This section will investigate the strategies of the Business to Customer (B2C), Business to Business (B2B) and Marketplace E-commerce. Furthermore, this part contains three main articles and this article will discuss Business to Business (B2B) E-commerce.
- Business to Business (B2B) E-commerce (This article)
- Business to Customer (B2C) E-commerce
- Marketplace E-commerce
B2B E-Commerce, or Business to Business Electronic Commerce, encompasses the online – through an online sales portal – sale of products and services between companies. This is as opposed to B2C (Business to Consumer), which describes the online business transacted between a business and individual customers (not a business entity).
Where B2C ECommerce transactions are relatively simple, B2B transactions are much more complex. In B2C, prices are generally fixed, shipping is straightforward, and quantities are low. In contrast, B2B transaction prices are highly variable, relying on a number of pricing variables throughout. Because business is much larger entities (than individual consumers), the volume of products and services are much higher – and have much more complicated shipping requirements. In addition, B2B E-Commerce markets generally have to deal with much more complex tax and regulatory impediments. The complexity of the B2B E-Commerce market makes the solution requirements. Furthermore, the implementation processes very demanding.
Why is B2B E-Commerce Software Important?
Companies not investing in digital channels today are rapidly falling behind their competition. Without a move into digital commerce, companies will lose customers, struggle to compete, and see their margins shrink. Failing to invest in a B2B E-Commerce platform can end up being a costly mistake. Furthermore, potentially have your business losing out on millions of dollars in revenue.
Moreover, today, businesses are seeing their customers purchase more online than any other channel. Based on Forrester Research’s iconic paper The Death of a B2B Salesman, 74% of B2B buyers indicate that buying from a website is more convenient than buying from a sales representative, and 93% prefer to buy online when they have already decided what to buy. This is only set to increase as the millennial generation, one that has wholeheartedly embraced the E-Commerce business model takes over the workforce. Again according to Forrester, B2B E-Commerce is expected to become a $1.1 Trillion industry by 2020. If you don’t think this will affect your business, you are wrong.
3 Categories of B2B ECommerce
1. Volume Products
E-Commerce solutions around volume products focus on making the ordering process easier. The products represented here are simpler, lower-priced items that are often ordered in large quantities. These products are common in CPG, apparel, hardware, and automotive supply businesses. For this model of E-Commerce, the value is in enabling customers to place orders in the fewest amount of clicks.
2. Subscription Products
With the growth of the digital age and SaaS, more and more products are offered as a service and are therefore purchased on a reoccurring basis. Purchasing plans can vary, but it is most common to see the plans set up on a monthly or yearly reoccurring bases – for the tenure of the contract. Instead of purchasing and checking out their products, in this model customers sign up for a service. As a result, E-Commerce solutions must support a unique purchase flow and process.
3. Configuration Products
Examples of these are numerous but can include networking products, manufacturing equipment, medical devices, or telecommunications solutions. These solutions may be dependent on other offerings, and as a result, need to be bundled together with other products. In this instance, because the offerings are generally of such a high price. Therefore, customers usually want to get a quote before purchasing.
Benefits of B2B E-Commerce
Tap More Business Opportunities
A web store can help strengthen your online presence, letting potential clients and resellers find you through search engines. This is especially effective if you choose to make your catalog pages public. However, even if you decide to keep your catalog private, you can use targeted marketing content in your web store to grab the attention of new clients.
Improve B2B E-Commerce Sales
Attracting more clients can help boost your sales. However, that’s not the only way a B2B e-commerce platform can help improve your business performance. Choosing the right B2B e-commerce solution lets you display relevant and specific product recommendations for your visitors. You can make sure your clients see related products. Although, items with more features, unlocking powerful cross-selling and up-selling opportunities.
Lower Your Costs
Growing your revenue while minimizing your costs might sound impossible, but it’s a very real benefit of B2B e-commerce. Moreover, Modern technology lets you take almost every aspect of your business online, including order entry, client information provision, and customer service. By automating and streamlining these various processes, your company can cut down on unnecessary costs – even while you make your business processes more efficient. This especially true with ERP-integrated B2B e-commerce. See below for a visualization of our customers’ cost-savings today:
Get Customer Feedback
A great online buying experience keeps your clients coming back for more, and it might even help drive sales. After all, what would you trust more: promotional text from a manufacturer or wholesaler or a positive review from another buyer?
By offering an exceptional B2B web store, you can turn your clients into evangelists. By simply leaving a review, clients sharing their enthusiasm can have an incredible effect on your business, with reviews typically producing a notable uplift in sales.
Reach New Markets
We already mentioned that a B2B web store can help you reach more clients. And those clients don’t necessarily have to be in your existing markets.
Because your online sales portal won’t rely on the availability of your sales team, your digital sales channel can be available 24/7, 365 days a year. By eliminating the challenge that time differences often pose in the order process, B2B e-commerce makes it easier than ever to serve a wider international market.