The pandemic has triggered an accelerated digital transformation worldwide. It is estimated that more than 15 million users have taken up online shopping. This has led to all types of e-commerce and sectors, including B2B, joining the online shopping circuit.
The advantages of e-commerce are no longer only offered to the end consumer, companies of all types can benefit from the advantages of merging their B2B model with the advantages of an online shop.
- What is B2B ecommerce?
- What purpose does B2B ecommerce serve?
- New B2B ecommerce trends
- B2B marketing tips
What is B2B ecommerce?
B2B, or Business to Business, is the buying and selling that takes place between businesses. For example, between manufacturers and distributors or between distributors and retailers. In other words, the entire chain of transactions that take place before the purchase by the end customer.
Online sales have been growing steadily in recent years and this change is affecting, among other sectors, B2B, which is undergoing a profound reshaping. The combination of ecommerce and B2B has become a fusion capable of reaching more customers, generating more orders and doing so in a much more attractive and efficient way.
B2B stands for business-to-business. In contrast, in the B2C model, the potential customer is the end consumer.
Other differences between B2B and B2C e-commerce include:
B2C shops offer a standard retail price for each product.
In contrast, B2B companies usually reach price agreements with their customers through negotiation or by applying volume discounts, for example.
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Individual buyers vs. customer decision-making units (DMU)
Consumers decide alone about their purchases, whereas professional B2B purchases are much more complex and therefore use purchasing platforms composed of several people who, based on different data and information, make decisions about their company’s purchases.
Product search functionality
While consumers search eCommerce by brand name or item description, B2B buyers search using ID numbers to ensure they get the right item, as there may only be one exact piece that fits your needs.
B2C shops offer standard products found in a catalog, while B2B shops, although they may also have a catalog, offer more complex products on demand, which are tailored to the needs of each company.
B2C uses the traditional internet network, where the end-user connects and the seller is behind a firewall, either directly connected or via ISP.
The B2B model uses the traditional internet or private network with trusted business partners. The private network can be a VPN network using the internet infrastructure.
What purpose does B2B eCommerce serve?
It means conducting business transactions more quickly and securely. This helps to increase the number of transactions and therefore contributes to faster growth. B2B helps business activity to lower management costs and thus allows for higher profit margins.
Companies that identify with a B2B service accept that they have a smaller number of potential customers, but in return, they can customise their product more, as well as the marketing strategies used to market it.
It is common, therefore, for companies to maintain loyalty relationships, retaining suppliers over time.
When it comes to attracting new customers, they also use multiple online platforms to establish new business relationships, such as business exchanges by geographic area or industry sector.
Creating an eCommerce
Online sales trendsThe main advantages of B2B e-commerce are:
- It allows you to capture more business opportunities.
- Increases sales for B2B businesses.
- Reduces costs.
- Customer feedback for continuous improvement.
- Easier to reach new markets.
- Allows to centralise data through a B2B e-commerce integrated to the ERP.
New B2B eCommerce trends
EDI, or electronic data interchange, allows companies to exchange information using a standardised language. It facilitates effective coordination between companies to place recurring orders and handles them more efficiently than an online shop could.
EDI is, therefore, best suited for high-volume order processing.
In contrast, an online shop is a much more efficient sales channel for purchases that do not need to be fully automated. Thanks to product catalogs, they are very efficient for promoting new products and opening up new cross-selling and up-selling options. It minimises the costs of the ordering process, through automation.
Then there is integrated e-commerce that uses your company’s logic and data from your ERP (and optional additional systems) to power your online shop, offering advantages such as reduced human error in order processing, automatic product catalogue updates or an integrated online shop software, thanks to linking to your ERP system.
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Allow your B2B customers to manage their business accounts themselves, set up multiple functions and specific permissions, track quotes or view detailed order history. This shopping experience, similar to conventional online shopping, is more satisfying and helps to build loyalty and sustain business growth.
Within the four common B2B models we have:
Buy-side, (e-procurement): are e-commerce transactions between a purchasing organisation and its suppliers. Pre-negotiation agreements are often used.
Sell-side (e-catalog): These are commercial transactions between an organisation acting as a supplier and its customers. The supplier sets out how buyers are to place orders and they are often similar to an online shop where customers can directly view products and place orders.
E-Marketplaces: Besides being an online shop, it enables the establishment of business between the companies involved, due to the fact that it uses a type of B2B and B2C e-commerce, networks of users/buyers using links, reverse links and exchanges.
Trading Partner Agreements: is based on business-to-business automation processes.
Some eCommerce trends in 2021:
- API-Based Digital Commerce and Composable Commerce:
Use interchangeable solutions and applications and merge different elements to produce a service that meets the specific needs of your customers. APIs (application program interface) integrate the various solutions to create an optimised and highly customised trading experience.
- Modelling B2B eCommerce on B2C eCommerce:
B2C e-commerce is so developed that it makes sense to adopt the same channels used in B2C to B2B buyers. After all, a B2B customer is also a customer seeking to buy, so it incorporates typical B2C functionalities such as product recommendations, which on the one hand improves cross-selling and on the other hand provides a much more attractive shopping experience.
- Fintech as a Service:
Enable B2B to offer the payment and payment methods preferred by customers and suppliers worldwide through single API integration.
Best-of-breed solutions include fraud protection or multi-currency support.
- Immersive Commerce:
It uses technologies such as augmented reality (AR), virtual reality (VR), and 360-degree product images to enhance the customer experience and help customers make better purchasing decisions.
- B2B Enterprise Marketplaces:
Approximately 87% of B2B buyers buy from these Marketplaces. These are customers who are really interested in buying, to whom we can easily provide our catalog of services and manage the orders placed in a very efficient and fast way.
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B2B marketing tips
- Constant marketing efforts
It will allow us to stay connected to our audience. Marketing is essential when it comes to launching a brand and generating interest.
- Improving communication between marketing and sales
Fluid communication between them is very important in order to implement sales and marketing strategies that are much more effective. It is not enough to launch generic advertisements to create brand awareness.
- Identifying more profitable customers
We often find that medium-sized companies tend to be the best customers. They are often in the process of growing, which means they are willing to spend more on products and services to enable them to do so.
- Measuring ROI
It allows us to measure the success of our marketing campaigns, review analytics and then optimise and refine your strategy.
In summary, B2B e-commerce is certainly a business sector that should not be neglected. For every B2B company, it is worth considering selling its own products and services via B2B platforms in addition to traditional sales channels.
However, there are some aspects to take into account, which we have summarised in the article. In this way, your company can benefit from all the above-mentioned advantages.
If you do not yet have a suitable e-commerce platform or do not know any external B2B e-commerce for your products or services, do not hesitate to tell us what you need and we will be happy to help you.