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The aftermath of a widespread pandemic has completely transformed the way we look at eCommerce. The popular commerce domain is not just about anything that can be sold online but for those who will do anything to meet their customers where they are. The definition of what can be sold online has changed, and that’s why we are discussing what we call B2B eCommerce.
Like any other business transaction, B2B is simply trade between businesses and when it happens on an internet-based sales portal, it’s called B2B eCommerce. However, there are different kinds of B2B eCommerce and we will discuss them one by one in this article. Let’s get started, shall we?
Types of B2B eCommerce
B2B eCommerce can take many forms based on the type of transaction, parties involved, item procurement, manufacturing, and distribution.
B2B2C
In this type of eCommerce, there is no middleman between the B2B organization and the B2C organization, putting both businesses directly in touch with the end consumer. This type of model allows you to extend market share directly with the end consumers.
How it works: To understand this model better, look at how a wholesaler and manufacturer do business with a B2B or a B2C. Going by the same concept, a wholesaler or a manufacturer sends goods to a business by either partnering or directly selling to them, and the business further sells them to the end consumers, making it B2B2C. And, when all the transactions between the wholesaler, business, and the consumer take place on an eCommerce platform, it qualifies as a B2B2B eCommerce model.
UPLIFT Desk is a great example of a B2B2C eCommerce business model. The company is a manufacturer and retailer of standing desks and other office accessories that are available online for end consumers while the company is also maintaining its relationship with larger B2B customers like M.I.T, Google, etc via the same eCommerce website.
Supplier oriented
In this model, a bunch of suppliers come together to run a marketplace that acts as an intermediary sales channel to connect with different buyers.
Here’s how it works: The buyers can search for products and services offered by different suppliers on that marketplace and pick the one that suits their needs. For instance, if you want to buy a set of office furniture, you can head over to the website and search for exactly what you need- type of material (wood/plastic/fibre), neck support option, price range, color, etc. On the website, you will find several options from different suppliers that might fit your requirements and you can pick from whatever comes close.
The best example of this type of eCommerce model is Cisco’s online marketplace called Cisco connection Online. This model came into being 3 years after Cisco started selling online. The customer started using Cisco’s online marketplace to download applications, check orders, and even look for technical support.
In a basic wholesale model, businesses purchase goods in bulk for a relatively lower price and then sell them to the consumers at retail value. These goods are purchased directly from the manufacturers or distributors usually. Simply put, it is the sale of goods in bulk to other businesses. And, when these transactions take place via a digital platform, you get what we call a wholesale B2B eCommerce business model.
Here’s how it works: In this model, the B2B eCommerce platform is used for end-to-end transactions. Additionally, the wholesalers can also choose to display their products on various eCommerce platforms and make it easier for businesses to take a quick and selective purchase decision.
Wholesale B2B eCommerce models are very prevalent, and you can find them in several industries including construction, food business, medicines, etc. The eCommerce model for wholesale B2B has come a long way from conventional commerce when order transactions occurred over phone calls or emails.
Buyer oriented
In this model, the buyer usually owns the marketplace and invites suppliers and manufacturers to list their products for display. Think of this model as the supplier-oriented one, but with role-reversal.
Here’s how it works: The buyers could already do their research on similar products and services and compare their prices. The buyer then opens a bidding site where the particular product is available from a variety of sellers and the best one in terms of quality and cost gets picked up.
GE’s electronic is one of the few companies that has successfully implemented a buyer-oriented marketplace called GE TPN Post. Buyers pay a standard fee for using the company’s bidding site and then post their project information/requirements on the site. The potential suppliers download this information and submit their bids to complete the project. The buyers can compare all the bids that they receive and pick the one that they like.
For sellers, this serves as a communication platform with a plethora of buyers and also helps them expand their market reach with lower operating costs.
These could be two separate models where manufacturers and distributors work independently or they could come together and make the most out of it for greater growth opportunity. Let’s understand them separately.
Here’s how it works: In the manufacturer-based B2B model, manufacturers make products using raw materials and independent parts on a big scale, and they sell these finished goods to other manufacturers who might use them as a part of a larger project.
One of the most prominent examples is the manufacturers in the automobile industry. The manufacturer makes individual parts like a fuel pump, tire, seats, or engine and sells them to an automotive company that builds the entire car from the required parts and sells it to the end consumer.
Knauf Industries Automotive is an auto parts manufacturing company that operates on this B2B eCommerce model.
The distributors, on the other hand, work in proximity with manufacturers to bring visibility to the goods they are producing. These distributors sell the products to other manufacturers on eCommerce platforms.
Mister Auto is the best example of this type of model. The online retailer has partnered with several parts manufacturers to sell products across categories including tires, batteries, oils, suspension systems, exhaust, and more.
Intermediary-oriented marketplace
This concept is similar to intermediary-based digital storefronts developed for B2C eCommerce.
Here’s how it works: In this model, an intermediary company or a third business establishes and runs an online platform or website where other businesses, buyers, and sellers come together to conduct business with each other. These websites are called intermediary-oriented marketplaces.
The best example of an intermediary-oriented marketplace is Alibaba. The platform was created to provide a B2B portal to connect native manufacturers with overseas buyers on an online platform.
All the B2B business models have their own set of advantages and loopholes, however, taking them onto a digital media platform weeds out the major pain points and provides massive growth opportunities. Let’s look at some of those benefits here:
Benefits of B2B eCommerce
Be where your customers are and meet new ones
“Be where your customers are”, cannot be stressed enough. The number of online transactions has increased manifolds ever since the Covid-19 pandemic hit the world. One of the major misconceptions about the B2B businesses is that they primarily operate it offline. The notions have changed since the pandemic, and now more and more businesses are going online, irrespective of their operating models. This is where the consumer is, and a brand ought to be if they want to cater to their audiences.
By extending your business on online platforms, you can make use of a number of digital marketing tactics to increase your reach. The modern buyer prefers to buy products online, irrespective of the model of the business selling them. The buyer in the future will insist on shopping online, as they are already getting used to it. It’s important that you already jump on the bandwagon and make it easier for your customers to make repeat purchases.
Better supplier and customer management
B2B eCommerce solution, with its concept, offers better management opportunities for both the suppliers and customers. The digital part of it allows room for automation, easy tracking, real-time updates, etc... all managed using a software. Furthermore, the order details help provide better customer service and also follow becomes easy.
You can use the customer information to offer a more personalized shopping experience. Managing your suppliers ensures smooth sailing for your business and that essentially ensures that your customers are happy. Going digital makes it a win-win situation for all parties involved.
Cross-selling and upselling for current customers
One of the major disadvantages of selling offline is that the option to cross-sell and upsell is quite limited. When you take your business online, you’ll not only reach new customers but also be able to set up an automated cross-sell and up-sell recommendation system. Again, this approach goes hand-in-hand with providing an excellent and highly personalized customer experience.
Get actionable insights using data analytics
The digital platform comes with the added advantage of data analytics or insights that can be worked upon to make better business decisions. Depending upon the software you are using, the analytics feature provides an in-depth analysis of sales effectiveness and other business insights. Additionally, you can generate different business reports to understand your progress and strategize accordingly.
Data analytics will help you figure out what's working and what's not for your business. You can also zoom in on what the customer is looking for on your website and based on that information, take measures to increase engagement.
Brand awareness
The quickest and easiest way to spread the word about your brand is through digital media. Your online presence dictates how people know you as a brand. eCommerce for B2B can help improve brand awareness in the marketplace.
When you create an eCommerce website for your business, make sure your product pages are SEO-optimized and well-indexed so that search engines can crawl them. This will ensure that your target audience finds you. This also gives you an edge over the competition, and you can stay ahead in the game with your marketing strategies.
While the advantages of B2B going digital outweigh the hardships, they exist, nonetheless. However, with the resources and tech available at hand today, these roadblocks can be tackled effectively. In the following section, we will discuss the major B2B challenges and their solutions in detail.
Major B2B Challenges and their Solutions
Let’s take a look at some of the major challenges that businesses have to face while in the eCommerce market.
Customer-specific and Bulk deal pricing
Client and channel partner relationships are crucial aspects for any B2B, and these relationships take time and energy to materialize. You can’t afford to treat every client the same. There must be a balance between the trusted long-time partners and those coming to your website for the first time. When it comes to customer-specific pricing, you will need to have a different pricing strategy for different customers based on the business they bring, the time they have spent with your company, and the quantity of product they buy from you over a period of time.
Let’s understand with an example, there are three clients- A, B, and C.
Client A- This is a loyal customer who has been doing business with you since the very beginning.
Client B- This is a relatively new customer but buys frequently and in bulk.
Client C- This is a prospect who has come to your website for the first time and has no history of any prior interactions with your business.
Would you keep the pricing strategy the same for all three? Not likely!
One scenario is- “A” might be paying less than “C”, and B might be paying the same as A for the same product because they are buying in bulk. And, there could be a lot of different permutations to it.
So, how do you deal with customer-specific pricing? Well, you can start by introducing contract and pricing logic to all your customer relationships based on contract terms with different customers.
The pricing structure largely depends on volume for most B2B companies, which can be a roadblock for processing systems. To manage the bulk pricing issues, you can use a quote management software to set up certain rules or come up with a system that automatically permits volume discounts when someone orders a particular quantity of a product. You can set more rules or triggers which allow you to offer multi-tiered pricing for the clients that order in large quantities.
Product Display
Buying online always comes with a dilemma of whether or not the product will look like its pictures in the real-life. The customers are always apprehensive of the look and feel of the product when bought online. But then, this issue holds true for your competitors as well. So, you certainly have to be better at product demonstrations than they are. In other words, your product display should be so on point that it leaves no apprehensions for the customer’s imagination. It should be clear, well-elaborated, and displayed from all angles for a more closer to reality customer experience.
Here is a checklist for a standard and effective product display practice:
- Upload high-quality product images- Try using the natural light with a light background to give the most authentic version possible. If possible, provide a 360-degree view of the product to display the product from all angles.
- Product description: Make sure that the product description is accurate and complete. The buyers should not be looking for assistance regarding the features. This only increases the purchase time and might exhaust them into not deciding.
- Easy Return Policy: Make sure that your return and refund policy is clearly visible and the entire process is seamless and quick. This strengthens the buyer’s confidence in your brand.
- Customer Reviews: Always keep a section for product reviews. This will help you get insights about whether or not a product is working out for your customers.
Maintaining Client relationships
Earlier in the article, we discussed handling customer-specific pricing as a part of managing client relationships. There is that and so much more when it comes to managing multitudes of customers and keeping them all satisfied. Managing client relationships comes exclusively with B2B companies. Every client has their own set of requirements, and their expectations from your company vary too. If they are not taken care of, the client might take their business to someone else. In a way, client relationships can make or break a B2B business.
Before the situation gets out of hand, work on your client relationship management strategy and delegate the tasks to your team. For the accounts that are inactive, your team must have a follow-up strategy in place and conduct regular checks as to what’s working for your clients. This can be managed efficiently by integrating a CRM. It essentially streamlines client interactions and everything is recorded so you can always go back and check who needs your attention and when. You can delegate different accounts to different team members and check on the status easily.
Shipping
Whether it is a B2B, B2C, or any other kind of eCommerce business, timely delivery is a ubiquitous expectation. While it’s comparatively easier to handle shipping for B2C products, the very nature of B2B products makes it slightly difficult to tackle shipping-related issues. Nonetheless, a delayed delivery always creates a bad impression, not to mention that order cancellation is always a possibility.
To handle the shipment issues, you can always integrate shipment software into the company’s current platform. This streamlines order processing and also ensures that buyers are receiving the right product in the right quantity and that the delivery information is accurate. You can track your previous orders, upcoming ones, and the ones that are in transit to stay well-informed while answering client queries. A shipping software also helps in offering customized buying experiences based on the shopping locales of the buyers.
Fulfillment
If someone can remotely access a look at your products through an eCommerce website, it becomes imperative that you deliver to their location. Covering all the locations is next to impossible but a lot of B2B companies are doing it and reaching the very niche of locales. For the B2B companies previously operating offline, fulfillment can be a major pain point and without proper knowledge of what can be done about it, they are bound to be doomed.
Here’s what you do about it? You can either own multiple warehouses and make sure that the maximum area is covered and all your current and potential customers are within reach. If you are a small company or just someone who doesn’t want to waste many resources on warehouse management, you can always engage 3PLs and 4PLs. These companies manage the entire distribution, storage, transport, and fulfillment process for several businesses and are well-aware of the regulations and guidelines that come along with the entire fulfillment process.
Product Diversity
One of the greatest challenges faced by B2B companies is to manage different kinds and categories of products under one roof. Selling mixed products under one parent company often leads to a mixup. If your categories come with manageable product diversification, you don’t have to worry so much. In any other case, you should come up with microsites within the main website for different departments. Having said that, you should always make an informed and well-researched decision as to how much diversification your business needs as it may vary from company to company.
With microsites for different product categories, you can effectively control different sections of your product catalog and separately resolve the issues and client queries that come with it.
Additionally, order management, transactions, and shipments can be handled more conveniently. Running multiple subsites enables you to quickly identify any errors and rectify them immediately. You can also have dedicated support teams for different sites and manage all your products smoothly. It’s basically a “divide and conquer” the B2B eCommerce strategy.
Custom configuration of products
Unlike most B2C companies, the client base of a B2B company seeks customization to a certain level. While this seems like a far-fetched possibility for B2B companies operating digitally, a lot of companies are already offering clients to configure, customize as well as view their custom products in real-time. However, a customized view, let alone a customized product is limited to a certain category or parts of the product. So, you need to check what level of customization you can offer and then accordingly find a tool to assist you with just that.
Here’s an example- Automobile giant Dodge allows its shoppers to design and customize their own Ram trucks, one of the most popular vehicles from the company. You can pick the year, model, select the bed length, interior, and exterior features, choose your configuration, and even pick the colors.
With the tech at hand today, you can look out for options that allow digital customization for your products and offer an immersive experience to your customers. Using visual product customization software is a good way to start.
All of the challenges that we have discussed here can be managed effectively one way or another. For a big B2B company, overcoming these hurdles can be relatively more feasible than that for a small B2B business that has just started out digitally. Rest assured, we will discuss how to over any B2B eCommerce-related challenge for all kinds of businesses at length in our next article.
At EasyEcom, we have integrated B2B order management and a complete B2B eCommerce solution for your business. We provide a fully encrypted brand store portal for your wholesale customers to place orders, check the catalog, compare pricing and place their requirements.
As for the inventory management for B2B brands, our platform offers a state-of-the-art warehouse management system to track the inbound and outbound shipments and scale your warehouse operations efficiency.
All in all, your entire B2B eCommerce operations are managed from a single dashboard with integrations at the click of a button. Drop us a line at care@easyecom.io if you are looking for something like this and we will get in touch.
