What is B2B eCommerce?
The Business-to-Business (B2B) model involves two businesses selling products and services to each other. When the transaction happens over the internet, it’s called B2B eCommerce.
B2B eCommerce is growing in popularity by the day. According to Statista, the industry is reportedly worth over $12 trillion, which is over 5 times of that of the B2C market. Those statistics clearly show that B2B eCommerce is the model for the future.
In this article, we explain what B2B is, how B2B eCommerce works, the future of B2B eCommerce, and so much more.
- B2B eCommerce involves two businesses engaging in business transaction with each other over the internet
- The B2B buying process involves identifying the problem, finding resources, comparing solutions, then justifying and completing the purchase.
- The future of B2B eCommerce predicts an increased use of blockchain technology, artificial intelligence (AI), cloud computing and social media
- B2B eCommerce trends to look out for are mobile-first sites, faster fulfilled orders, selling through social media, seamless omnichannel presence and headless eCommerce adoption.
What is B2B Commerce?
B2B eCommerce (Business-to-Business eCommerce) is the buying and selling of goods and services between companies over the internet.
B2B eCommerce is different from B2C (Business-to-Consumer) eCommerce in that the transactions are usually larger and offered at way lower prices, while also involving a longer sales cycle.
Examples of B2B eCommerce and B2C eCommerce
An example of B2B eCommerce is a company selling bulk orders of office supplies, such as paper, pens, and ink cartridges, to another business. The process would involve:
- The client browsing the product catalog
- Selecting the items they need
- Making an order online
- The supplier would then ship the items to the customer’s business address.
With B2C, the business is selling directly to the customer. An example of B2C eCommerce would be a customer purchasing a book from an online bookstore such as Amazon. The customer would enter their payment information and shipping details, and the order would be processed and shipped.
Features of B2B eCommerce
B2B eCommerce solutions are expected to offer certain features in order to be considered as a B2B eCommerce platform. These features are:
- Customer segmentation (with groups and profiles)
- Customer-specific catalog and pricing
- Restricted access
- Volume purchase and bulk discounts
- Tax exemption status
- Flexible payment options
- Minimum order quantity.
How B2B Ecommerce Works
In B2B eCommerce two businesses transact with each other by exchanging goods and services.
Though the buying process for B2B is similar to that of B2C, it’s a little more complex. This is because there is more to lose – every decision can have a far-reaching impact on the progress of the business.
Let’s go through the details of what a B2B buying process looks like.
1. Identifying the problem
The B2B buyer’s journey starts when the customer (retailer or smaller distributor) becomes aware of a problem. This is when they’re aware of a pain point that surely needs a solution.
- A manufacturing company needs raw materials to create their products
- A construction firm needs building materials on a job site
- An office needs a more reliant supplier of desks and tables
2. Finding Information and resources
At this stage the customer commences the search for a solution to their problem. They search to find the right products and services while considering the quality of goods, shipping options, product range, price comparison, etc.
3. Evaluating and Comparing available solutions
By this point the customer has compiled a list of potential suppliers to choose from. Their current task is to figure out which of them is the best fit for the business.
They do that by evaluating each option objectively and comparing them with each other with the goal of coming to a final decision.
4. Justifying the purchase
At this stage, the customer has settled with one supplier for their company but needs to justify the purchase. This stage is characterized by approval from a higher authority.
5. Completing the purchase process
At this stage, the customer has made their decision to purchase a company’s solution and is in the process of “signing on the dotted line.”
There will be lots of negotiations and discussions on the payment terms. Also, the product or service will be evaluated after purchase.
Types of B2B ECommerce
As someone just getting started with B2B eCommerce, you’ll most likely fall into one of the following three categories. Each has its strengths and weaknesses, and many companies operate in more than one category at once.
B2B2C, or business-to-business-to-consumer goods or services are sold directly to consumers without intermediaries. So wholesalers or manufacturers produce goods, which then get sold to B2B companies that then sell them directly to the consumer.
As for eCommerce, a B2B2C business can include a digital storefront that displays and features products from other businesses. The consumer may or may not know this.
Good examples of eCommerce companies using a B2B2C model are:
All of these companies offer goods or software manufactured by other businesses, which they then provide directly to customers. Some examples from other industries are:
The main benefit of B2B2C is that it enables businesses to reach a larger community of buyers than they would be able to reach by themselves, thus creating a bigger market for their goods and services.
Wholesale is a type of business model where a company sells goods or services in very large quantities to other businesses at a lower cost than what it charges the general public (i.e retail price).
- A wholesale setup typically involves a company providing goods or services to retailers, distributors, or other businesses at a discounted price, in order to increase sales and profits.
- The company will generally have a larger buying power than the individual customers, allowing it to offer lower prices.
If you’re a wholesale supplier, buyer-oriented B2B marketplaces are a good way to advertise your products to buyers and retailers with less marketing effort. Buyer-oriented marketplaces exist where there are many buyers and fewer sellers. Buyers in this case have their own online marketplaces. They invite suppliers and manufacturers to show their products and accept bids from different sellers.
Good examples of Wholesale companies using a B2B2B model are:
A manufacturer in a B2B business model is the company that produces goods from raw materials to sell to other big distributors and wholesalers. This type of business model is different from a traditional B2C business model, which involves the sale of products directly to consumers.
Good examples of manufacturing businesses are:
For example, a manufacturer might produce specialty shoelaces.
Those shoelaces are then sold to a luxury shoe manufacturer, who assembles the shoe and adds their branding. From there, completed shoes can be sold in bulk to wholesalers.
With the changing times, manufacturers are tasked with meeting digital demand. Wholesalers, suppliers, other B2B entities, and consumers are looking for increased flexibility in how they purchase manufactured items. Businesses are increasingly needing manufacturers to be able to complete online transactions with access to personalized features like pricing, production schedule, or sizing.
A distributor is an intermediary between the manufacturer of a product and another business (retailer) or end user. A distributor receives products from the manufacturer, then distributes them to the warehouses of wholesalers or large-scale retailers. Distributors are very similar to wholesalers.
A manufacturer and distributor partnership can be created online. By arriving at deals through an online platform, the manufacturer and distributor can achieve faster, more streamlined supply chains to meet or surpass customer expectations.
Some popular distribution companies are:
Stages of B2B eCommerce
As someone just getting started with B2B eCommerce, your business will most likely fall into one of the following three categories. Each has its strengths and weaknesses, and many companies operate in more than one category at once.
The startup phase in B2B business is the period of time when a business is first launched. During this period, the business must focus on laying the groundwork for success. This may include developing a strategy, researching the market, creating a business plan, raising capital, and establishing an infrastructure.
Examples of Startup companies
ClickUp is a workplace productivity app that allows users to integrate their documents, chats, lists, goals and tasks in one SaaS product. The company raised $400M in Series C funding at a $4bn evaluation.
The growth phase in a B2B business is the period in which a business has proven that it can generate consistent revenue and is beginning to expand its operations.
During this phase, the focus is on scaling the business and increasing profitability. This usually consolidates their customer base, introducing new products and services, and exploring new markets.
Examples of growing companies
The expansion phase of a B2B business is when the business is established, operational and well-known. At this stage, the business is looking to grow its customer base and expand its reach.
This may involve targeting new markets, investing in new technology, hiring new staff and developing new products and services, and seeking out new partnerships and alliances.
Examples of expanding companies
At the time of writing this, a good example is Starlink. The internet company is expanding into various Asian and African countries.
The Maturity phase of a B2B business is the stage when a company has reached a steady state of operations, where growth has slowed and the business is running smoothly.
The focus shifts from innovation to refinement, and the company is able to focus on the long-term sustainability of the business.
Examples of matured companies
Shopify is a great example of a mature B2B business. Their merchants run over 1,000,000 businesses in 175 different countries. They’ve also now invested in almost all forms of content: blogs, podcasts, free courses, free guides, and more.
What’s the Difference between B2B and B2C?
B2B (business-to-business) and B2C (business-to-consumer) e-commerce differ in terms of target audience, sales process, and marketing strategies.
The target audience of B2B e-commerce is other businesses, such as suppliers, distributors, and wholesalers. B2C e-commerce, on the other hand, targets the end consumer.
The sales process of B2B e-commerce is more complex than B2C e-commerce.
- B2B sales require multiple decision makers, and the sales cycle is longer.
- B2C e-commerce, on the other hand, involves simpler sales as there is only one decision maker.
The marketing strategies differ too.
- B2B e-commerce are focused on building relationships and creating trust with customers. Content marketing, email campaigns, and social media are used to build relationships.
- B2C e-commerce, on the other hand, focuses on creating an emotional connection with the customer. They use more visual marketing strategies such as videos, banners, and ads.
The Future of B2B eCommerce
The emergence of B2B eCommerce has been a revolution for the industry, allowing for streamlined operations and improved customer service. The industry is continuing to evolve and is embracing new technologies such as artificial intelligence (AI), cloud computing, and social media.
Artificial Intelligence allows for predictive analytics and automated customer service, removing the need for manual customer service input.
Bloomreach, for instance, helps you enhance customer experience by allowing you to capture, store, and manage your client data and provide the required insights to better understand customer behavior and improve your marketing strategy accordingly.
Blockchain technology is also being adopted with smart contracts and distributed ledgers allowing for secure, automated payments. This is revolutionizing the industry by allowing for faster, more efficient transactions and improved customer satisfaction.
Fintech companies like Binance allow businesses to move funds without going through the bureaucratic process of traditional banks and can also handle large transactions.
Cloud Computing and Social Media
Cloud computing and social media are also being embraced, allowing for improved customer engagement and data gathering, as well as improved scalability and cost reduction.
Most businesses today utilize both cloud computing platforms and social media to become more agile and efficient, while improving customer service.
We expect to see several trends establish a strong foothold and make their way into B2B eCommerce in 2023. Not only will these trends shape the B2B eCommerce environment, but they’ll also help business leaders in delivering better and smoother experiences to both new and existing customers.
Here are the top trends to anticipate in 2023:
- Social eCommerce
- Mobile wallets
- Digital supply chain management
- Automated B2B transactions
- Personalized customer experience
- Brand strategy in the metaverse
- Personalized customer experience
Let’s discuss omnichannel presence. Consider Disney, Starbucks, Bank of America and Amazon. With these services, you can interact via web, mobile, voice, digital, and email, all in a connected way. Therefore, if you switch from one channel to another, the experience continues seamlessly.
Many of these platforms also make it possible and easy to buy right from your social media apps (i.e., social eCommerce). Furthermore, B2B companies like PayPal provide a mobile wallet that you can preload with funds and shop anytime you want. Automated transaction is also a very common feature in many B2B eCommerce platforms.
B2B eCommerce Statistics
Here are some statistics to keep in mind for 2023:
|Mobile-first websites||Your customer experience on mobile must be great given that people are 62% less likely to buy from a brand with a poor mobile experience||ThinkwithGoogle|
|Faster fulfilled orders||Customer expectations regarding order delivery times are increasing. Before COVID, UPS had an average shipping time of 2.96 days. However, by the end of 2020 he increased to 4.96 days. By the end of 2021, it has dropped from about 2 to 2.35 days.||Hubspot|
|Selling through social media||Today, 46% of B2B buyers use social media to learn about available solutions, 40% use it to compare solutions, and 35% use social media for important pre-purchase information finding..||Gartner|
|Headless CMS||Companies using a headless architecture are 77% more likely to expand into new channels than those without (54%).||Salesforce|
|Seamless omnichannel experience||B2B customers expect to be able to shop across multiple channels. According to a recent McKinsey & Company report, B2B buyers now regularly use over 10 channels to interact with suppliers, up from just five in 2016.||Mckinsey|
B2B Content Marketing Strategies
Content marketing is the foundation for the growth of any B2B business. With an effective content marketing strategy, a B2B business can attract the right customers in a relatively short amount of time.
Here are several effective content marketing strategies for ECommerce.
SEO marketing is a B2B content marketing strategy that uses keywords, backlinks, and other optimization techniques to increase website visibility and drive organic traffic. It is an effective way to reach target audiences, as it involves creating content that is relevant and useful to them. SEO content can also help to improve search engine rankings, establish credibility, and build trust with customers.
Other B2B content marketing strategies are blog posts, videos, infographics and webinars, all with the goal of increasing brand awareness, engaging potential customers, and ultimately driving sales for business-to-business (B2B) companies.
These types of content marketing focus on educational and informative content that is tailored to the target audience’s needs and interests. Through content marketing, your target customers can find answers to general industry topics and come to know you as an authority in your niche.
Email marketing is an effective B2B content marketing strategy used to target potential customers and build relationships. It involves sending emails to a subscriber list with useful, relevant content or promotional offers. Email marketing can help to establish brand awareness, increase website traffic, generate leads, and convert leads into customers.
Email newsletters can also be used to provide valuable information about products, services, or industry trends, keeping customers informed and engaged.
B2B eCommerce Myths
Myth #1: B2B sites don’t have to be mobile-friendly
Many people think that because it’s a business-to-business transaction the platform doesn’t have to be mobile-friendly. However, that’s simply not true. Like direct product consumers, more than ever before, B2B customers are using their smartphones to research products, go over reviews, compare features and prices, and make purchases. If your website is not optimized for mobile users, you will lose business.
Myth #2: B2B customer service can’t be managed online
Personal relationships used to be vital to B2B customer satisfaction. Today B2B customers expect quality and responsive customer support service regardless of whether it’s online. The awesome thing is that most eCommerce tools allow for seamless communication with customers using email, phone, text, or live chat.
Myth #3: B2B customers don’t want to order online
Not true. We’re past the days when customers had to rely on sales representatives for product information. The internet is ubiquitous and most Gen-Z and millennials are tech-savvy.
In addition, improved cybersecurity has helped tremendously in eliminating the fear of hacking and encouraged more customers to carry out transactions online.
Myth #4: B2B eCommerce is only for large companies
In reality, B2B eCommerce is suitable for businesses of all sizes. Whether you’re a small business with a few dozen customers or a large company with hundreds of customers, B2B eCommerce can help you streamline your operations and provide a better customer experience.
Examples of B2B eCommerce companies
Amazon Web Services (AWS) is a cloud-computing platform providing infrastructure and hosting services for businesses. It offers a range of services from simple storage and computing to full-fledged database and analytics solutions. It is a successful B2B eCommerce company because it has enabled companies to focus on their core competencies by providing them with the tools and infrastructure to quickly deploy and scale their applications.
Salesforce is a cloud-based customer relationship management (CRM) platform that helps organizations to manage their customer relationships, sales and operations. It provides a range of services for businesses, including customer segmentation, marketing automation, analytics, and customer service.
Shopify is a cloud-based eCommerce platform that helps businesses to create online stores, manage their inventory, and process payments. It is a successful B2B eCommerce company because it has enabled businesses to quickly set up their online stores and manage their eCommerce operations.
What are the best B2B eCommerce Platforms?
Shopify is an eCommerce platform that allows businesses to create and manage their online stores. It provides tools for businesses to manage payments, shipping, inventory, and customer data.
- Standalone B2B sales channel
- Multiple user accounts
- Accounting and order management tools integrated
- ERP and CRM integration
- Over 100 payment providers
- Free trial available.
- Basic – $29/month.
- Shopify- $79/month.
- Advanced – $299/month.
Oracle eCommerce is an enterprise-level eCommerce platform designed to help businesses create and manage an online store. It offers features such as product catalog management, customer relationship management, order management, and payment processing.
- B2B and B2C e-commerce support
- Omnichannel solution offered
- Centralized data management
- Supports multiple currencies and languages
- 3PL Management
- Quote and subscription-based
- Starts from $40000
Bigcommerce is an eCommerce platform designed to help businesses create and manage an online store. It provides a range of features and tools to help businesses create a professional-looking website, customize the store design, manage inventory, accept payments, and more.
- B2C and B2B solution integrated
- Unlimited storage
- Data, APIs, and SDKs all present for free
- Advanced report analytics
- Free templates included
- Unlimited staff accounts
- 15 days free trial available.
- Standard: $29.95/month
- Plus: $79.95/month
- Professional: $299.95/month
- Enterprise: Custom pricing based on business requirements
B2B eCommerce Mistakes To Avoid
Not focusing on customer experience
Companies should strive to make the process of searching for and buying products as easy and intuitive as possible. This can include providing helpful product descriptions, detailed product images, and accurate search results.
Failure to optimize checkout process
Customers should be able to easily navigate the checkout page, complete their purchase quickly, and be offered multiple payment options. Companies should also implement a cart abandonment strategy such as offering discounts or retargeting campaigns to encourage customers to complete their purchase.
Poor marketing efforts
Businesses should also be aware of the importance of marketing. B2B companies should be utilizing multiple marketing channels such as email, social media, and search engine optimization. Companies should also be utilizing analytics to track customer behavior, measure marketing campaigns, and identify areas of improvement.
Bad customer service
Finally, B2B businesses should not overlook customer service. It is important to respond to customer inquiries promptly and provide helpful and accurate information. Companies should also strive to provide helpful content such as tutorials, reviews, and product comparisons to help customers make informed decisions.
As a small-business owner, you might want to work with a B2B company at one point in the future. Therefore, it’s important to know what B2B is, how it works and what its future will be like, and so on. If you’re planning to join the B2B eCommerce bandwagon, this article also gives you all the information you need to know.
Next Steps: What now?
- Define your eCommerce goals
- Identify your B2B customer needs
- Identify your marketing channels
- Purchase a domain name for your business
- Choose a hosting provider
- Design your website with a website builder
- Market your business
Further reading – Useful Resources
- The best e-commerce hosting providers in 2023
- The best website builders we recommend
- What is e-commerce? An Introductory Guide
- Types Of e-Commerce
- What is B2C eCommerce? A Complete Guide
- What Is C2B eCommerce?
- What Is B2G eCommerce?
- What is C2G eCommerce? Understanding the Basics
- Business Models In eCommerce