There is much more to eCommerce than convenient online shopping. While true on the consumer side, a more complex side of it involves large-scale orders, unique relationships between buyers and sellers, and often involves customized tech integrations.
So, what is B2B eCommerce? The definition is simple: business-to-business commerce or commercial transactions between two businesses. In this article, we take a closer look at how B2B eCommerce works, how this model compares to the traditional business-to-consumer model, and discuss the different types of B2B eCommerce models.
Let’s dig in!
Table of Contents
What Is B2B eCommerce?
As mentioned, all types of B2B eCommerce focus on selling services or products between businesses online. B2B eCommerce may offer digitized sales and self-service ordering, building on other aspects that traditional eCommerce channels do with the hopes of reaching more customers, ultimately streamlining the sales cycle.
Instead of focusing on the end customer, B2B eCommerce may also deal in providing services and goods to other wholesalers or manufacturers. Take software-as-a-service (SaaS) providers, like Microsoft Entra which is a service that enables businesses to invite guests who can collaborate with their organization. In the spectrum of B2B, this means securely sharing company services and applications with other organizations while securely maintaining your own corporate data.
eCommerce Platforms
Specialized platforms that help with creating transactions between businesses and consumers online are eCommerce platforms. Essentially, they serve as digital marketplaces for selling and buying products, providing an efficient and centralized way for connecting, negotiating, and conducting transactions online.
Key features of these platforms may include:
- Online product catalogs
- Account management tools
- Order management tools
- Integration with enterprise resource planning systems
- Payment and invoicing management
- Collaboration tools
B2B vs. B2C ECommerce
B2C eCommerce focuses on transactions between businesses and consumers, while B2B covers the same between two or more companies. There are several key differences between catering to the needs of customers and other businesses.
- Target audiences: B2B targets other businesses and organizations while B2C targets customers and individual consumers.
- Transactions: B2B entails more complex and larger transactions with negotiated contracts, long-term relationships, and bulk ordering. On the other hand, B2C mostly consists of one-time, small transactions with individuals.
- Purchase decision process: In the case of B2B, purchase decisions are usually made by stakeholders based on research and data, while individual customers will mostly make purchases based on immediate needs, emotions, personal preferences, and desires.
- Customer relationships: B2B focuses on long-term partnerships with personalized customer service and ongoing support. B2C focuses on customer acquisition and retention to appeal to individuals, most often via customer loyalty programs, marketing campaigns, and branding.
- Product complexity: B2B offers more specialized and complex services or products that meet industry requirements and business needs. B2C concentrates more on mass appeal, offering more standardized products and services for the everyday consumer.
- Sales process: B2B will involve consultative sales approaches with reps actively interacting with business customers through negotiations and product demonstrations. In B2C, the sales process is more reliant on automated processes, with customers browsing, selecting, and buying products independently.
- Marketing strategies: B2B campaigns are aimed at specific audiences: industries, decision-makers, and businesses with an emphasis on business benefits, ROI, and value propositions. B2C uses broader marketing scopes to appeal to a wider customer base, putting more emphasis on lifestyle branding, emotional appeal, and immediate gratification.
Because of the number of items ordered, B2B eCommerce often requires custom eCommerce development and technology to handle bulk orders and purchases efficiently.
Another significant difference between the B2B and B2B eCommerce comparisons is pricing. Business-to-business transactions are more nuanced, requiring account-specific prices often negotiated by a sales expert representing the customer. Ordering quantities may also be massive, often requiring proprietary systems and custom-developed platforms to manage and fulfill orders efficiently.
Types of B2B ECommerce
There are different B2B business models that cater to various business challenges and needs. As such, the most common types of B2B eCommerce include:
- B2B2C
- Wholesale
- Manufacturing
- Distribution
Business-to-Business-to-Consumer or B2B2C
B2B2C covers businesses that sell their goods to other companies, who then offer them to end consumers. This model often includes partnerships between retailers and wholesalers or manufacturers to create seamless distribution across the funnel.
A good example of this model would be Amazon, which hosts other retailers’ stores, who then use its marketplace to sell their goods. Additionally, Amazon also deals with end consumers directly.
Wholesale
This model aims to sell products in bulk to businesses, retailers, or even end consumers if they require massive quantities. Sysco and Unilever are prime examples of wholesale B2B eCommerce. These businesses usually offer discounts based on purchase volume or have account-based pricing for their buyers.
Manufacturing
These organizations sell their products directly to other companies, usually to retailers, wholesalers, or even other manufacturers that are looking for materials or components for their own production workflows.
Fine-tuned eCommerce development is critical for manufacturers, as they need to streamline their orders, offer account-based pricing, and potentially manage several different shipments for the same partner, requiring sales reps to be readily available for potential assistance.
Siemens AG from Germany is an excellent example of a B2B manufacturing giant, offering different products and services in different niches like energy, healthcare, and IoT, catering to B2B clients across the globe.
Distribution
These organizations play the role of intermediaries between manufacturers and retailers or even wholesalers. They're a vital aspect of the supply chain as they ensure timely product distribution, inventory management, and logistics to fulfill orders. HD Supply is a great example of a B2B distributor.
Business Stages: How B2B eCommerce Works
Each B2B company goes through specific development stages and must handle different challenges. Understanding each of these stages can help them implement the necessary strategies to enable continuous development and scaling.
To sustain this growth, B2B companies should adopt a digital-first approach, as more than half of their revenue will be from online channels. This means that they must focus on sound eCommerce strategies, invest in eCommerce SEO, and work with great eCommerce design agencies to create a converting digital ecosystem.
Startup Stage
This is the very beginning of a B2B organization, where the focus is product development, market research, and the establishment of a solid customer base. Startup B2B companies need to know who their customers are, have a defined value proposition, and create a strong brand identity.
The startup stage also serves as a great ground for creating a unique buying experience that will help them grow and scale. This mainly includes seamless orders, reorders, personalized offerings, intuitive site navigation, and self-service.
Growth Stage
As sales increase, the customer base expands, and the brand becomes more prominent in the market, businesses should focus on scaling their operations and optimizing their processes.
During the growth stage, B2B organizations should seriously consider eCommerce automation workflows and other software to help them scale their operations without having to focus on repetitive, manual tasks.
At this stage, businesses should also ensure that their platforms are up to the task of handling larger order volumes with efficiency. At this stage, businesses should reassess their platform’s order processes, streamlining and optimizing possibly unintuitive segments.
Expansion Stage
This phase may involve international expansion, entering new markets, or introducing several new product lines. Businesses strive to grab a larger share of the market and establish themselves as leaders through investments, acquisitions, and strategic partnerships.
The expansion stage is all about looking into historical data to make the right decisions. You can utilize product search data and compile customer input to identify the most promising new products to include in your inventory.
Similarly, if you're contemplating venturing into new markets, you can delve into web tracking information to understand visitor behavior on your site and assess traffic patterns and trends on any non-transactional sites you operate in different regions.
Maturity Stage
At this stage, you run an established and stable B2B organization. The company has a well-defined place in the market with regular and loyal customers and regular revenue streams. This stage is about optimizing operations, nurturing customer relationships, and potentially exploring new business models.
This can entail expanding your product/service offerings or coupling manufacturing with distribution to make more profit and fine-tune your operations. The maturity stage still requires businesses to adapt to the newest technologies and market trends to remain competitive.
B2B eCommerce Benefits
Below are the main benefits of B2B eCommerce:
- Be a part of a growing market: The global B2B eCommerce market was valued at $9.2 billion in 2023 and is projected to reach $33.3 billion by 2030.
- Expand your reach: Continuous connectivity and new technologies can help you adapt to ever-changing purchasing habits without any geographical boundaries.
- Better brand recognition: Utilizing eCommerce channels allows B2B companies to enhance their brand presence and reputation with the help of online marketing strategies. An online presence also helps with nurturing buyer relationships which can translate into improved customer satisfaction and frequent orders.
- Increased sales: Automated sales tactics and personalized offers can help B2B companies ensure a steady cash flow and facilitate long-term partnerships.
- Enhanced efficiency: B2B eCommerce platforms and automation can help with streamlining basic operations, and the gained data can help decision-making processes, boosting the efficiency of the company.
- Faster order fulfillment: eCommerce for B2B businesses also expedites sales and delivery processes. The data is synchronized across the entire system and all channels, which can help with inventory management, stock management, and shipping.
- Become more competitive: With more than half of B2B revenue coming from digital channels, not having a dedicated B2B eCommerce platform is a huge setback for every serious business.
- Better analytics: eCommerce platforms also enable business owners to gain insight into precise reports and make data-driven decisions pertaining to market trends, customer behavior, and more.
B2B eCommerce Examples
Below are only a handful of B2B case studies where businesses reached new heights thanks to implementing advanced eCommerce solutions tailored to their needs.
These platforms streamlined order management, enhanced customer relationships, and provided real-time insights for smarter decision-making. Ultimately, they helped the companies become more efficient, inducing growth and profitability in their operations.
McKesson
Mckesson is a B2B pharma distributor that started its digital transformation the right way. It knew from the start that an eCommerce platform must feature comprehensive operations for sales, customer service, and fulfillment to provide better customer outcomes and make smarter business decisions.
The company dispenses over 150 million prescription items annually supporting 80,000 patients with LloydsPharmacy Clinical Homecare and operates AAH (All About Health), The UK’s largest pharmaceutical wholesale company.
After implementing their new B2B web shop, the company managed to see a 90% decrease in average order times.
Tradelink
Tradelink is an Australian plumbing merchant that wanted to modernize its operations and services. To achieve this, the company wanted to launch an eCommerce platform that can cover the company’s scope and scale, given that the organization has a total of 200 branches across the country with 1300 team members and 300 cars.
After implementing a new eCommerce platform, Tradelink managed to modernize its services and provide better overall customer experiences to its clients. With the help of new tech and a modernized digital ecosystem, the company has seen a massive 346% increase in customers, a 338% increase in revenue, and a 373% increase in orders.
AMMEX
AMMEX, a leading provider of personal protective equipment worldwide, experienced a massive increase in demand for health and safety products during the COVID-19 pandemic. With web traffic soaring and a 670% increase in demand for disposable gloves, the company urgently needed to manage the influx of orders effectively.
Leveraging B2B eCommerce, the company refreshed its sales experience, and within 10 weeks, nearly 90% of the customers used the platform to place their orders. Manual order entry was also eliminated, which resulted in improved sales productivity, and representatives had more time to build stronger relationships with the company’s clientele.
Conclusion
B2B eCommerce is making massive waves as the industry grows at a rapid pace. Whether you are already a part of this expanding digital landscape or thinking about shifting your current operations online, you need to ensure that your eCommerce platform is up to the task to either scale with your operations or handle your current workload.
Fortunately, there are several major-league eCommerce development agencies that can help with a digital solution that will meet your demands — no matter whether you’re in the startup or maturity stage.
FAQs
What factors should businesses consider when choosing a B2B eCommerce platform?
Businesses should ensure that the platform is flexible and scalable enough to accommodate future expansion and business changes. Security features also matter, and businesses should ensure that the system features data encryption, protects against cyberattacks, and is compliant with pertaining industry regulations.
Naturally, the user interface should also be intuitive and responsive to cater to every customer's needs and preferences.
How important is user experience (UX) in B2B eCommerce?
UX is a critical aspect of operating a successful eCommerce platform, as it directly impacts rankings, conversion rates, and site engagement. That said, a sound platform should offer an intuitive browsing experience, easy site navigation, fast load times, and mobile responsiveness.
Simplify the checkout process and provide clear calls to action to facilitate conversions. Invest in user-friendly design elements, such as intuitive search functionality and interactive product filters, to enhance usability and help businesses find what they're looking for quickly.
Which is the largest B2B eCommerce company?
Some of the biggest B2B eCommerce companies are eWorldTrade, Made-in-China, Amazon Business, and Alibaba.
