Business-to-business ecommerce is the online sale of products or services between businesses. Wholesalers, manufacturers, and distributors benefit from increased efficiency and effectiveness in their B2B buying process because orders are processed digitally.
B2B companies have historically been slow to adopt electronic commerce.
A report by eMarker found that, just before the pandemic hit, only 9% of all B2B product sales in the U.S. were made via ecommerce websites.
B2B companies must keep up with buyer expectations, which are increasing faster than ever due to the pandemic and the influx of millennials into the B2B market.
Cold calling, paper-based B2C transactions, and offline marketing are a thing of the past. B2B customers are looking for the same experience as B2C buyers, and theyre growing increasingly impatient when sellers dont deliver it.
In fact, B2B purchasing decisions are influenced by the direct or indirect experience of a buyer. 87% of B2B purchasers would be willing to pay more for a provider with a superior ecommerce experience and portal, up from 74% and 81% respectively in 2019 and 2020.
B2B sellers are left in the middle of an ever-changing landscape to figure out what the needs of the modern B2B buyers are.
If you are a B2B company stuck in legacy systems it can be difficult to make the digital transition. This guide will help you modernize your B2B company by guiding you through the basics. It includes digital marketing tips, common misunderstandings, benefits of having a platform for B2B and examples from B2B merchants.
Types of B2B Ecommerce
Gartner estimates that by 2025, 80 percent of all B2B transactions between suppliers and buyers will be conducted via digital channels.
In addition, new ecommerce technology is lowering the barriers to entry to allow B2C companies to include a B2B element (B2C2B), and vice versa for B2B businesses to sell directly to consumers (B2B2C).
Youll probably fall into one of these categories if you run a B2B company. Each business has its own strengths and weaknesses, and some may fall into more than one category.
B2B2C
B2B2C refers to business-to-business-to-consumer. E-commerce eliminates the typical intermediary between the B2B company and the B2C, bringing the companies in direct touch with the potential customer.
B2B2C can be best described by examining how a manufacturer or wholesaler interacts with the traditional B2B model.
In these cases, the wholesaler sends the goods to the B2B and then sells them to the final consumers. In a B2B2C business model, a wholesaler or manufacturer can reach the final consumer either by partnering with a B2B or selling directly to them.
These transitions are made online with B2B2C, usually through virtual storefronts or ecommerce sites.
In most B2B2C models, consumers know that theyre getting their products from an organization separate from the one they bought it from.
The consumer can purchase a product through an affiliate blogger but it is sent directly by the manufacturer.
Wholesale
Businesses buy in bulk at a discounted price, then sell the products for retail value. The goods are often purchased directly from manufacturers or distributors.
Wholesale is another way to describe this form of B2B.
Many industries, including retail, food services, construction, and medical, use wholesale B2B business models. Wholesale B2B transactions are typically conducted over the phone, by email, or using spreadsheet order forms.
Wholesale ecommerce is all digital with a B2B ecommerce platform. Platforms allow wholesalers to showcase product catalogs easily, and create a seamless purchasing experience.
B2C purchases are making the switch to ecommerce, which is one of the reasons the B2B market is growing. It is possible to make the switch, but there is a learning curve.
B2B purchases are typically larger than B2C, and B2B relationships with vendors often depend on long-standing relations.
Manufacturers
The manufacturers produce large quantities of finished goods by using parts, raw materials and manual labor in conjunction with machines.
In a B2B business model, finished products are sold to suppliers, manufacturers or wholesalers.
Auto industry is an excellent example of a B2B environment. The manufacturer produces individual car parts such as fuel pumps and engines.
The manufacturer then sells the car parts to an automobile company, which builds the whole vehicle from the parts.
Manufacturers also do business online in the same way as wholesalers. In the International Ecommerce Associations report, The State of International Ecommerce, more than a third of manufacturers forecast B2B sales growth of at least 25% in 2021 and 2022.
In addition, 54% want to sell to consumers directly. It is clear that B2B buyers expectations are changing, and manufacturers must keep up.
Its not just B2C customers who have high expectations. Wholesalers, channel partners, and distributors are also looking for manufacturers who offer digital purchasing options.
This includes the ability to check order statuses and view pricing online.
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Distributors
There are two possible options after a product leaves the hands of the manufacturer: If the producer prefers to be in control of the sales aspect of their business, they can sell directly to the customer.
This leaves them with responsibilities like managing orders, packaging, and marketing.
A distributor can sell a product on behalf of a manufacturer. The distributor will work closely with the manufacturer to increase sales and move their product through the distribution channels.
In an ecommerce business model, sales are made online and often via an ecommerce site, creating greater growth opportunities.
Distributors are striving to create an experience for customers that exceeds expectations, just like in other B2B models.
Marketplaces such as Amazon, eBay, and Walmart show the enormous potential that distributors have to sell online.
They can achieve unprecedented growth. The adoption rate for ecommerce distribution has risen by 26.3% from 2019 to 2020. Amazon has set the standard for personalized, automated experiences.
Distributors must use more advanced ecommerce technology to maintain their customers interest.
The Stages of Business-to-Business
Its crucial to know the four stages of B2B growth, even if you are just starting out. Knowing what stage your business is at will help you to prepare for obstacles that are sure to arise and deal with them as soon as they occur.
Your B2B company will undergo several stages of B2B ecommerce web development.
Each phase requires different resources, finances, and marketing strategies.
Well go through the four stages to becoming a B2B company, and the challenges that each stage brings.
New/Startup
All it takes is an idea and a dream of turning that product or service into a successful business.
Youve decided that you want to launch your B2B business during the startup phase. You have now finished the development of your product or service, and youve begun marketing it and selling to customers.
In this stage of your business, sales are usually small but growing slowly. Your focus will likely be on researching and identifying your target market.
Youll need to make adjustments to your advertising or product based on the feedback you receive from your customer behavior as you start making sales.
Youll be able, hopefully, to solidify your marketing strategy before moving on to the next stage of B2b portal development.
Common Challenges
- Establishing your market presence.
- Setting up a target market.
- Facing larger competitors.
- Cash reserves management is a good way to manage your cash.
Growth
Youll enter the growth stage, also known as survival, after launching your product.
Your business will now pass the break-even point and start to make increasing profits. However, they wont be as high as sales.
Your business will be able cover its operating costs and explore new opportunities as it grows and acquires new customers.
This stage is often marked by increased competition and will force you to rethink your business model. You should also consider important activities like sales model, marketing, and operations.
Common Challenges
- More customers to serve
- Manage increased revenue.
- Increased competition
Expansion
As you expand into new markets, and develop distribution channels, your cash flow and revenues will likely grow rapidly.
This growth could slow down as the market becomes saturated and more competitors take market share.
Your B2B company will need to increase market share, and find new revenue sources, like new product lines, or new target customers, in order to capitalize on growth.
Common Challenges
- Competition is increasing.
- Create new products and services.
- Expanding into new markets.
- Growing and maintaining your business.
Maturity
Cash flow will likely decrease and margins of profit will shrink once your business reaches maturity. Your business owner may still be growing and dominating, but not as fast as it was during the expansion phase.
Its up to you to decide whether you want to create an exit strategy, or reinvent yourself into a B2B company. Your business can extend its life cycle by investing in new ecommerce technology and exploring new markets.
Common Challenges
- Market saturation.
- Exploring new markets
- Create new products and services.
- Growing and maintaining your business.
- Potential exit strategy.
B2B Ecommerce 101
Whatever your hesitation to launch your B2B online store, you should know that nothing is impossible.
- Do you have customers who require bulk orders? Done.
- Do you have customers that require specific materials or sizes? Check.
- Do you have customers who have ongoing accounts, or rates that are pre-negotiated? You will be taken care of.
Here are some tips on how to reach out to B2B clients to increase your online sales and streamline your business.
You can also focus your efforts on what youre best at: getting your products to your customers.
- Better educate yourself than your competitors.
- Teach your customers to save time, and theirs.
- Reduce manual labor and errors by using technology.
- All your spare time can be used to increase customer loyalty and support.
- Align your team with a single truth source -- and scale more effectively.
- Increase sales while reducing costs (no brainer).
- Integrate e-commerce, but do not make it central.
- Text or Messenger is the same way youve always communicated with customers.
- Segment your customer experience so that everyone feels special. (And you wont feel weighed down).
Inform Customers About Products, Features And Promotional Offers
A concept that combines content with commerce in an online strategy has a practical application.
Users will look elsewhere for information if they are not provided with everything that is needed, from ingredient lists to sizing charts and how-to guides.
This exploration can lead to the consumer using another channel for purchasing outside of your digital commerce channel.
The B2B experience has evolved from a green screen with limited information to a more educational platform that promotes your products and services.
Why?
- You can prove to your customers that you are worth their money by providing them with free educational content.
- Once they have trusted you, you can close the deal.
Businesses using a B2B model have been doing this for years with phone conversations or drinks. You need to do this to increase traffic and close online sales.
Customers Can Migrate From Offline Channels To Online Channels
It is not surprising that fewer B2B clients choose to contact a sales representative in person, by phone, fax, or email as millennial buyers have more purchasing and decision-making power.
Its estimated that 65% of B2B customers prefer to do their research online rather than through a salesperson. A quarter of B2B consumers complete at least half of their purchases for work online.
Communication is key. If you do decide to implement a new communication channel, make sure that your team communicates with your clients early and often so everyone stays on the same page.
Online, you can connect with sales and customer support and request samples and catalogs. Customers can also seek assistance through the chat box that is present throughout the website.
No matter how you introduce your digital channel, be prepared for questions and concerns. And, more importantly, emphasize the benefits of moving to the new platform.
Create:
- FAQs: It is likely that if one client has a query about your website, many others will have the same. A dedicated FAQ page will allow you to address specific questions about your business, and eliminate any confusion or frustration from your customers. This is also a good way to stay in touch with your target audience, as new questions are asked.
- How-to guides: Whether it is about bulk orders, selecting specific materials or sizes, or managing ongoing accounts and pre-negotiated rates, how-to guides can be a helpful tool for B2B clients who need more guidance.
- Interactive Navigations: Even better than a How-to Guide, interactive guides give B2B clients a visual of how to navigate your ecommerce website and make purchases.
Technology Can Be Used To Resolve Customer Issues
B2B fulfillment mistakes can be expensive for an ecommerce solution due to the types and quantities of products ordered.
This could result in the loss of truckloads or trainloads.
Your B2B brand must be able deliver products consistently on time and meet customer expectations. Your team should be able develop new relationships, introduce additional services, and avoid customer service issues, such as refunds or apologies.
Its not surprising that 51% of B2B buyers in the U.S. stated that investing in ecommerce tech in 2021 is their top priority.
Ecommerce technologies such as cloud computing, storage and search engine optimization, predictive analytics and other related technologies are no longer a luxury but a necessity.
Other innovations have led to the creation of personalized products, promotions and checkout experiences. Marketing messaging, price customization and marketing messaging are also now possible. Businesses can base their B2B pricing on individual customers situations and personalize it.
B2B businesses can also benefit from the technological advances in AI and IoT. These technologies help to improve customer insight, segmentation, and targeting, and enable intelligent automation.
B2B companies can use ERPs or OMSs as central sources of truth, using APIs that sync these systems with ecommerce platforms.
Ecommerce platforms, beyond ERPs, can automate various aspects of ecommerce to improve the customer experience.
Here are a few of these B2B ecommerce software automatons:
Automated Inventory Management From A Customers Viewpoint
Transparency in stocking is crucial for B2B transactions, as they often involve large quantities of products. A B2B company can suffer a lot from a shipping mistake, and it could also damage the relationship with their customers.
B2B clients, who depend on you to run their business, should be able to get the product they need at the time they need it.
Automated inventory control not only helps your business to keep track of the amount of product in stock but can also alert customers to current inventory counts, without having to manually input data.
You can integrate an ecommerce platform that is flexible and functional to centralize your data. This will allow you to keep accurate information about products, pricing, and inventory.
Order Dashboard Visibility To Fulfillment Teams
Your fulfillment team can access a clear dashboard of orders. You can use APIs to sync real-time order data with an ERP.
This view allows you to see whats been sent, whats pending, and why.
You can drill down into individual orders to view fulfillment stages, order numbers, PO details and more.
Benefits Of Using A B2b Ecommerce Platform
It may be time for you to change the way your business is conducted if you are a B2B company that relies on outdated processes like faxes and cold calls.
When you are ready to take the plunge into ecommerce the first step is to choose a B2B platform. Businesses can now take advantage of hundreds of platforms to meet the needs of their customers and modernize existing systems.
Here are a few reasons that using an ecommerce B2B platform could be the right move for your company:
Improved Management Of Suppliers And Clients
With an ecommerce system, you can manage all your business operations in one location. From customer data to order fulfillment to inventory management.
Your ecommerce platform offers options for automating sales processes between suppliers, distributors and businesses. This can streamline B2B operations, and improve customer experience.
B2B merchants can integrate mission-critical systems such as POS or ERP through flexible APIs.An innovative technology allows you to work with existing systems and tools, such as POS, without having to start all over again.
Existing Customers Can Be Sold More Products
B2B ecommerce offers a chance to upsell and cross-sell existing customers with a platform they can access and use.
One of the best ways to keep customers interested is by providing a personalized experience.
In fact, in 2020 55% of B2B budgets will be devoted to digital efforts that help create a more personal customer experience.
In B2C, it could be augmented reality fitting rooms or personalized product suggestions on Instagram. In the B2B world, this can be done through personalized quotes, shipping rates and discounts, AR tours and personalized sales portals.
Potential Expansion
B2B ecommerce offers more than just the chance to reach out to current customers. It also gives you a chance to expand your business into new markets and gain new clients.
There are so many digital platforms, ecommerce marketplaces, and ecommerce platforms available that there is no limit to what merchants can do. This makes it easier for B2B marketing agencies to expand globally or enter new markets.
Platforms help both B2C merchants and B2B retailers reach new customers and expand across borders. We support over 140 local currencies and over 150 countries.
It also offers features such as cross-channel sales, international shipping, and tax options. B2B Edition offers advanced payment options, shopping lists shared by multiple users, and the ability to buy again.
This allows you to offer your customers a frictionless shopping experience.
Better Data Analytics
You can track the behavior of your customers as they shop on an ecommerce website. Data analytics, Ecommerce Analytics & Insight Report will allow you to determine which parts of your company are performing well and which ones should be eliminated.
This allows you to optimize user experience and make better business choices.
Cloud computing, storage, and predictive analytics, for example, are no longer a luxury, but rather a necessity.
In the race to adopt new technologies, B2B sellers will need to use data analytics in order to improve their overall customer B2C experience as more B2B companies embark on digital transformation.
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The Final Word
B2B ecommerce has made significant progress. 32% of B2B professionals in the U.S. claim that ecommerce is their most effective sales channel, compared to only 23% who prefer in-person channels.
B2C companies are already moving fast in the digital world, so it is likely that B2B businesses will not be far behind.
Youll find plenty of options for B2B ecommerce platforms, whether you want to start a B2B company or move your existing business online.
While going digital might be outside your comfort zone, there are many benefits to ecommerce that far outweigh any initial costs: increased conversions and customer satisfaction, access to new markets. If your B2B company is still using outdated processes, now might be the time to let go of old-fashioned ideas and embrace B2B ecommerce.
B2B today to prepare for the next wave in B2B ecommerce opportunities. decision-making process, online shopping experience