Ecommerce is growing at a faster pace, and along with B2C e-com, which is at its peak now, B2B e-com is also flourishing. The buyers at the e-com space now have very high expectations, and this demands a lot of effort and initiatives on the seller side. This article will look into various types of B2B eCommerce models and some of the common misconceptions about the same.
What is B2B Ecommerce?
Business to Business e-com or B2B eCommerce is the form of electronic commerce, which deals with the online transaction of goods and services between businesses. Order process is done digitally, and it enables further cost and time saving while buying more efficiently from the wholesalers, distributions, manufacturers, and other B2B sellers.
Last year, a survey showed that about 48% of the enterprises now make their 50–70% purchases online. Also, an additional 23% of companies in this loss do more than 75% of their purchase online. So, the emerging e-com technologies are now largely reducing the barrier to enter into the B2C business add a customized B2B component to it as (B2C2B) and vice versa. The traditional B2B businesses are also now trying to sell to direct customers in a B2B2C model. Let us further explore these different types of B2B ecom models.
- B2B2C model
B2B2C e-com is the business-to-business-to-consumer model, which further avoids the middlemen between the B2B and B2C organizations and puts the business directly with the end consumer. In the B2B2C model, the wholesalers or manufacturers directly interact with the customers. Here, the manufacturer actually sends the products through B2B, and these are then retailed to the customers as B2C. In standard B2B2C models, the manufacturer reaches the end customers by partnering with a B2B provider, and all these transitions are happening online.
In this model, the end consumer also knows that they are getting goods from the businesses which are separate from those that have purchased the goods. Sometimes, the consumer may be purchasing a product from affiliate stores, but the manufacturer will actually send the product.
- Wholesale model
B2B is also explained as the transaction of goods between businesses. Businesses used to make a bulk purchase of goods at a lower price and also the turnaround to sell those at a retail value. These goods are purchased directly from the makers or the big distributors. This is called wholesale, and it is the most popular mode of B2B business. The B2B models in wholesale are present in different industries like food services, retail, construction, healthcare, etc., among others.
Traditionally, the wholesale B2B transactions occur over the phone, email, or through the spreadsheet-based bulk order forms. With the wholesale e-com, everything has now become digital across a B2B selling platform. This e-com platform will let the wholesalers list their products for easy browsing by the retails who can enjoy seamless buying possibilities out there. It is also important to consider a strong database backend for the B2B e-com portals, and RemoteDBA.com can offer the best solutions for this.
- The manufacturers
Manufacturers are those who produce the finished goods in a particular type of category in bulk by sourcing raw materials or parts from different suppliers. They use a combination of machine and labor to produce the end products. These finished goods are then sold to the wholesalers from the manufacturers at a bulk selling price. The automobile industry is a classic example of the B2B manufacturer arena. Manufacturers create the car parts like engines, tires, fuel pumps, etc. Then these are sold to an automotive company, which assembles the entire parts and sells them to customers. In the same way as to how the wholesalers are selling their goods online, the manufacturers do online sell. The B2B buyers are now looking for a better buying experience than that of B2C.
- The distributors
Distributors are those who work with the manufacturers to give market visibility to their products for selling. In the e-com model, the sale happens online over an e-com platform, where the manufacturers work with the distributors who leverage the digital avenues online with a greater scope of selling for quicker growth. As in the case of every B2B model, the distributors work here to shorten the sales to delivery lead time and enhance the customer experience.
One major reason why the B2B marketplace is largely expanding is that B2C is now making a big switch. Even though it is possible to make this transition happen, the learning curve for the same is big. The B2B transactions tend to be a lot larger than the B2C model, and the B2B sales may often rely on longstanding relationships with the vendors.
Some misconceptions about B2B e-com
Being at its early stages of growth, there are a lot of misconceptions about the B2B e-com now. From the simple misunderstanding that it is a very complicated technology to it being a costly affair altogether, let’s try to demystify the myths.
- The thought is that they are not selling B2B
One major reason many brands are not selling B2B is primarily that they do not realize the ground reality. Selling B2B actually comprises a lot of things as wholesale, distributor relationships, selling to different organizations like schools, hospitals, nonprofits, supplier selling to the resellers, and so on.
- The misconception that B2B customers do not want to buy online
As the new generation of decision-makers comes to the purchasing and management power, there is no doubt that their most comfortable and preferred purchasing will be online. All these individual decision-makers are big fans of B2C e-com, which will surely be transposed to B2B marketplaces.
- The belief that e-com needs price transparency
B2B is a low-margin space with fierce competition with the scope of many competitors underbid the opportunities, so many brands are out there those who do want their prices to be announced beforehand. This safeguarding is fully understandable in the supply chain, and this is the reason many of the B2B e-com solutions offer price availability only when the customers log in. With this model, the prices can be presented individually as how it is negotiated with each customer. You can also benefit from the option to enable product visibility to the public and then request the customers to call in for their prices.
So, many kinds of businesses have now adopted B2B eCommerce in a big way. If you are not already into it, this is the right time to explore this avenue, which can surely bring in a transformation in your B2B model.