Should you be doing B2B E-commerce?
When you think of e-commerce, most people would be forgiven for immediately jumping to the conclusion that it is all about selling products directly to the end user. With the high-profile nature of websites such as Amazon on eBay, it is an easy conclusion to jump to. However, you may be surprised to discover, that B2B commerce can be even more beneficial to your company.
E-commerce companies such as Alibaba (the world’s largest e-commerce company) have shown that there are enormous benefits to be had from engaging in selling direct to business customers through e-commerce. Many of the same efficiencies, in terms of time-saving, reducing supply chains, automation and many others are just as true for B2B as they are for B2C. However, there are some differences.
What exactly is B2B e-commerce?
B2B e-commerce is the sale or purchase of goods or services, from one business to another, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. (Adapted from the OECD definition of e-commerce).
If your office manager ordered the last lot of printer paper for the office on Amazon, they were engaging in B2B e-commerce. Typically, however, when we say B2B e-commerce we mean items purchased in bulk through an online platform.
What are some of the things to consider when setting up B2B e-commerce?
When setting up B2B e-commerce for your company, there are a number of areas that should be considered, these include payments, pricing, business structure, bulk orders to name a few.
Companies pay differently to consumers. It is unlikely that large B2B transactions are going to talk place using B2C payment gateways such as PayPal. So B2B e-commerce sites need to be aware of these differences.
Make sure that your site is able to handle contract specific areas such as credit levels, credit periods, purchase orders, invoicing etc. In B2B e-commerce it is important that you are making it easier, and more appealing, for your customer to purchase online. If pushing them online means that they lose their credit terms, they are unlikely to adopt it.
You don’t want the whole world (or even all your customers) seeing all your wholesale pricing. It is important that any new system for B2B e-commerce has unique pricing on login. This means that customers have to log in to their own accounts to see pricing, and it also gives you the option to offer different sets of pricing to different client groups.
Client business structures
A key area of B2B e-commerce is the ability to understand, and work within, your customers business structures. It is often a different people (or departments) that make the order, approves the order, and pays for the order. Having the ability to tackle this within the system makes the process simpler and more manageable for all involved.
The need to purchase products in bulk is one of the key differentiating requirements between B2B and B2C e-commerce. When a consumer buys goods or services online it tends to be low order quantities, both in terms of the number of each item and the number of total items.
When a company makes a purchase, it can often include thousands of units, of thousands of SKUs. It is also often (to some degree) a repeat purchase. If every time a business wanted to order (for example) 10,000pcs, it would not be efficient to add them one by one.
It is important to provide B2B e-commerce customers with the ability to upload bulk orders, or to repeat orders. Or even better, ensure that their system links with your e-commerce platform so an order is automatically triggered when stock falls below a pre-set point.
What benefits does B2B e-commerce have for international trade?
Just as B2C e-commerce opens companies up to new markets by reducing barriers to trade, so does B2B. The ability to meet demand without the need for local sales teams means that selling globally becomes a real possibility for companies that could have never considered it previously.
To find out more about how B2B e-commerce can help your business visit Thrive Digital (Stand 2472) at Going Global Live.