The Business-to-business (B2B) subgroup remains one of the less talked about sub-group in eCommerce. While many are familiar with its business-to-customer (B2C) and direct-to-customer (D2C) counterparts, B2B remains elusive. Yet, according to Statista, the B2B eCommerce in North America is predicted to reach $1.3 trillion by the end of 2023.
So, what exactly is B2B eCommerce? Let’s find out everything about this business model with your exclusive B2B eCommerce guide.
B2B eCommerce: Meaning and Characteristics
Traditionally, the B2B commerce model referred to exchanging goods and transactions between two businesses. It is starkly different from a business form where businesses conduct transactions with an end customer. The most common example of B2B is the trade-off between a manufacturer and a wholesaler or retailer.
The B2B model has been slow in the adoption of eCommerce. Many manufacturers and suppliers used to shy away from doing business over the internet or an eCommerce website. However, the B2B model has undergone a paradigm shift since the pandemic.
The Present Form of B2B eCommerce
Today, businesses are increasingly adopting eCommerce as their primary sales channel. A far greater number of B2B entrepreneurs are creating their websites and onboarding B2B marketplaces to serve digital-first customers. The days of cold-calling clients, doing manual transactions over meetings, and offline marketing are quickly fading.
The entry of millennials in the B2B market has shifted the focus toward digital transformation and tech-savvy customers. A study by McKinsey suggests that three-fourths of buyers and sellers prefer digital self-service engagement over face-to-face business deals.
87% of B2B clients implicitly demand seamless interactions over eCommerce platforms. 7 out of ten customers accept to pay $50,000 if businesses are conducted through online sales channels. This implies the growing popularity of B2B eCommerce. According to Gartner research, 80% of B2B transactions will take place over digital channels by 2025.
Leading Types of B2B eCommerce Persisting Globally
There are usually five categories of B2B eCommerce that are either already established or quickly gaining traction around the world:
Manufacturers focus on producing goods in bulk volume or product parts by utilizing raw materials, labor, and machinery. The finished products or parts are sold to other businesses, such as wholesalers, suppliers, or retailers.
With the advent of eCommerce, manufacturers now have a wider reach with clients. They choose to sell their products from their websites to businesses worldwide. In some cases, manufacturers like Nyke are transforming into D2C sellers, selling their products directly to customers.
They can now expand into new territories, transcending language barriers and currencies with eCommerce. With a digital channel, a manufacturer can offer increased visibility to their business clients and build a brand reputation.
Wholesale denotes the business practice of purchasing products from manufacturers in large volumes and selling them to other businesses. Since wholesalers buy products in bulk and sell them in bulk, they can offer a relatively low price to their clients.
Wholesalers plan an active role in product distribution in the retail sector and in the supply chain of B2C eCommerce businesses. This is why it has become pertinent for wholesalers to establish their digital presence and reach out to a wider audience.
With the advent of B2B eCommerce, wholesalers can not conduct business not over the phone or email, or paper orders but on B2B eCommerce marketplaces.
Having their website also helps in displaying their product catalog to clients and creating a branded customer experience. With an eCommerce sales channel, wholesalers can better streamline inventory, sales, and advertising efforts.
Distributors are usually considered intermediaries who work closely with manufacturers to promote their sales. Distributors pick up the mantle from manufacturers in packaging, shipping, promoting, and selling the products. Like wholesalers, the presence of distributors is indispensable for B2C eCommerce companies.
With an online channel, distributors can give their clients much-needed visibility into their order processing and handling workflows. Their clients can track lead times, delays, and shipment locations when all information is available on the Internet. This creates a customer experience that surpasses traditional customer expectations.
Moreover, eCommerce marketplaces like Walmart, Amazon, and Home Depot have proven to be hugely beneficial for distributors to unlock growth. It allows them to interact directly with customers and provide personalized experiences.
The B2B2C (business to business to consumer) model relates to an eCommerce model whereby B2B businesses interact directly with B2C companies and the end consumer. In other words, both the B2B and B2C businesses provide complementary services and goods to a single customer.
An example of this model is a dropshipper marketing and selling a manufacturer’s product to customers. The order fulfillment is done by the manufacturer.
The B2B2C model results from eCommerce expansion, especially the expansion of virtual storefronts. An eCommerce storefront allows manufacturers, wholesalers, or vendors to partner with other businesses and reach the final consumer together. Online applications, social commerce, and marketplaces are other examples of B2B2C sales channels.
SaaS refers to Software-as-a-Service. In an era when online businesses abound globally, SaaS has become the most popular B2B business type. A SaaS business sells its software products to other businesses on a subscription basis. The client company can use its technology and platform to improve its own business operations and scale.
SaaS companies are native to digital transformation and mostly offer their services to other eCommerce businesses, including B2B e-retail companies. SaaS companies are the best examples of providing an excellent customer experience to online consumers.
8 Proven Ways to Upgrade B2B eCommerce
Now that we understand the types of B2B eCommerce let's understand how a B2B company can upgrade its services. Here are ten tips that have proved to be effective for many B2B companies:
1) Emulate B2C Customer Experience
B2B eCommerce has a lot to learn from B2C businesses and how they offer outstanding customer experience. Take, for example, faster website loading times. This simple factor has the potential to decide conversion rates for potentially all customers visiting your website. The ideal eCommerce conversion happens with pages that load within 2 seconds.
Similarly, it is well known that B2C companies offer multiple payment methods. Since most digital buyers are familiar with digital payment methods, it only serves to promote their favorability with multiple payment options. This also influences keeping cart abandonment rates low.
Other examples of optimal customer experience include providing estimated delivery dates for products, expedited delivery times, and low delivery charges. It also helps to show the availability of stock and excellent product description pages.
2) Optimize B2B Order Fulfillment
An optimized B2B order fulfillment begins by finding the right logistics partners like fulfillment companies, freight forwarders, and carriers. Usually, B2B fulfillment centers around larger quantities of products than B2C businesses; it is costly and time-consuming. There are lots of regulations involved as well.
B2B businesses can look at proper shipping methods for bulkier, large cargoes. Therefore, selecting the right freight method can help reduce costs. For example, less-than-truckload and less-than-container loads are less expensive than their counterparts.
It is always better to optimize fulfillment speed, especially for time-sensitive goods. Guaranteeing deliveries within a stipulated EDD time can be a good way to establish trust with business partners. Here, 3PL fulfillment providers come in handy with their expertise in picking, packing, and shipping large volumes of goods.
3) Invest in EDI and ERP Technology and Automation
It is needless to say that B2B eCommerce companies must focus on technology upgradation and automation. Gone are the days when paper-based transactions and phone call-based purchasing orders were the norms.
Today, technologies like EDI makes it possible to communicate with businesses within seconds, sharing invoices and purchase orders electronically. Another important technology is ERP (enterprise resource planning) which helps automate day-to-day business processes.
Along these lines, B2B companies can leverage self-service technology like chatbots, online scheduling, and real-time integrated tracking to empower clients. Businesses get extra brownie points if they optimize their websites for mobile phone users. In fact, it has been found that mobile-first websites can escalate sales for B2b eCommerce companies.
4) Create a Tailored Customer Experience
Personalization is the permanent buzzword in the eCommerce industry. It is our instinctual drive to establish our unique presence amongst others. Online clients are no different. Therefore, in creating a personalized customer experience for business partners, B2B can successfully cement its brand presence.
The starting point can be personalized product recommendations, flexibility in pricing tiers, and assigning a single point of contact for that business. Including multiple languages also adds to a tailored and inclusive customer experience.
Another great avenue for personalization is post-purchase communication. Start with interactive emails and order notifications. You can also offer branded tracking experience and post-purchase customer surveys.
Apart from these, you can choose to develop custom features to complement your client’s business needs. Many businesses prefer to have custom features added so that it becomes easier for them to sell the products to their niche customers. Adhering to their expectations can help grow their business as well as yours.
5) Go Omnichannel
The prevalence of omnichannel modes in eCommerce is a testimony to customers’ preference for multiple sales channels. McKinsey found in a survey that B2B clients prefer to interact with more than 10 channels with suppliers before sealing a deal. An omnichannel approach thus becomes imperative to thrive in the fiercely competitive environment.
Businesses can operate on virtual storefronts while running their business from the comfort of their own website. They can also partner with marketplaces like Amazon, Shopify Plus, and BigCommerce to garner more attention from potential customers.
6) Devise a Proper Marketing Strategy
As B2B companies are rather new to the eCommerce industry, devising a proper marketing strategy can be tough. The first thing a B2B entrepreneur can consider is to educate their potential customers on their products and services. This is because without presenting all the information, it is possible for clients to quickly swap them for their competitors.
Businesses can start with a blog including articles about their products, incorporating how-to guides, usage, and benefits. For example, shoe manufacturers can showcase sizing charts with each product, ingredients used in the making, and how to use or clean the products.
8) Get a Business Boost with Referrals
The referral economy is a legitimate system now. It is operated by massive customer bases that interact with each other and rope in other people to share positive brand experiences.
It is an excellent source of validating customer experiences, feedback, and loyalty if businesses engage in a referral system. Roping in loyalty programs and other incentives helps to bring more customers via existing customers.
The Future of B2B eCommerce
B2B eCommerce is one of the fastest growing verticals in eCommerce, irrespective of a slump in the global economy since 2022. B2B eCommerce is projected to grow by an additional 20% by 2030.
A lot of the growth is attributed to the increasing adoption of eCommerce sales channels and technology. In fact, there is a growing market for B2B products on social commerce sites. At the moment, an estimated 46% of B2B consumers are social media users who actively look for suppliers on their preferred social media sites.
In the near horizon, B2B companies are expected to lean more towards sustainability as consumers all over the globe are becoming climate conscious. This is especially true for Millennials and GenZ entrepreneurs and start-ups. One of the best and fast ways to include sustainability is through eco-friendly packaging and participating in carbon offsetting.
B2B commerce has always been prevalent in the retail industry for centuries now. But, with the dawn of eCommerce, B2B companies are set to embrace new changes. With an online sales channel, they get the opportunity to expand and meet customers who are increasingly tech-savvy.
1) What is the difference between B2B and B2C eCommerce?
In a B2B model, the business transaction occurs between a company (manufacturer, supplier, wholesaler) to a retailer. In a B2C model, the business transaction happens between a retailer or a manufacturer with the end consumer.
2) What are some debunked misconceptions about B2B eCommerce?
Some common misconceptions about B2B commerce have been debunked, including they prefer don’t ecommerce, they can’t conduct online chat and virtual meet to close sales, and they choose digital marketplaces as side ventures.