for and complete an order.
It is one of the first metrics to monitor when launching a marketplace.
The P2B Regulation requires marketplace operators to provide reasons for account restrictions or suspensions, offer a complaints mechanism and make their terms and conditions accessible.
It also requires operators to explain the main parameters used to rank offers.
Operators with more than 50 employees and more than €10 million in annual turnover must implement an internal complaint-handling system.
DAC7 requires platform operators to report the income earned by sellers using their services.
Since January 2023, operators have been responsible for collecting and verifying information about each seller and may face penalties for non-compliance.
Split payment distributes an available payment between the seller, marketplace operator and any relevant public authorities according to rules defined in advance.
Escrow holds funds and only releases them when a specified condition is met, such as delivery or resolution of a dispute.
One distributes funds. The other holds them.
TCO, or Total Cost of Ownership, estimates the full cost of a product or service, from the initial purchase price through to operating and end-of-life costs.
Two offers with the same purchase price can have very different TCOs.
It is the metric that prevents procurement decisions from being based on headline price alone.
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