The Ultimate Guide to B2B Ecommerce: Platforms, Examples, Trends & Features
In the past decade, B2B ecommerce has made a big wave in the way that businesses buy bulk inventory and materials.
In the olden days, there wasn’t much of an option to buy online. Any business that wanted to sell consumer products in bulk usually had to go to trade shows, where the manufacturers of these products would flaunt their offerings for all the show’s attendees to check out.
But today, as everything shifts onto the glorious internet, you no longer need to set foot in a packed trade show and fist fight other business owners to snag the best products to sell in your store.
Clothing, home goods, furniture, electronics, textiles – you can source pretty much anything online with the help of a solid B2B ecommerce platform.
In this article, we’re going to look at the definition of B2B ecommerce, how it works, some of the most common categories, and some of the biggest B2B ecommerce trends to look out for in 2020 and beyond. We’ll also talk about features to look for when you’re choosing a B2B ecommerce platform for your own retail business.
- What Is B2B ecommerce?
- How B2B ecommerce Works
- 3 B2B ecommerce Trends to Watch
- How to Choose the Right B2B ecommerce Platform
What Is B2B ecommerce?
B2B ecommerce is short for business-to-business electronic commerce. It’s a broad term that describes when businesses buy and sell their products to each other online. Keep in mind that it’s different from when you buy from your favorite online retailer, because you’re a consumer, not a business (that’s B2C, which we’ll cover in a bit).
But if your favorite online retailer buys its inventory online from another company, that’s B2B ecommerce.
And it doesn’t stop at buying finished products, like a T-shirt or a washing machine. B2B ecommerce also covers raw materials like fabrics, auto parts, and building materials.
However, most B2B ecommerce falls under the umbrella of retail, where store owners buy discounted items in bulk, then sell them to individual customers at a markup to score some profits.
You’d be surprised by how many items you’ve bought that weren’t actually manufactured by the store you bought them from!
B2B vs. B2C ecommerce
In many ways, B2B ecommerce is similar to its B2C counterpart. But there are some key differences that are important to note.
One of the biggest to note is the sheer size of the market: According to Shopify Enterprise, the B2B market was worth $7.6 trillion in 2017, while the B2C market was dwarfed at $2.14 trillion. That’s a 257 percent difference.
Let’s look at a handy chart that covers how these two forms of ecommerce differ.
|B2B ecommerce||B2C ecommerce|
|Complex buying process with multiple steps and a longer sales process||Simple buying process with few steps and a shorter sales process|
|Customer is a group of people, sometimes whole departments, sales reps, dealers, and brokers||Customer is an individual consumer (and occasionally others are involved)|
|Usually repeat purchases and an ongoing relationship between buyers and sellers||Often one-time purchases without ongoing relationships|
|Driven by relationships between buyers and sellers||Driven by the product being purchased|
|Buyers typically speak with a single point of contact for all communications||Buyers interact with salespeople or websites to make purchases, but don’t usually have ongoing relationships with a point of contact|
|Target markets are smaller and more focused||Target markets are larger and more broad|
|Purchases are more rational, with a focus on business value||Purchases are more emotional, with a focus on desire, status, price, and branding|
So how does it all work? Glad you asked.
How B2B ecommerce Works
There are four main players in the B2B ecommerce model: manufacturers, wholesalers, distributors, and retailers. Here’s a quick breakdown of each player’s role:
- Manufacturers physically make the items in their production factories.
- Wholesalers purchase products in bulk from manufacturers and sell them to either distributors or retailers.
- Distributors aren’t always involved in the process, but when they are, they’re something of a “middleman.” They’re similar to sales reps or brokers, managing the sale of products from wholesalers to retailers.
- Retailers buy these products from distributors, wholesalers, or even sometimes directly from manufacturers to sell to consumers via their online and/or brick-and-mortar stores.
Whether all four players are involved or a retailer cuts out the intermediaries and buys directly from a manufacturer, the end customer is always the same: individual consumers who buy small quantities of those products from retail stores.
As we mentioned earlier: In the past, these transactions all needed to take place in person, typically at trade shows.
Even when manufacturers, wholesalers, and distributors had websites to show their inventory, these were used more like shiny, untouchable showrooms – the website owners still took orders manually over the phone or in-person. (And a lot of them used manual Excel spreadsheets to track and manage everything… the horror!)
But today, retailers can use a B2B ecommerce platform to secure their store’s inventory without ever leaving the comfort of their couch.
Now that you get the gist of what B2B ecommerce is and how it works, let’s look at some key trends in the industry.
3 B2B ecommerce Trends to Watch
When it comes to the future of B2B ecommerce, there’s a lot more to say.
How will it change in the next five years? Will it get revolutionized with breakthrough technologies like artificial intelligence (AI)? What should future retailers expect from a B2B wholesale platform?
To answer these questions and ensure your business keeps up with changing practices, it’s crucial to stay on top of B2B ecommerce trends.
Here’s a look at what we believe will be three of the most impactful changes in the next few years.
1. Artificial Intelligence Will Reduce Inventory Carrying Costs
For retailers concerned with inventory carrying costs, a lot of effort is put into optimizing inventory management techniques.
Fortunately, one of the fastest-growing B2B ecommerce trends is using AI along with machine learning to minimize the factors affecting inventory management.
With the aid of these intelligence processes, the algorithms used in B2B ecommerce platforms can be modified to fit your unique business needs and challenges.For example, machine learning can be used to optimize inventory space, and AI can be used to plan across many key areas, including optimizing the throughput of suppliers, streamlining 3PL and dropshipping strategies, and offering transparent shipping-related communications.
2. Cognitive Commerce Will Influence Purchase Decisions
Cognitive commerce, when a computer gathers data about your interests and then recommends you products that are tailored to your preferences, is set to personalize the B2B purchase experience.
It will provide recommendations for complements, help with cost optimization by adjusting prices to product recommendations, and leverage spending trends to offer discounts.
Imagine every time when you log in to a B2B ecommerce portal, you see only products that would look good on your store. You’d not only save time, but also have the opportunity to upsell and cross-sell to your customers.
A few B2B ecommerce websites are already using cognitive commerce to enhance the buying experience. Office Depot, for example, offers a list of suggested items on its shopping cart page under a category called, “Customers who purchased this item also purchased,” besides offering one-click access to the checkout page.
3. Blockchain Technology Will Transform B2B Payments
Blockchain is increasingly gaining traction among wholesalers, buyers, and customers.
According to a survey by Bottomline Technologies, 35 percent of B2B suppliers and purchasers are interested in blockchain-based payment platforms.
Why wouldn’t they be?
After all, blockchain has wide-ranging benefits for both parties. You can, for example, use it to dramatically speed up the purchase process. Blockchain transactions are simple to process, have no transaction fees, and are much more secure than traditional transaction processors.
The technology is slowly finding its way into the B2B purchase process. For example, B2B ecommerce platform Inxeption introduced tokens that its customers can use to pay for purchases. The company revealed that the tokens will be used on its own blockchain platform, giving its customers a flexible, secure, and self-directed way to conduct business.
Looking to start your own retail store? Let’s look at some tips to help.
How to Choose the Right B2B ecommerce Platform
Even though every retailer has different needs, you should look for the following basic functionalities and features in your B2B ecommerce platform.
One of the first things to consider when deciding which B2B Commerce platform to go with is ease-of-use.
Ideally, the navigation options of the site should eliminate as many steps as possible between your quest (say to view a product’s weight) and the page with further information on the product – including how to order it.
Other B2B ecommerce features that scream, “THIS PLATFORM IS EASY TO USE!” include visual cues, links to customer service, and tools to find the desired information.
If you’ve recently made an online purchase on mobile, chances are you’ll use the same device for many of your B2B transactions. This makes it important to choose a B2B ecommerce platform that has a responsive design.
Responsive design is a way to adjust the display of a site to the screen size of the device being used, like a desktop, tablet, or smartphone.
In most cases, this means an appropriate scaling of the images, fonts, menus, calls-to-action, and other site elements to look good on each device.
Simply put, responsive design gives you the ability to not only source B2B products from your PC, but also use your smartphone or tablet to buy wholesale on the go – or even while cruising through the aisles of your store.
Dynamic Pricing & Discounts
Pricing in B2B ecommerce often differs based on many factors like the order volume and frequency of purchasing.
Additionally, there may be different bundles of goods and subscription-based items that will be priced differently.
To avoid being overwhelmed by these configurations, look for a platform that has the technology to deliver personalized, real-time pricing based on your needs.
For example, it should display different prices for 1,000 and 100 units of the same product.
A good B2B ecommerce portal will also reflect applicable discounts based on grouped items, bulk purchases, or customer loyalty rules.
Since most B2B product catalogs are vast and data-rich, you need a way to access precise and relevant details.
If you don’t have the option of advanced search, things can get really frustrating, really fast.
All of this makes advanced search crucial for B2B ecommerce solutions.
Your B2B ecommerce platform’s search function should allow you to do things like:
- Search by UPC, SKU, product name, and more
- Get desired search results even when you misspell a word
- Filter results by top-selling items, recent order history, or products on promotion
- Save time by auto-populating the search field
Just to name a few.
Advanced search is gaining importance in B2B, because of consumerization of B2B purchasing – B2B experiences transitioning into B2B expectations. As research tells us, 62 percent of B2B customers consider enhanced search to be increasingly important for completing their purchase.
Flexible Payment Methods
Unlike B2C transactions, where you can swipe your credit card and call it a day, B2B purchasing undergoes a longer process for every transaction.
That’s because there are multiple people involved in the buying process (accounts payable, procurement department, and others). And invoices, of course, have to pass through various stages of approval.
As a B2B customer, you should expect the platform you’re considering investing in to account for these business needs.
While exploring its payment options, make sure the platform offers ways to make an offline payment in addition to online methods like PayPal, credit card, Apple Pay, Stripe, NEFT, ACH, and the like.
According to a survey cited by the B2B division of Digital Commerce 360, 50 percent of B2B buyers want payment options beyond credit cards, and 82 percent want invoicing with long payment terms. Naturally, the B2B ecommerce platform that accommodates these preferences should be your platform of choice.
This is a must-have feature for all retailers. Only with access to accurate stock levels and restock information can you make smart buying decisions and sell your stock down to zero.
Accessing inventory data in real-time ensures that you always have the most up-to-date data to work with. You can use the insights to keep selling popular items that’ll shortly be in stock or seamlessly shift to products with more availability.
You can also use them to deliver positive customer experiences. For example, you can show pop-up notifications to inform customers about products that won’t be available for a while, which ones will be available in a week, etc.
Customers are likely to appreciate the transparency and make purchase decisions based on when to expect the stock of the products they need.
B2B ecommerce Is Here to Stay
As you can see from the research, B2B ecommerce is a booming industry that’s not showing any signs of slowing down.
And we can thank technology for helping with that. With each passing day, new developments like B2B ecommerce platforms are helping to connect more aspiring business owners with simple, quick, and reliable ways to find the perfect products to sell in their stores.
If you’ve been thinking about starting your own retail store, but are unsure where you’d source your products and how you can be sure you’re making the right choices, a B2B ecommerce platform might be the perfect solution.