The digital commerce business model is witnessing high adoption rates since COVID led to lockdowns and a temporary shutdown of brick and mortar stores. According to eMarketer, worldwide eCommerce sales is expected to cross $1 trillion in 2022.
The rise in B2C (Business to Consumer) eCommerce businesses is evident, but how quickly B2B (Business to Business) eCommerce is empowering the digital landscape is fascinating. The B2B buyers and sellers are gradually leaning towards digital platforms to self-evaluate products/services in a remote setup.
According to Amazon’s B2B eCommerce Evolution report, 96% of buyers who shifted more procurement online during the pandemic, expect to continue e-procurement, even after normal operations resume.
Here is a comprehensive guide to help start a B2B eCommerce business:
What is B2B eCommerce?
B2B stands for business-to-business eCommerce, and it implies the buying and selling process between two businesses. An example of B2B eCommerce is a wholesale website such as Alibaba that facilitates business-to-business commerce sales through its platform.
Earlier, businesses avoided buying online as B2B involved heavy transactions. However, according to McKinsey, 70% of B2B decision-makers say they are now open to making new, fully self-serve, or remote purchases in excess of $50,000, and 27% would spend more than $500,000.
What is the Difference Between B2B and B2C eCommerce?
B2C stands for business-to-consumer eCommerce. As the name implies, in a B2C business setup, the business is the seller, and the end-user, or the consumer, is the buyer. There are no intermediary parties in between.
On the other hand, in a B2B business setup, the buyer and the seller are both business entities. The buyer may act as an intermediary, who can then sell the products/services to the end-users.
Approaching B2B and B2C buyers requires separate strategies due to the distinct buyer personas and the differences in the target audience's mindset in each case.
Here is a comparison table that lists significant differences between B2B and B2C eCommerce:
|Parameter||B2B eCommerce||B2C eCommerce|
|1. Decision Makers||Multiple||Single (majorly millennials)|
|2. Purchase Type||
|3. Product Detailing||
|4. CTAs (Call-to-Action)||Revolves around how the product/service benefits the customer’s business||Revolves around how the product/service benefits the end-users|
|5. Homepage Design||
|6. Level of Customer Support||
|7. Checkout Process||
|8. Catalog and Pricing Model||
|9. Minimum/Maximum Order Quantity||
For a more comprehensive overview that lists B2C and B2B eCommerce differences, follow this post.
Why Invest in a B2B eCommerce Business?
If a business has an established B2C model for an eCommerce business, going B2B can be the next step forward to expand. On the other hand, if a business has an offline B2B setup, adopting the digital platform should be a priority to stay afloat (considering the impact of COVID-19 on businesses).
Why is B2B eCommerce Important?
- Maintain a competitive edge
- Improved brand visibility
- Expand B2B customer reach
- Fast-track order fulfillment
- Take advantage of analytics for insights
- Trim down the supply chain
- Offer platform for remote interaction
Related blog: Why Sellers Need a B2B Website?
Types of B2B eCommerce Businesses
The different types of B2B eCommerce businesses include:
B2B2B stands for “business to business to business” — an eCommerce model that adds additional parties in the B2B chain. In the standard B2B model, the two parties involved include the manufacturer and the retailer. On the other hand, a B2B2B model has other intermediaries such as distributors, sub-distributors, wholesalers, etc.
B2B2C stands for “business to business to consumer” — an eCommerce model that bridges the gap between B2B and B2C businesses. In this model, the B2B business can directly sell to the individual consumers through B2B partnerships or by directly approaching consumers.
Example: Amazon Business
In a wholesale setup, a business buys bulk products from the manufacturer or a distributor at a much lower price. This is another B2B eCommerce type where the purchased products are then sold at the retail price to other businesses leveraging the eCommerce platform.
Manufacturers are the producers of the products that run large-scale productions at their end. These manufacturers are a part of the B2B network but can choose to run an exclusive eCommerce website too. They can sell products to other businesses and to consumers directly from the website or a dedicated B2B eCommerce app.
Example: EcoEnclose, a sustainable packaging solution selling website
The distributors work closely with the manufacturers and help them bring their products to the market by selling them to the retailers or consumers. Distributors are taking the lead and setting up their eCommerce platforms to shorten the sale time.
Example: Berlin Packaging, glass and plastic container selling business
Download the Report to Analyze Trends that can help you Convert a Crisis Year into an OpportunityDownload Free eBook
Common Myths Around B2B eCommerce (Plus Facts)
Some of the common B2B eCommerce misconceptions and the corresponding facts include:
1. Myth: B2B eCommerce is Uncommon
Fact: There is a perception that B2B businesses cannot stand up to the competition that B2C businesses are giving. However, many brands are already running a B2B model alongside B2C.
Any brand that:
- Is established as a Wholesale business
- Acts as a distributor to retailers
- Is selling to other businesses
— is a B2B eCommerce business! This implies that any B2C business can also operate as a B2B business. The most prominent example of this type of hybrid setup is Amazon. They have Amazon for B2C transactions and Amazon Business for B2B transactions.
2. Myth: There is no Demand for B2B in the Market
Fact: Businesses have a perception that B2C is more popular than B2B in the market. However, with COVID-19 coming into the picture, B2B businesses are actively moving towards digital platforms.
According to McKinsey, 70-80% of B2B decision-makers prefer remote human interactions or digital self-service.
3. Myth: eCommerce is Primarily for Small Orders
Fact: The digital commerce market is changing for good. Initially, people preferred eCommerce for making small-ticket orders, but now B2B sales are also gaining traction.
Notably, 70% of B2B decision-makers say they are open to making new, fully self-serve, or remote purchases in excess of $50,000, and 27% would spend more than $500,000. — McKinsey
Moreover, B2B buyers are optimistic about making online purchases with the same effectiveness as traditional offline models.
4. Myth: B2B eCommerce Does Not Allow Custom Pricing
Fact: In a B2C eCommerce setup, the pricing is fixed and the same for every customer. However, the same is not true for a B2B customer. The prices vary depending on the customer's geography, relationship with the B2B business (short-term or long-term), and the order volume.
A business can set custom pricing for their B2B eCommerce store. eCommerce platforms such as Magento allow running custom pricing when the “Custom Pricing” tool is downloaded from the Magento Marketplace. Likewise, Shopify also offers a “Bold Custom Pricing” plugin for its customers.
Benefits of Starting a B2B eCommerce Business
The major benefits of supporting a B2B eCommerce business model include:
1. Expand Customer Reach
If a business already has a localized B2B eCommerce business, going online will help them expand their reach across borders. If they offer a good catalog, affordable and custom pricing, and a delightful customer experience — the business is likely to broaden their audience of target customers.
2. Automated Sales Process
With the online platform, a business can easily automate the lengthy process involved in B2B sales. In addition, the communication among the sales team of respective suppliers, retailers, and distributors is synchronized and transparent, which further helps in streamlining the B2B transactions.
What are Some of the Popular B2B eCommerce Trends?
According to the Net Solutions’ B2B Commerce Report, the top B2B eCommerce trends include:
1. Improvement in Customer Experience
According to a Google survey, most of the B2B buyers are millennials, who expect a connected customer experience across platforms and touchpoints. A research process that requires contacting sales reps for more details is something that millennials tend to avoid. This, in turn, implies that B2B businesses need to ramp up their website and app to offer a streamlined customer experience.
2. Deliver Omnichannel Experience
B2B businesses are now planning to implement an omnichannel strategy to offer a unified customer experience. Most B2B eCommerce businesses plan to capture a 360-degree view of their customers to bridge the gaps between platforms and channels. In other words, omnichannel B2B eCommerce is expected to grow by leaps and bounds in the next two years.
3. Deliver Personalized Experiences
A personalized experience is the most significant factor that attracts B2B customers. Nowadays, B2B buyers prefer conducting approximately 12 online searches before finalizing a brand. If your business wants to stand out, personalization is a critical area to focus on.
Identifying data-supported ways to improve B2B eCommerce personalization can be accomplished by accumulating customer data through analytics and experimentation with AI and machine learning.
4. Adoption of New Payment Methods
According to Disruptive, only 23% of B2B eCommerce businesses accept fax orders — this is due to the advent of the eCommerce platform and the multiple payments gateways which have made B2B payments safe and secure.
- Magento ensures that the payment gateway is built according to the PCI standards, making it easy to achieve PCI certification
- On the other hand, Shopify offers PCI compliance by default to all of its customers
5. Increased Demand for B2B Order Fulfillment
B2B customers demand faster order fulfillment irrespective of the order volume. This might come as a major B2B eCommerce challenge as backend supply chain management needs to be looked after.
The first step towards improving order fulfillment includes integrating more shipping options across the eCommerce platform. This will be dependent on the choice of eCommerce platform. For example, Magento 2 allows the integration of approximately seven shipping methods.
The second step includes investing in an order fulfillment software that automates and manages the B2B catalog, orders, delivery, returns, and exchanges. Alternatively, one could also rely on third-party fulfillment services to ensure faster turnaround cycles.
How to Choose the Best B2B eCommerce Platform?
When setting up a B2B eCommerce business, the most critical decision narrows down to choosing the best eCommerce platform. This is similar to setting the foundation for a new home.
Many eCommerce product owners provide eCommerce platforms, such as Magento, Salesforce Commerce Cloud, Shopify, BigCommerce, Wix, PrestaShop, etc. So, how should a business choose one of these options?
Here’s a comparison chart to help make an informed decision around choosing the best eCommerce platform:
|2. Salesforce Commerce Cloud||
B2B eCommerce: Best Practices
The best practices for setting up and operating a B2B eCommerce platform include:
- Focus on B2B marketing activities like posting how-to guides, live chats, videos, and blogs. This will help in educating the customers and keeping them informed. In fact, the revenue generated from video-related interactions has gone up by 69% since April 2020.
- Experiment with augmented reality (AR), artificial intelligence (AI), and machine learning to advance the digital transformation of the business
- Work on improving customer experience by building a robust CX strategy based on surveys and customer reviews
- Use B2C strategies for B2B growth
- Maintain a single source of truth and post concise, clear, and relevant content
- Upscale the customer support team so that all inquiries are looked after
- Stick to variable cost structures, i.e., reduce per item costs as the order volume increases
- Focus on going comprehensive with the product descriptions. The more details provided, the better the chances of winning over the customers.
- Improve site-search through voice-embedded research, auto-fill methods, and running effective SEO strategies across the website/app
- Focus on optimizing the B2B mobile eCommerce experience
- Invest in custom order fulfillment and a product information management (PIM) software system that suits business and functional requirements
- Focus on enhancing findability and discoverability across the website and app
List of B2B eCommerce KPIs
For an all-new B2B eCommerce business model setup, measuring how well the business is performing is challenging. To counter the challenge, several KPIs (Key Performance Indicators) can come in handy. Some of which include:
1. Website/App Visitors
Run regular data analytics activities for the business website and app. Record the number of visitors, click-through rate, and conversions stats. These numbers will help the business understand how well they are performing overall. If the numbers are less than the defined threshold value, the business should look up ways to improve traction across the sales funnel.
2. Retention Rate
Are the customers returning after their first-time purchase? If the answer is affirmative, the B2B eCommerce business is heading in the right direction. Customer retention is the biggest KPI for measuring customer satisfaction. To improve the experience further, a business can choose to survey these returning customers for their suggestions regarding the overall customer experience.
3. Customer Lifetime Value (CTV)
Customer Lifetime Value is the sum of the average transaction amount, annual buying frequency, and the years of expected relationship. The higher the CTV, the higher the probability of profits. However, to increase the CTV — the business will have to invest whole-heartedly in customer retention strategies.
4. Customer Acquisition Cost< Profit Made
Customer Acquisition Cost (CAC) is the total cost that a B2B business invests in acquiring a customer. To ensure that the B2B eCommerce business is performing optimally, the business needs to minimize the CAC so that it does not exceed profits. This is possible by making efforts to increase sales funnel conversions, creating strong social media and SEO campaigns, and investing in referral marketing.
5. Churn Rate
Churn rate helps measure the annual percentage at which a business stops placing orders on the eCommerce store. If the existing customers are no longer placing orders, it is time to rethink the eCommerce growth strategy. The best way out is to survey customers to find the gaps and work on ways to mend them.
FAQs Related to B2B eCommerce
Some of the most commonly asked questions around B2B eCommerce include:
1. What is the Difference between B2B and EDI?
EDI stands for “Electronic Data Interchange,” which allows the sharing of purchasing information between the buyer and the seller. This is a digital format copy of order details and invoice.
EDI’s are common in B2B eCommerce due to the large order volumes involved. The data exchange helps mitigate the chances of any loopholes in order fulfillment.
On the other hand, B2B transactions involve selling goods and services through an online platform. An EDI is shared between the buyer and the seller following the transaction.
2. Why do you need PIM for a B2B eCommerce Business?
PIM stands for “Product Information Management” which is a system that synchronizes and manages product data in a unified location. In a B2B eCommerce business, the order volume is usually high, implying that the business owner needs to maintain a large product catalog.
To better manage the B2B eCommerce catalog, investing in a PIM software is a smart solution. As an add-on, PIM software also helps integrate data with the ERP system.
A PIM will merge the product data into the ERP system, and the ERP system will share the information across the back-office modules to improve and automate workflow processes.
3. What are the Best Examples for B2B eCommerce Websites?
Some of the prominent B2B eCommerce examples include:
- Amazon Business
- General Electronics
- H&D Supply
4. How Much Does it Cost to Setup a B2B eCommerce Website?
When setting up a B2B eCommerce website/app, the following costs need to be considered:
- B2B eCommerce platform cost
- Domain name registration
- eCommerce hosting (in case, the eCommerce platform vendor does not offer it)
- SSL certificate
- Payment processing at payment Gateway
- Add-ons, plugins, and extensions
- eCommerce development cost (such as in the case of Magento)
Here is a table that summarizes the approximate cost structure for each of the above-listed parameters:
|1. eCommerce Platform||
|2. Domain Name||$2 —$20 per year|
|3. eCommerce Hosting (for platforms that do not offer cloud-hosting)||$80—$730 per month|
|4. SSL Certificate||$20—$70 per year|
|5. Payment Processing||
|6. Theme and Design||$60—$200 each for paid themes|
|7. Add-on, plugins, and extensions||Depends on the eCommerce platform chosen|
|8. Mobile App Development Cost||$171,450 according to a survey by Clutch|
5. What to Consider when Outsourcing B2B eCommerce Developers?
A B2B eCommerce developer should have:
- Technical Expertise with B2B eCommerce development
- Practical experience in the field
- Understanding and experience implementing omnichannel, multi-channel, and cross-channel strategies
- Knowledge of the top B2B eCommerce leading trends
- Understanding of the difference between B2B and B2C eCommerce websites
- Expertise with Agile Development methodology
- A presentation model for time-frame and budget requirements
- Expertise in designing and development of mobile commerce
- An active communication channel for remote interactions
Related Blog: How to Choose the Right B2B eCommerce Platform?
6. What are the Prominent B2B eCommerce Features for Website/App?
The top indispensable features of a B2B eCommerce website/app include:
- Allow customers to reorder with a one-click system
- Integrate custom pricing options for customers (the base price per item will decrease with an increase in purchase volume).
- Set minimum and maximum quantity thresholds
- Integrate other systems with the eCommerce platform such as PIM, CRM, and inventory management software
- Ability to set user-authority levels where multiple decision-makers are involved
- Allow split shipping option for multiple-locations deliveries
7. Has Net Solutions worked with a B2B eCommerce business?
Net Solutions' eCommerce development team helped Euro Car Parts, UK’s Largest Car Part Supplier, launch a B2B2C eCommerce platform that enhanced the customer experience.
The top features that were integrated along the development process were:
- Click and Collect feature
- Integrating same-day delivery option
- Including more delivery options on the checkout page
- Improving the website speed
- Better search functionality
- Warehouse automation
- Search engine compatibility
- Creating a single-order processing system
- Third-party API uptime monitoring
- Code refactoring
For detailed insight into our process, refer to the case study link mentioned below.
With new businesses plunging into the eCommerce market and with existing ones looking for new opportunities to expand their business, B2B suits the bill. A B2B eCommerce model allows for buying and selling between businesses.
With the prediction that the B2B market is expected to reach $1.8 trillion by 2023, businesses should consider making the shift or plan to go hybrid (i.e., both B2B and B2C).
To help get started, this article aimed to cover everything a business needs to know about B2B eCommerce. It is high time that businesses shift traditional B2B eCommerce online and embrace digital transformation to ensure they maintain a competitive edge.