Business-to-business electronic commerce — commonly known as B2B eCommerce — defines the marketing, selling, and distribution of products from one business to another through online channels.
As more businesses adopt the B2B eCommerce model, buyers’ expectations are now mimicking those of B2C customers. What does this mean for wholesalers? One thing: the need to adapt … or be left behind. But, how?
B2B buyers now prefer eCommerce self-service options at every stage of the funnel — from awareness to consideration to purchase.
The distinguishing factors of a profitable B2B business include:
All of these factors utilize eCommerce or digital technologies – so it goes without saying that investing in B2B eCommerce pays dividends over time for wholesalers in the form of:
Ultimately, these advantages not only lead to higher revenues but also equip wholesalers like you with the right tools to scale and nurture long-term customer relationships. In this guide, we’re going to explore the size of this opportunity, how important it is to create a tailored experience for wholesalers and distributors, and lay down the practical pathways to get there.
At the close of 2017, B2B eCommerce was estimated to be worth a global total $7.661 trillion. More than triple the B2C eCommerce market. In 2018, that number hit $10.6 trillion: over five times that of B2C.
There are obvious parallels between the shift we’ve seen in B2B trading in recent years and the earlier shift in the B2C market where consumers thought “online-first” and retailers had to follow suit. The average B2B buyer does a significant amount of independent research and is more than halfway through the average purchasing cycle before they reach out to a supplier.
With this in mind, wholesalers without self-service eCommerce risk being overlooked by customers at the awareness and consideration stages. Wholesale buyers have spoken — they want the flexibility and autonomy that retail customers have had for years. Wholesale businesses are seeing the writing on the wall and responding to a resounding customer need to remain competitive.
Let’s take a look at some of the key reasons wholesalers are shifting to eCommerce, as well as the advantages of moving your business online.
Today, the B2B eCommerce industry has multiple business models, including distributors, manufacturers, retailers, and wholesalers all selling online. Compared to their online sales in 2016, B2B companies witnessed significant growth in 2017:
Since then, as the global B2B eCommerce market value of $10.6 trillion in 2018 has already highlighted, growth has only intensified. What’s more, Asia Pacific is blazing ahead of North America and Europe with a market share of almost 80%. Three quarters of manufacturers, distributors, and wholesalers who don’t currently operate an eCommerce site plan to launch one within two years. Now’s the perfect time to get a jump on your competition.
Discover: The concrete differences between B2C and B2B eCommerce, How to encourage adoption among your existing B2B buyers, Which operational tasks you’ll never have to perform manually again.
Wholesaling can be a profitable business venture if it is paired with an effective strategy. The following incentives could be just what you need to boost your business for long-term growth.
Offer specials that bring retailers better-than-wholesale prices. Building double savings into your offerings through daily, weekly, or monthly deals will put you at a competitive advantage and help you move your merchandise more quickly and easily. B2B buyers will watch for these specials and appreciate the added savings they receive when they deal with your company — which means more orders for you.
Like any retail establishment, wholesale businesses can also offer special deals on merchandise, beyond the initial wholesale discount. You can also offer incentives in the form of discounted prices for bulk orders.
Provide outstanding customer service. Always treat your buyers with courtesy and radiate professionalism. Be willing to go the extra mile for a retailer who purchases your products, and never be afraid to lose an occasional “battle” in order to win the B2B “war.”
Treat every retailer with empathy and understanding — even if occasionally you have to refuse a request. This sort of treatment will go a long way toward creating loyal, higher-volume wholesale customers.
Make wholesale ordering, delivery, and billing as seamless as possible. Automate your order management and product distribution processes as much as you can. The key value of automation is that it streamlines complex fulfillment processes and reduces the need for manual labor, enabling you to provide better, more efficient customer service from ordering to payment and shipping.
Streamline your operations. Business owners that run their own companies efficiently expect the same from their suppliers. That means the onus is on you to maximize operational efficiencies at your own business. Integrating inventory, finance, shipping, logistics, etc. within an intelligent B2B inventory management system or ERP inventory management system is a win-win for the customer and your business.
Make order recommendations. You may want to suggest additional merchandise based on the order placed by the retailer, a process that can either be automated or handled by a live customer service representative. This is the equivalent of selling add-ons in retail sales.
Create compelling, eye-catching campaigns. Aesthetics are just as important as content. Use color, contrast, and other professional design elements to attract the attention of new B2B customers with an engaging digital marketing campaign, following up with sharp copy and clear calls to action.
Offer special discounts to new buyers. A one-time discount for new customers can be an effective way to attract new business, whether the customer is a retailer or a consumer. If they like you enough, they’ll keep coming back, even without a discount.
Offer incentives for referrals. It’s all about who you know. Your buyers have their own networks. Leverage them by offering a reward for referrals so you can easily tap into these wholesale connections.
Advertise a free gift with every new buyer’s first purchase. Everybody likes presents, including B2B customers. Consider offering different gifts based on the size of the initial order. You’ll make it even more likely that a buyer will select your company as its supplier while encouraging a larger initial purchase.
Provide limited-time offers that encourage retailers to buy now. You’ve got their attention. Don’t lose it. Building deadlines into your offers can provide the incentive your prospect needs to move from “maybe” to “yes.”
As a wholesaler, you probably have already developed several metrics and KPIs that you use to measure the state of your operations and overall success. These metrics usually fall into one of three categories: quality, service, and business operations.
Here are a few sample metrics that are especially relevant to wholesalers:
Of all the metrics and KPIs a wholesale business can track, there are two in particular that stand out: (1) customer lifetime value (CLV or LTV) and (2) visitor order time. They are very important to your operations, a good indicator of some key aspects of your workflows, and are pretty easy to improve by moving your store and operations online.
Customer lifetime value (CLV or LTV): The total monetary value a customer will bring to your business over the course of their lifetime. This measure is significant, because it helps you see not only what customers buy the first time, but whether you are able to get them to return, multiple times.
Going online can increase LTV because it simplifying the order process, making it easier for customers to order from you, and making it easier to research your product. They will be more likely to return if they find a quick and easy ordering process.
Visit to order time: This is the time it takes from the point that your customer first considers placing an order to the time that order reaches your fulfillment center. With a B2B eCommerce store, this metric regularly improves: placing orders is faster, and the overall sales process is streamlined.
With customers able to access details for research and place their order at any time, visit to order should also decrease. Lastly, measuring the state of your operations will become easier when you move online, especially if you’re using a B2B eCommerce platform to help you take a more comprehensive look at your operations.
The benefits of eCommerce don’t just lie with consumers. B2B businesses with eCommerce capabilities outperform their peers by almost every metric. Top-performing B2B businesses are 70% more likely to use digital technologies to automate processes with customers, suppliers, and partners. In an environment where the sales cycles and relationships are longer than B2C, eCommerce frameworks and digital technologies allow wholesale businesses to be more efficient, provide personalized customer service, and use analytical data to inform business decisions.
This is a far cry from the physical ledgers and order forms used by traditional wholesalers. Also, 86% of B2B buyers prefer ordering using a self-service portal rather than talking to a sales rep. Likewise, 69% prefer direct payments like a B2B payment gateway over purchase orders and invoices.
To be competitive, you need to invest in technology.
Integration is king when it comes to a B2B eCommerce, and standalone eCommerce platforms have been proven to be inadequate. Various performance parameters, like on-time delivery, order accuracy, inventory visibility, and time to process orders have had great impact on third-party services:
Fully 96% of B2B businesses believe integrations of various supporting systems are business-critical and a wise decision.
The B2B buying cycle can be extremely lengthy and complicated, adding on to the inertia contributed by the potential cost of implementation and conflicts between direct and online channels for many organisations. The stakes are high, but so are the potential rewards. Studies have shown that average value order increases by 44% when B2B customers are migrated online.
In a time when companies are struggling to find growth in traditional channels, this may be the best way to stand out from competition and chase sales opportunities. Now that you know that the time has come for a serious commitment to B2B eCommerce, there are a few fundamental requirements of features and design to consider.
With the rising trend of wholesale merchants looking for solutions online to widen their distribution channels, B2B eCommerce stores are becoming more commonplace. However, unlike their B2C counterparts, B2B stores rarely have the same design aesthetic or branding that retail channels enjoy.
How does a B2C eCommerce website differ to the design of a B2B website? When thinking about your own B2B eCommerce website design, it should be experience-driven. The website features and development should focus on ease-of-use, efficiency, and clarity. Special attention should also be paid to the bulk ordering of multiple product variants, as well as simplified re-ordering processes.
Without branding or customizations, your B2B website quickly becomes disjointed from the business as a whole. If you’re a hybrid business, it’s important that you standardize your branding across B2B and B2C channels to give buyers a visual preview into what you sell.
Customizing the login page. This is an important step when aligning your retail and wholesale branding. Buyers who go to your wholesale store should instantly see the brand connection between your B2B and B2C stores.
High-quality product imagery. When you are selling commonplace items it can be hard to distinguish your products with just words. Buyers get a feel of what to expect before they even enter their store.
Creating detailed product descriptions and a good catalogue. When you pitch to prospective customers, what will you show them? Examine your product catalogue and make sure your products are represented in a way that shows them in their best light.
And when someone does decide to buy, make it easy for them with a clear, simple ordering system.
The process of selling and ordering online is key to providing a smooth purchase experience for your customers. It’s also essential to have solid operations in place to make managing transactions easy for your staff.
Here are some features to consider:
Adjusting pricing levels of products need to be a breeze, and functions to track orders and inventory are must-haves. The trick to being successful at selling wholesale, is not necessarily to sell at the lowest price. If you offer high-quality goods, sell on value rather than price.
The focus on the quality of your products should be visible and well explained from the moment a buyer lands on your store.
Enabling easy content and product management on your eCommerce platform from the start. This will save money and add profit, as research has shown that the more channels customers can buy from, the more they spend and the more loyal they become.
Opening a channel for acquisition and retention creates new ways to market and reach customers. You get to optimise your organic and paid search on the Internet, as well as email campaigns and even social media platforms.
Many businesses don’t consider the full impact of their marketing mix until the site is launched. Planning for this up front can shorten the time to generate revenue.
Here’s what to consider:
Enabling customer self-service. Giving your customers the ability to control access, manage an order, track order status, and make changes on the move eliminates phone calls and frees your salespeople for more productive purposes.
Self-care portals should also provide your staff with opportunities to interact with customers for that extra “human touch.” Over time, your customers will become more familiar with the online ordering process, making it easier for self-ordering without any assistance on your end.
Optimizing search for better visibility: The right back- and front-end also improves your store’s search engine optimization as it allows pages be indexed by Google. By providing the ability to create custom content, these pages have a higher chance of being ranked.
As a bonus tip, ongoing maintenance and refinement of the site is required to keep up with customer needs. At the start and in the design phase, analytics should be set to track and measure success. Embracing big data analytics to constantly enhance customer experience for your buyers. Find suitable tools to fix optimal pricing for your products, identify niche customer segments, pinpoint customer touch points, uncover obscure insights, and more.
Before tracking metrics and analytics for your eCommerce platform you should also chart baselines against existing sales channels so that improvements can be monitored against goals. Once it’s all up and running — how will you measure success?
We’ve already covered the big picture reasons to convert to wholesaling online. Now, let’s get detailed about the marketing areas where your business can grow if you start using wholesaling software.
In a non-digital B2B world... When a customer places an order, you create a sales order to be used by various people from accounting to fulfillment. When you purchase products or supplies, you create a purchase order. All these orders, along with their status, need to be invoiced and sent on to the departments to keep track of that vital information, including finance, warehouses, and shipping.
None of this changes when you move your wholesale operations to an online platform, but here’s what does...
This all boils down to the fact that you could be saving a lot of time, reducing a lot of manual work and improving the accuracy of the entire process.
If you fulfill in house, you can be sure your warehouse is using updated inventory information and sales orders. Coordinating with a third-party provider, you’ll quickly see the advantage of real-time updates: improved communication, more transparency, and a reduction in processing errors.
Moving online empowers your sales reps out on the road and their workflows:
If you extend your online operations to a mobile application, you can make the sales process even easier.
No more carrying along stacks of catalogs. And, if a rep wants to close a sale quickly and easily on the road or at a tradeshow, a mobile app let’s them do it.
If you wholesale from multiple touchpoints, for example, through several sales reps, a warehouse, and online, you’ll be able to consolidate all this data, and quickly communicate amongst all areas, rather than waiting for manual updates and meetings. This simplifies workflows by making them more accurate, eliminating what used to be lots of errors in overselling, understocking and selling stock that was already accounted for.
With all the information now stored in one place, employees don’t have to wait for a handover from other departments to get the data they need to do their job right. For example, your warehouse manager in Australia doesn’t have to wait for a manual update from your warehouse manager in Indonesia.
Rather, having all your information on an online platform means warehouse managers can pull up the report they need, not having to wait for the other data to come along. With that autonomy comes more knowledge about the state of the business and — with it — better, faster, more accurate decisions.
Whether it’s adding an international warehouse or just adding even more sales teams, expansion while online means, very simply, that your system can handle it. Without much effort at all, you can:
Growing your B2B eCommerce business doesn’t have to be complicated or take years to do. What does help, is knowing the most efficient and cost-effective ways to do it, along with the key metrics and KPIs you should pay attention to.
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