Around the world, B2B eCommerce is predicted to reach $1.8 trillion. With new businesses germinating in the market, the industry is already twice as big as B2C while more sales are increasingly shifting to online channels.
Is this an opportunity you can afford to pass on?
A report by Forrester indicates that that manufacturers and wholesalers are the primary players generating this massive market expansion. As of right now, too many B2B eCommerce platforms rely on legacy or homegrown systems that are slowing their business down.
The B2B e-commerce space is evolving fast and consumers have great expectations. The expectations of digital experiences are at an all-time high and an effective B2B eCommerce platform will empower your business to expand and scale easily to match market demand and consumer requirements. Consumers want better purchasing experiences while merchants are struggling to keep up with new technology and all intricate processes involved.
The nature of B2B is evolving too. Earlier, B2B eCommerce platforms were just “portals” used to replace client assistance representatives and let existing customers place re-orders. Most of the B2B websites were nothing but just online catalogs, good for browsing only.
Today, B2B shopping experiences are pretty close to what consumers would come to expect. B2C shopping companies like Amazon have elevated the shopping experiences that have now become industry standard. Consumers expect easy site navigation, high-quality product pictures, uncomplicated checkouts, and versatile payment options.
In a nutshell, these platforms are visually modern, easy to manage, and have straightforward processes to improve conversions.
This understanding has led many successful platforms like BigCommerce, Shopify Plus, and Magento to combine more B2B functionality and B2C experience into their platforms. Helping match upgrades with a great buying experience.
Rising eCommerce technologies reduce the barrier to entry for conventionally B2C enterprises to add a B2B component (B2C2B) and, vice versa, for traditionally B2B businesses to direct-to-consumer (B2B2C).
In fact, we have a podcast that explores the subject of high-tech (functionality) and high touch (experience) of a perfect B2B eCommerce platform. You can listen to the episode here.
Furthermore, we’ll explore 7 easy steps on how you can run a profitable eCommerce business but before that let’s understand what kind of B2B eCommerce businesses exist.
Models In B2B eCommerce Space
A B2B2C Model
In a structure like this, the manufacturer sends goods to B2B, and those goods are then subsequently sold to the final customer.
With the B2B2C eCommerce platform, these processes occur online or have virtual stores, platforms, or an eCommerce website. There are several models where the consumers are aware that they are purchasing from a business that’s different from where the business itself purchased it. For instance, the customer may purchase merchandise from an affiliate blogger but the merchandise is branded and sent by the manufacturer.
A Wholesale Model
Businesses usually buy goods in bulk for a more economical price and turnaround to trade them at retail value. The goods are acquired directly from the manufacturers or distributors. This process is wholesale, and it is quite a common form of B2B. Wholesale could also mean the selling of goods to different businesses. The presence of such a wholesale model is present in several industries and this includes retail, food service, construction, hospitality and so much more. This model also leverages a completely new digital infrastructure, making wholesalers display products easily and facilitate an overall seamless buying experience.
The Manufacturing Model
Manufacturers produce finished merchandise at scale by utilizing parts and raw materials combined with machinery and labor. In a B2B model, the finished goods are usually sold to other manufacturers and/or wholesalers. We see this practice occur commonly in the automobile industry where the manufacturer creates individual car parts and then sells it forward to the car brand (company) which further assembles these individual parts and sells them to the customer.
Much like this, the wholesalers are taking the business online, manufacturers are doing that too. B2B buyers are also searching for a buying experience similar to B2C and we are seeing that trend follow.
The Distributor Model
A distributor operates closely with manufacturers in an attempt to produce a market for the goods they are producing, to enhance overall sales. In an eCommerce design, the logistics of the transaction occur online, often within a B2B eCommerce business. You can learn about B2B distributor channels here in great detail.
Most manufacturers operate with wholesalers and distributors and getting everything digital produces a better opportunity for growth. Akin to other B2B models, distributors are striving to reduce the lead time from sale to delivery and build a consumer experience that beats consumer expectations.
So now I hope you can identify which model resembles your business and we can go further exploring the 7 ways you can run a profitable B2B eCommerce business.
5 Tips For A Profitable eCommerce Platform
#1 Educate Your Customers
Educating your customers about your business, products, features promotions is a great strategy that pays in the long term. This kind of interweaving content strategy amplifies brand visibility and trust. If you think about it, the customers always need the information to make better purchasing decisions and it’s better they get it from you rather than somewhere else.
Ideally, you don’t want a prospective customer subscribing to another purchasing funnel outside your organization’s digital business channel. You should ensure that you are providing your customers value before and after the purchase they’ve made.
Companies using a B2B business design have long done this with communications over the phone or drinks. Now, you must drive traffic and close sales online. This brings us to the next important step.
#2 Mind Your Customer Channels
Over the last decade, the total number of B2B consumers preferring to speak to a sales rep in person or by phone or fact mail has drastically gone down and will continue to do so. The reason for this transition is that as more and more millennials and subsequent generations get comfortable shopping online the need for manual sales interactions will significantly decrease.
Your goal is to bring more and more prospective buyers onto the online channels. There are plenty of ways to go about it such as web forms that allow for samples and catalogs online, chatbots on homepages, a dedicated landing page, etc, what’s essential is that you ensure a successful migration of customers to your digital platform. Introduce, FAQs, guides, navigations, e-book, masterclasses, podcasts, etc.
If they are on your channels, they will eventually end up buying from you too.
#3 Keep ’em Coming!
Retaining your customers will be one of the most important tasks to ensure that your platform stays a success. This is where inducing strategies that result in brand loyalty, increased-order value, and increased purchasing frequency will have a positive impact.
These initiatives will have a great ROI and make your B2B eCommerce business sustainable. As a B2B eCommerce platform, your inventory is perishable or will need to be continually maintained and replaced. Providing for both subscription-based plus traditional one-off transactions can secure in customers, yield greater client lifetime profits, and bring more customers on board. Moreover, the data can enable your marketing & sales team to exhibit and offer complementary products, and successfully anticipate when and what a customer is ready to buy next. Allowing for a strategic brand and product positioning.
Industry giants like Amazon have already begun to implement these programs. For instance, certain products, such as this exhaust fan, can be purchased in monthly increments. On your B2B eCommerce store, you can use integrations with partners that save credit information and can use it for concurrent billing. This introduces flexibility and more customer retention.
#4 Invest In Systems That Scale
Having a legacy on-premise software that doesn’t integrate with other applications and lacks cloud functionality is detrimental to your business growth. This needs to be cut down and replaced. Your B2B eCommerce platform is not simply just a “shopping cart” it’s much more. As your business will grow so will your technological requirements and you need systems that scale with you not obstruct that growth.
Large software companies are acquiring, integrating, and upgrading specialized software at scale. We are in the midst of a digital commerce revolution where it’s crucial to understand the potential strength of your eCommerce businesses’ tech stack. Ensure that your B2B eCommerce platform has a robust tech stack such as a solid ERP, CRM, and SCM cloud software that lets you manage your business from anywhere and scales as you want it.
This digital architecture could enable you to clip license and maintenance expenses on overlapping technology and decrease technical bloat.
#5 Humanise Your eCommerce Platform
A high-touch experience or usability is the most essential component in creating a valuable experience for your customers. What people usually get wrong is that they think they have to create a specific theme or customer-centered experience to indulge their customers, however, that’s not the case.
To thrive as a B2B eCommerce business, you need to focus on factors such as:
- Site performance and experience.
- Detailed product information for better decision-making.
- An effective purchasing or sales funnel.
- A highly simplified and quick checkout to build a “business-like” commerce experience.
- A versatile payment option process.
High-touch experience also involves enabling consumers to take charge and complete goals on their terms. Let your customers rummage around on your platform and give them enough information to make informed decisions and flexibility of design, research, and purchase regardless of the device they operate on. This cross-device enablement would make sales agents in the field far more productive and efficient as they can deliver to client doubts on the go instilling security.
Most B2B business owners believe that the eCommerce industry cannot cater to the “offline-like” sales experience for their businesses. You have to ready your brand and allocate the right resources to the right avenues which allow you to reap long-term benefits. This would include strategic partnerships, a good website, thoughtful marketing, a dedicated marketing team and sales channels, and a holistic growth approach.
While you may have to make an expenditure, the increase in returns you can expect vastly exceeds this original expenditure.
For more insights about B2B eCommerce head over to Cloras.
Thanks for reading!