Ready to take your business to the next level? Taking your business online offers a world of opportunity to expand your reach and bring new customers into your fold. Learn more about B2B ecommerce and how to transform your business model with an eye on the future.
If you’re a B2B business owner, we probably don’t need to tell you that 87% of shoppers start their search for products and services online. But you might be surprised to learn that they also expect to be able to buy these goods through your company website — and are likely to abandon your business for a competitor if your website can’t fulfill their needs. Today’s B2B customers crave the same ease and convenience of shopping online that they get from B2C websites, such as Amazon. Yet, many B2B companies lag behind their B2C counterparts when it comes to setting up shop in the digital realm.
Still, no business wants to lose clients or risk getting ghosted for failing to meet buyers’ expectations.
Losing competitors to forward-thinking brands is just one of the many reasons businesses are increasingly embracing B2B ecommerce; not only does the model unlock access to a growing market and help businesses woo customers who prefer to do business online, but it also opens up a world of opportunities to accelerate sales growth and scalability.
A “decade in a year:” the rapid acceleration of B2B commerce
Then there’s the size of the pie. Following a whirlwind of growth on the heels of the pandemic, more than 17% of sales are expected to be generated digitally, creating a market expected to top $1.8 trillion in 2023. Yes, that’s trillion with a big capital “T.”
The sky is the limit.
Industry tech analyst, Benedict Evans, mused on the rapid technology adoption that occurred during the pandemic and compared the slaught of advancements to experiencing “a decade in a year.” Yet, this unprecedented growth is expected to be a permanent shift in the way B2B buyers operate in the market. Research from McKinsey found that about 80% of B2B buyers don’t plan on returning to in-person sales, even as life and business return to pre-pandemic normals.
Despite changing consumer expectations, roughly one-third of B2B companies across industry sectors still don’t offer ecommerce capabilities through their website. So, we’re setting out with our scuba gear to help B2B business owners take a deep dive into the B2B commerce business model, and offer a few tips on transforming their business model with an eye on the future.
What is B2B ecommerce?
So, what does B2B ecommerce actually mean? B2B ecommerce is simply defined as the “online sale of goods or services between businesses.”
You’re likely familiar with the popularity of major ecommerce brands such as Amazon and eBay, but B2B ecommerce is enjoying a rapid rise. Three years after the pandemic, B2B ecommerce is actually growing faster than DTC online shops — including for manufacturers who grew sales to more than $543 billion — faster than any other channel, altogether.
Sure, there are some industries where launching an ecommerce website simply doesn’t make sense; a home builder can’t exactly sell abodes through the post, for example, but for many brands, failing to embrace B2B ecommerce and meet consumers’ high expectations — well, it’s a quick way to get left high and dry.
B2B businesses need other businesses to flourish. Unlike B2C online stores, where customers tend to purchase items based on their wants (hello, new shoes!), B2B buyers are more likely to purchase goods in bulk and facilitate larger deals based on their business needs.
B2B ecommerce opens up a world of opportunities to accelerate sales growth and scalability.
Where B2C ecommerce transactions are relatively simple, B2B transactions are much more complex. In B2C, prices are generally fixed, inventory quantities are limited and shipping is largely straightforward. In contrast, B2B transaction prices are highly variable, the volume of inventory is much higher, and products have much more complicated shipping requirements.
In addition, B2B ecommerce markets generally have to deal with ever-changing tax and regulatory requirements. Due to the complexity of the B2B ecommerce market, ecommerce implementation — the process of launching a business online and driving seamless omnichannel customer experiences — becomes that much more demanding.
While any business can essentially move its operations online, the most common types of B2B commerce include:
- Software-as-a-Service (SaaS)
Like other industries, Baby Boomers and Gen Xers who generally preferred to conduct business in person are retiring, and Millennials and Gen Z B2B buyers are quickly taking their place. While sales and building long-term relationships are still essential functions of B2B companies, business transactions are increasingly initiated and facilitated online, with the expectation that buyers will return to ecommerce channels for recurring purchases.
Just consider this: more than 87% of buyers want the ability to self-serve part or all of their buying journey, according to TrustRadius. That also means buyers expect the same content, features, and seamless experience afforded to them in their daily digital lives.
Key benefits of B2B e-commerce
B2B ecommerce technology has come a long way. Today’s B2B commerce brands have the ability to truly get to know their customers and anticipate their needs through sophisticated ecommerce software platforms. A few major benefits of B2B ecommerce include:
- Expand your audience
- Boost B2B ecommerce sales
- Lower your operational costs
- Get instant customer feedback
- Larger sales volume
Expand your audience
Launching an online store effectively moves your business out of the limits of brick-and-mortar and onto the digital landscape. By staking your digital presence, B2B companies will be able to reach new customers and audiences, especially as they improve their position in the search engines online. New customers lead to new business opportunities, which can effectively grow your business and your brand.
Boost company sales
It’s simple math: attracting more clients to your company boosts product sales. However, that’s not the only way a B2B ecommerce platform can help improve your business performance. Choosing the right B2B ecommerce platform can also enable you to offer personalized and relevant product recommendations for your visitors, display product bundles, and other content — such as order history — designed to unlock powerful cross-selling and upselling opportunities.
Lower operational costs
Growing your revenue while minimizing your costs might sound impossible, but it’s a very real benefit of B2B ecommerce. Today’s advanced technology lets you take nearly every aspect of your business online, including order entry, customer relationship management — even customer service. By automating and streamlining these various processes, your company can cut down on costs, including the number of employees, while you make your business processes run more efficiently. This is especially true with ERP-integrated B2B ecommerce options. In fact, some B2B brands have even ditched or downsized their physical locations to accompany their growing online brands, saving significant cash previously funneled into building leasing or owning costs.
Get instant customer feedback
Building a winning ecommerce experience for customers will go a long way toward growing company sales and expanding reach into new markets. On the flip side, a poor or outdated shopping experience can effectively end the business relationship. With the availability of community forums, social media, and online reviews, customers can go public with their grievances and potentially harm the reputation of your brand. Fortunately, B2B ecommerce platforms come packed with features to enable instant customer feedback so your customer service team can handle any concerns right off the bat before they wind up in a 1-star review.
3 categories of B2B ecommerce products
As we mentioned before, B2B ecommerce isn’t for everybody. Besides ensuring that selling your products and services online makes good business sense, B2B brands need to consider if they have the time, capital, and expertise to successfully launch a business online. Let’s take a look at what types of B2B products perform well in the online marketplace: volume products, subscription services, and configuration items.
Ecommerce solutions around volume products focus on making the ordering process as seamless as possible. 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 ecommerce, the value is in enabling customers to place orders with the fewest amount of clicks.
With the growth of the digital age and SaaS, more and more products are offered as a service and are therefore purchased on a recurring basis. Purchasing plans can vary, but it is most common to see the plans set up on a monthly or yearly reoccurring basis — for the tenure of the contract. Instead of purchasing and checking out their products, in this model customers sign up and pay for a service (for example on a monthly or annual plan). As a result, ecommerce solutions must support a unique purchase flow and process. These products can include CRM software, inventory management tools, accounting platforms, and the like.
Think of these like the IKEA of business products. Examples can include items such as manufacturing equipment, networking products, medical devices, or telecommunications solutions — anything that comes in parts to create a larger product or system. These solutions may be dependent on other offerings, and as a result, can be bundled together with other products to upsell. Therefore, customers usually want to get a quote before purchasing.
Let Clouda tackle B2B ecommerce complexity
Companies that choose not to invest in B2B ecommerce are rapidly falling behind the competition. Without moving into digital commerce, they’ll risk losing customers, struggle to compete, and see their profit margins shrink over time. Even worse, they could be missing out on millions of dollars in revenue in the process.
Because of the size of transactions, and the complexity of SKUs and services, many B2B companies turn to ecommerce implementation partners to help launch their online businesses. Clouda has assisted countless B2B companies with everything from pre-implementation planning all the way through a successful post-launch. Contact our ecommerce experts to get started on your ecommerce roadmap.