Over five times larger than the B2C industry, the worldwide Bizpedia ecommerce business was estimated to be worth $14.9 trillion in 2020. Additionally, Forrester projects that by 2023, B2B ecommerce will represent 17% of all B2B sales in the United States and will total $1.8 trillion.
It goes without saying that B2B ecommerce has reached new heights recently.
B2B ecommerce, commonly referred to as business-to-business online transactions, is the sale of goods or services between businesses. Since orders are processed digitally, buying efficiency and effectiveness are improved for wholesalers, producers, distributors, and other sorts of B2B sellers.
B2B companies have traditionally been late adopters of ecommerce. In the months prior to the pandemic, a study by eMarker discovered that only 9% of all B2B goods sales in the US were made online.
Buyer expectations are rising more quickly than ever, and B2B organizations must keep up with them as a result of the pandemic’s role as a change-catalyst and the influx of millennials into the B2B market.
The era of cold calling, offline marketing campaigns, and manual, paper-based transactions is passing. Customers want these same experiences from B2B merchants and grow impatient with those who don’t deliver them, just as the B2C market is continually inventing and digitizing.
In actuality, 80% of B2B purchasing choices are influenced by the direct or indirect customer experiences of the buyer, and 87% of B2B buyers would pay more for a supplier with a superior ecommerce portal and experience, up from 81% in 2020 and 74% in 2019.
B2B merchants are left to interpret the requirements of the contemporary B2B buyer in the middle of a changing environment. However, if your B2B company is still using outdated technology, going through a digital transition could seem like a hard task. This tutorial will lead you through the fundamentals of B2B ecommerce, including marketing suggestions, common misconceptions, benefits of having a B2B platform, and some useful examples from our own BigCommerce B2B merchants, to help you start modernizing your B2B business.
B2B e-commerce types
Digital channels will account for 80% of B2B sales transactions between buyers and suppliers by 2025, according to Gartner.
The entrance barrier for previously B2C firms to add a B2B component (B2C2B), and vice versa, for traditionally B2B enterprises to sell direct to consumers, is also being lowered by evolving ecommerce technology (B2B2C).
You’ll most likely fit into one of the following categories as a B2B company. Each entity has its own benefits and drawbacks, and some companies may even fit into more than one category at once.
A business-to-business relationship.
Business-to-business-to-consumer (B2B2C) (B2B2C) E-commerce eliminates the typical intermediary between the B2B company and the B2C, bringing the firms in direct touch with the customer. The interaction between a manufacturer or wholesaler and conventional B2B and B2C models serves as the finest analogy for the B2B2C model.
Business-to-business-to-consumer (B2B2C) (B2B2C) E-commerce eliminates the typical intermediary between the B2B company and the B2C, bringing the firms in direct touch with the customer. The interaction between a manufacturer or wholesaler and conventional B2B and B2C models serves as the finest analogy for the B2B2C model.
The consumer is aware that they are receiving products from a company different from the one where they originally acquired them in many B2B2C ecommerce models.
As an illustration, a customer might buy a product through an affiliate blogger, but the manufacturer will brand and send the item.
The wholesale market.
Businesses frequently buy items in bulk from producers or wholesalers at a discounted price with the purpose of reselling them at retail pricing. Another way to describe this kind of B2B, also referred to as wholesale, is the sale of products to other companies.
Retail, food service, construction, and the medical fields are just a few of the numerous businesses that use wholesale B2B models. In the past, wholesale B2B transactions have been conducted over the phone, by email, or through spreadsheet order forms.
A B2B ecommerce platform is used for wholesale ecommerce, where everything is digital. The platform streamlines the purchasing process while facilitating the wholesaler’s easier product display.
The conversion of B2Cs is one factor contributing to the growth of the B2B e-commerce market. It is possible to transfer, although there is a little learning curve. B2B sales frequently depend on established relationships with vendors, and B2B transactions typically have higher average values than B2C purchases.
A manufacturer.
The use of parts and raw materials, along with manual labor and equipment, allows manufacturers to make finished things on a huge scale. In a business-to-business approach, the finished goods are offered for sale to other suppliers, manufacturers, or distributors.
Manufacturers in a B2B environment are well represented by the auto sector. Individual auto components, such the fuel pump and the engine, are made by the manufacturer. The automaker then sells these components to a company that assembles the car from the component parts and sells it to the consumer.
Manufacturers are conducting business online in a similar manner to distributors. In 2021 and 2022, more than one-third of manufacturers expected B2B ecommerce sales to expand by at least 25%, according to The State of International Ecommerce Report.
Additionally, 54% of producers wish to sell directly to customers. There is little doubt that B2B buyer expectations are changing, and manufacturers must keep up.
Higher expectations aren’t limited to B2C customers, either. Wholesalers, distributors, and channel partners are also looking for producers who offer digital purchasing choices, such as the capability to monitor pricing and check order statuses online.
A distributor.
Two possibilities are available following a product’s passage through a manufacturer: The manufacturer has the option of selling directly to the final consumer if they would rather have more control over that part of their business. However, they are still in charge of tasks like order management, packing, and marketing.
To sell their products on their behalf, a producer can work with a distributor. In this instance, the distributor works closely with the producer in an effort to boost sales and transfer the product farther down the supply chain by increasing consumer knowledge of the goods they are producing.
An ecommerce model involves doing the logistics of the sale online, frequently using an ecommerce platform, which offers more room for expansion. Distributors are making an effort to reduce the time between a sale and delivery, just as other B2B models, and to exceed customers’ expectations in terms of both.
Online marketplaces like Amazon, eBay, and Walmart serve as examples of the tremendous opportunity that exists for distributors to sell online and develop dramatically. In actuality, a weighted 26.3% rise in ecommerce distribution adoption occurred between 2019 and 2020. To keep clients interested, wholesalers must employ more advanced ecommerce technologies now that Amazon has established a standard for automated, customized experiences.
The stages of business-to-business
It’s crucial to comprehend the four stages of B2B business growth, regardless of how established your company is or even if it doesn’t yet exist. Knowing what stage your company is currently in will help you get ready for upcoming challenges and find rapid solutions when they appear.
Your B2B firm will go through various stages of business development, each requiring various finances, marketing techniques, and resources, just like a tree starts as a seedling and needs a varying amount of resources to sprout and mature.
This article will give you an overview of each stage of becoming a B2B company, as well as its challenges.
Founders/Startups.
Entrepreneurs begin with an idea and a dream to turn their ideas into a business.
You’ve made the decision to move on with your company venture and start your B2B brand at the startup phase. Your product or service has now reached the end of the development process, and you are starting to promote and sell it to clients.
In this stage, sales are often modest but slowly increasing, and your company’s primary focus is probably on studying your target market and identifying consumer segments. Based on early customer feedback and demand, you’ll probably need to modify your product or advertising when you start to make your first sales.
Increasing growth.
Getting your bearings and launching your product are the first steps towards growth, or survival.
Your company will have passed the breakeven point at this time and will start to make increasing profits, albeit ones that are lower than the level of your sales. You will be able to pay operating expenditures and investigate new business options as your company grows in revenue and attracts more clients.
However, this stage frequently comes increasing rivalry, so you’ll need to review your business model and take important factors into account including your sales model, marketing strategy, and operations.
An expansion.
As you expand into new markets and distribution channels after making a name for yourself in the B2B sector, you’ll probably see a quick increase in your cash flow and income. However, if the market becomes more saturated and new rivals begin to eat into market share, this growth may start to halt.
Your B2B company must increase its market share and find fresh revenue streams, like new product lines or target markets, in order to benefit from expansion.
A mature approach.
Once your business has matured and risen to the top of the market, cash flows are likely to decline and profit margins to tighten. Your business might be thriving and still expanding, but not quite as swiftly as it did when it was in the expansion stage.
You must now choose whether to develop an exit strategy or reinvent yourself as a B2B business. By investing in new ecommerce technologies and expanding into undiscovered markets, your company may be able to prolong its life cycle and go back to the expansion stage.
The basics of B2B ecommerce marketing
No matter how hesitant you are to launch your B2B ecommerce store, know this: You can do anything you need to prosper online.
- Would you like to order in bulk for your customers? I’m done.
- Is there a customer who needs specific sizes or materials? Make sure.
- Does your business have ongoing customers or pre negotiated rates? Everything is taken care of.
Promote products and educate customers about their features.
Content and commerce can be woven together in a very practical online strategy.
If a user is not given access to all the necessary information, such as size charts, ingredient lists, and how-to manuals, they will look for it elsewhere. This research frequently leads to the consumer entering a different sales channel that is not part of your company’s digital commerce channel.
B2B user experiences have changed from information-limited, green-screen-style portals to educational channels that push product and promotions to your customers.
Online channels can be used to migrate offline customers.
It shouldn’t come as a surprise if fewer and fewer B2B clients opt to speak with a sales representative in person, over the phone, fax, or even email as millennial buyers gain greater purchasing and decision-making authority within their organizations.
In fact, a quarter of today’s B2B buyers do at least 50% of their job purchases online. If your B2B hasn’t already started implementing ecommerce channels, it’s certainly time. 65% of B2B buyers prefer conducting their purchase research online rather than via a salesperson.
Naturally, if your team does introduce a new channel, make sure to consult with your clients frequently and early to ensure that everyone is on the same page.
You can obtain samples and catalogs online, contact sales and support, and more using simple web forms. As an additional means of customer service, the chat box is present across the website.
Whatever method you use to introduce the digital channel, be prepared for questions and concerns, and—most importantly—emphasize the advantages of switching to the new system.
Provide ongoing customer support using technology.
B2B fulfilment failures can be expensive for an ecommerce business due to the nature of the type and quantity of the purchased products, potentially affecting truck- or trainloads of product.
In order to continuously satisfy consumer expectations and provide the proper items on time, your B2B business must be able to do so. Your team needs to be able to build new connections and introduce supplementary services rather than dealing with customer service issues, refunds, and apologizes.
Therefore, it’s not surprising that 51% of American companies invest in ecommerce technology as their top priority.
For instance, ecommerce technology related to cloud computing and storage, SEO, and predictive analytics are moving from being a luxury to being a requirement. Other advancements have paved the way for personalised goods, promotions, checkout procedures, marketing messaging, and price adjustments, which enable companies to base B2B pricing on specific clients and circumstances while streamlining the sales process.
Some B2B organizations may even gain from technological advancements in AI and IoT, which can improve targeting and segmentation, provide businesses with more actionable customer insights, and foster intelligent automation.
B2B brands can also employ an ERP or OMS as a central source of truth by syncing such systems with an e-commerce platform through the use of potent APIs. Ecommerce solutions, however, can also automate many ecommerce functions outside of an ERP to enhance the client experience.
