Business to business ecommerce is usually shortened as B2B ecommerce which fully stands for business to business electronic commerce. Business to business ecommerce is the sale of goods and services through online transactions between business. B2B ecommerce incorporates digital models to improve sales.
A research by Gartner in 2020 states that the future of business to business sales is ecommerce. According to Gartner’s Future of Sales research by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. The global B2B ecommerce market value was US$17.9 trillion in 2021 which is over 5 times that of the B2C market. These are proven facts that B2B ecommerce is the light for increased sales. No wonder top brands like Amazon, Alibaba, Rakuten, Mercateo, Global Sources, Walmart and IndiaMART use this.
The goal of every business tycoon is to make more sales at a reduced cost. Now the question is how do you start a business in B2B ecommerce? Well you need not to stress out if you aren’t familiar with how to start a Business to business ecommerce, we got you covered. In this blog post we have made a comprehensive guide on how to get you started and we also provided examples of successful business to business ecommerce examples that will inspire your journey.
How Does B2B Work?
First and foremost, let’s understand the essence of B2B. Unlike its counterpart, Business-to-Consumer (B2C), which caters to individual consumers, B2B is a dynamic model where businesses engage in transactions with other businesses. It’s a vibrant arena, fostering collaborations between manufacturers, wholesalers, and retailers, all through online sales portals.
In the past, B2B transactions involved labor-intensive, manual processes. But today, the introduction of digital commerce is a game-changer, empowering businesses to cut costs and enhance efficiency through automation.
Business to business ecommerce has made it easy for wholesalers, large retailers, organizations such as schools or nonprofits, and resellers to all converge in a virtual space. It has presented a stress free method for buyers and sellers to meet seamlessly in what seems like a digital home, placing and managing orders, all from the convenience of their mobile phones.
The products featured in this grand production are diverse – from office furniture to computers and productivity software. What’s particularly fascinating is how some B2B transactions involve the entire company, painting a vivid picture of B2B’s impact on the broader business landscape.
B2B e-commerce has come to stay. It is not merely a transaction; it’s a digital revolution reshaping the way businesses connect, trade, and thrive. As we navigate this digital frontier of business connections, B2B is fostering efficiency, streamlining processes, and opening new avenues for collaboration. Today, we stand at the threshold of a future where the possibilities are as vast as the digital horizon itself.
What are the Benefits of Business to Business?
- Large Average Deal Size: Business to business transactions generally involve higher values compared to B2C. B2B companies focus on a smaller number of high-value deals. This reduces the complexity of managing numerous individual sales.
- Higher Switching Costs: B2B customer loyalty tends to be higher due to the satisfaction with products and services. This loyalty is further reinforced by the higher switching costs, as the B2B relationship is often more integrated and complex than B2C transactions.
- Large Market Potential: B2B companies can either target a broad range of enterprises across various industries and geographies or specialize in a specific industry and become leaders in that niche. This flexibility allows B2B organizations to explore and expand their market presence.
- Efficient Digital Transactions: B2B organizations leverage online platforms for advertising and conducting business. This makes it easy for clients in placing bulk orders through streamlined and efficient digital transaction models, enhancing the overall buying process.
- Faster Delivery: B2B e-commerce tools streamline the sales process, making it efficient for both sellers and buyers. Integration of systems enables a smooth flow of information and these companies can automatically manage orders, and keep track of available products. This coordination results in quicker delivery of products or services.
- Built-in Order Management: the availability of cloud-based e-commerce platforms facilitates B2B sellers in managing orders, inventory, and customer data seamlessly across various channels.
Types of B2B Ecommerce
The types of B2B ecommerce include:
1. B2B2C (Business-to-Business-to-Consumer)
This model involves transactions between a manufacturer and wholesaler, or a wholesaler and a retailer, through an online sales portal, ultimately reaching the end consumer.
Manufacturers can use B2B ecommerce to connect their ERP systems, monitor inventory, and sell directly to consumers, reducing costs and maximizing the value of each transaction.
B2B ecommerce enables distributors to sell to a variety of B2B customers with different requirements, streamlining the sales process and offering customized solutions.
B2B ecommerce allows wholesalers to streamline their sales and marketing processes, find new customers, and increase sales by leveraging online platforms.
5. SaaS (Software as a Service) Businesses
SaaS businesses can utilize B2B ecommerce to market, sell, and distribute their software products to other businesses through digital channels.
These types of B2B ecommerce cater to different business needs, such as streamlining sales processes, connecting with new customers, and maximizing the value of each transaction.
Stages of B2B Ecommerce
During the startup stage, the focus is on establishing the company and building its foundation.
Common challenges include:
- Developing a user-friendly platform
- Ensuring secure payment gateways
- Creating initial traction
As the business grows, it faces new challenges to maintain its momentum. Some common challenges in this stage are:
- Scaling seamlessly and affordably
- Managing increased online traffic and sales
- Ensuring consistent customer satisfaction
In the expansion stage, the business aims to grow rapidly by entering new markets and expanding its product or service range.
Common challenges during this stage include:
- Identifying and entering new markets
- Creating new products and services
- Maintaining and expanding the customer base
At the maturity stage of a B2B ecommerce business, the focus is on maintaining a stable and profitable position in the market while continuing to grow the business in a sustainable way.
- Staying innovative and relevant while avoiding disruption.
- Expanding product offerings and testing new markets.
- Investing in new technology and potentially considering exit strategies.
These challenges highlight the complexities and opportunities that businesses face as they navigate the B2B ecommerce landscape.
By addressing these challenges and leveraging the opportunities presented by growth and expansion, businesses can build a robust and sustainable B2B ecommerce platform.
B2B E-commerce Marketing Strategies
These strategies can help businesses attract and engage potential customers, increase conversions, and build long-term relationships with customers.
Here are some B2B ecommerce marketing strategies:
1. Content Marketing: Creating valuable and informative content, such as blog posts, webinars, and podcasts, to attract and engage potential customers.
2. Search Engine Optimization (SEO): Optimizing your website and content to rank higher in search engine results, making it easier for potential customers to find you.
3. Pay-Per-Click Advertising (PPC): Using targeted ads to reach potential customers and drive traffic to your website.
4. Account-Based Marketing (ABM): Targeting specific accounts or companies with personalized marketing campaigns to increase conversions.
5. Email Marketing: Sending targeted and personalized emails to potential and existing customers to promote products and services.
6. Social Media Marketing: Utilizing social media platforms to engage with potential customers, build brand awareness, and drive traffic to your website.
7. Customer Relationship Management (CRM): Using CRM software to manage customer interactions and data, automate marketing campaigns, and improve customer retention.
By leveraging these strategies, businesses can optimize their B2B ecommerce marketing efforts and drive growth.
Challenges Face by Business to Business Companies
- Long-term Customer Retention: B2B companies often face challenges in convincing buyers to make repeat purchases. Building and maintaining long-term relationships requires ongoing efforts to meet evolving customer needs and expectations.
- Limited Market Size: Despite the ability to target various industries, the overall size of the B2B market is limited. This poses a risk for small and midsize B2B organizations that may find it challenging to sustain growth and profitability.
- Increased Competition: The relatively small size of the B2B market intensifies competition among businesses. B2B companies must invest in strategies to differentiate themselves and stand out in a crowded marketplace.
- Longer Decision-making Process: B2B transactions often involve multiple stakeholders, leading to a longer and more complex decision-making process. This can slow down the sales cycle, requiring patience and strategic relationship-building.
- Price Negotiation: B2B buyers, purchasing in bulk, often engage in price negotiations, seeking better terms, discounts, or additional services. This negotiation process can impact profit margins and requires effective negotiation skills from B2B sellers.
- Complex E-commerce Supply Chain Management: Managing the supply chain in B2B e-commerce can be complicated, especially when multiple partners are involved. Miscommunication at any point in the supply chain may lead to delays, emphasizing the need for effective coordination and information sharing among stakeholders.
What is an Example of E-commerce Business-to-Business B2B?
These two Amazon Business and Alibaba are great examples of business to business ecommerce that could inspire a brand when trying to start one. However they are other examples. We will discuss these brands below starting with the aforementioned.
Example of Business to Business Ecommerce #1-Alibaba
Alibaba is currently the world’s largest global b2b ecommerce platform for small businesses. It has nearly 20 million buyers and sellers. In 2021 it recorded a revenue of 110 billion dollars. Alibaba was launched in 1999 out of China. It offers a platform that connects B2B sellers and buyers from around the world. It showcases a great variety of products in over 30 industry categories ranging from raw materials to finished goods. Joining the platform is free and buyers have access to a mini-website where they can display 50 products or services.
Example of Business to Business Ecommerce #2-Amazon
This is another platform that has made a name for itself in the b2b ecommerce space. Amazon Business was launched in 2017 in the UK. It has a B2B (Business to Business) arm called Amazon Business, and it’s one of the fastest growing platforms within this sector in the world. It also has a seller Program that allows sellers to cater to the specific requirements of business customers by providing exclusive features optimized for Business-to-Business (B2B) transactions. Amazon Business gives you access to a vast platform selling in bulk to other businesses.
Example of Business to Business Ecommerce #3-Rakuten
This is a well-known Japanese e-commerce and online retailing company that operates globally. Rakuten has diversified its services beyond consumer-facing e-commerce and has ventured into the B2B (business-to-business) sector as well. They have an ecommerce platform which includes features for managing bulk orders, integrating with existing systems, and streamlining the procurement process.
Example of Business to Business Ecommerce #4-Walmart
It runs supermarkets, grocery stores, hypermarkets, neighborhood markets, and discount and department stores. The Walmart chain was founded in 1962 with a single store in Rogers and later grew to be one of the most talked about when it comes to b2b ecommerce.
Example of Business to Business Ecommerce #5-IndiaMART
With over a decade of experience in digital branding and web building, eWorldTrade is a full-service B2B marketplace platform. Rapidly expanding its database of manufacturers, suppliers, and businesses worldwide, the platform now boasts more than 500,000 registered members.
In conclusion, B2B e-commerce stands as the cornerstone of modern business growth. The substantial benefits derived from embracing digital channels in B2B transactions far exceed the initial investments, offering businesses a transformative journey towards increased efficiency and profitability. As the world move to a digital horizon, it has become urgent for businesses to adopt e-commerce more than ever. Now is not just an opportune time but a strategic necessity for businesses to harness the power of B2B e-commerce, ensuring they stay at the forefront of industry advancements and secure sustainable success in the dynamic digital era.
How to get started with B2B e-commerce
To get started with B2B ecommerce, consider the following steps:
1. Identify Your Target Audience: Understand the specific businesses or industries you want to target with your products or services.
2. Choose the Right Platform: Select a B2B ecommerce platform that aligns with your business needs and offers essential features such as self-service options, unified B2B and B2C selling, flexible payment options, and compliance with security and data protection regulations.
3. Create a Comprehensive Business Plan: Develop a detailed business plan that outlines your goals, target market, marketing strategy, and financial projections.
4. Build a User-Friendly Website: Design and develop a user-friendly website that offers a seamless online experience for your B2B customers.
5. Implement Effective Marketing Strategies: Utilize content marketing, search engine optimization (SEO), pay-per-click advertising (PPC), and social media marketing to promote your B2B ecommerce business and attract potential customers.
6. Establish Strong Customer Support: Provide excellent customer support to address the unique needs of B2B customers, such as bulk ordering, customizable price tiers, and advanced logistics management
What is the difference between B2B and B2C ecommerce?
Business to Business (B2B) and Business to Consumer (B2C) e-commerce are two distinct models that involve online transactions but cater to different types of customers and business relationships. Here are the key differences between B2B and B2C e-commerce:
B2B (Business-to-Business) targets other businesses as customers. Transactions occur between businesses, such as manufacturers selling to wholesalers or wholesalers selling to retailers while B2C (Business-to-Consumer) targets individual consumers as customers. Transactions occur between businesses and individual end-users.
B2B involves a smaller customer base with larger transaction values. Business customers may make bulk purchases while B2C involves a larger and more diverse customer base, each making smaller individual purchases.
Nature of Transactions:
B2B Involves complex transactions, negotiation, and often requires customized pricing and terms. Long-term relationships are common while B2C transactions are relatively simpler, with standardized pricing.
B2B involves multiple decision-makers and a more extended decision-making process. Purchases may require approval from various stakeholders within the business while for B2C a single consumer makes the purchasing decision. The decision-making process is shorter and less complex.
B2B often involves complex and specialized products or services. Purchases may include raw materials, machinery, or other business-specific needs while B2C Products or services are generally more standardized and aimed at meeting individual consumer needs and preferences.
B2B marketing is relationship-driven, focusing on the value, efficiency, and long-term benefits for businesses. Personalized communication is common while B2C marketing is often emotion-driven, emphasizing brand image, user experience, and individual consumer benefits.
Sales Cycle Duration:
B2B has longer sales cycles due to the complexity of the products/services and the need for negotiations and approvals while B2C has shorter sales cycles as consumers make quick decisions, and purchases are generally less complex.
Volume of Transactions:
B2B Involves fewer transactions but with higher order values. Bulk purchases are common while B2C involves a higher volume of transactions, each with smaller order values.
B2B Often involves negotiated payment terms, such as invoices with extended payment periods while for B2C consumers pay at the time of purchase through various online payment methods.
What are B2B Misconceptions?
B2B marketing should be approached the same way as B2C marketing:
The fact remains that B2B and B2C are different ranging from target customers, products/services down to decision making so they shouldn’t be addressed the same way. While some marketing strategies are universal, B2B has its unique demands, avoid one-size-fits-all programs and choose a team that customizes strategies for B2B objectives.
B2B marketing shouldn’t focus on building email lists:
A good email list is valuable in B2B marketing for sending newsletters, promotions, and updates. It’s not exclusive to B2C; rather, it can enhance communication with business partners.
B2B marketing doesn’t need sensational special offers:
People make emotional decisions while purchasing a product. Quality offers that appeal to the emotional side of B2B clients can be effective in building relationships and securing deals.
B2B marketing doesn’t rely on SEO strategies:
Online visibility is crucial for any business. SEO and keyword research are essential for ensuring that a B2B business ranks high in search engine results, contributing to its overall success.
B2B marketing doesn’t involve emotional decision-making:
In business, decisions are influenced by emotions. Business to business marketing should recognize and cater to the emotional aspects of decision-makers to create meaningful connections.
B2B marketing doesn’t need unique and quality offers:
B2B clients, like any other consumers, appreciate quality offers. Providing valuable and unique propositions can set a business apart.
B2B marketing doesn’t benefit from social media platforms:
The world has become a small village with the presence of social media. Most buyers and sellers meet on social media platforms and exchange values. Establishing a social media presence is vital for legitimacy in any business, including B2B. Regular engagement on platforms like Facebook and Instagram is expected.
B2B marketing can ignore customer relationship-building:
Building strong relationships is crucial in B2B marketing. It goes beyond transactions; nurturing long-term partnerships is essential for sustained success.
B2B marketing doesn’t require customized strategies:
B2B marketing demands a customized approach due to its unique set of requirements. Avoid generic marketing programs and opt for teams that tailor strategies to specific B2B objectives.