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What is B2B eCommerce and How Can It Help Your Business?

Let’s start with the basics: B2B eCommerce stands for “business-to-business electronic commerce.” Of course, you may have already known that, but we’ll define these two terms in case they’re new to you.

  • eCommerce refers to purchasing or selling products and services online. eCommerce typically does not involve a physical store, as the products either are stored in a warehouse or are completely “intangible” services, such as e-books for Amazon Kindle or even consulting. Some brick and mortar businesses also have eCommerce websites for online retail. In those cases, consumers have the option to go into a store and buy something, or order it online and have it shipped to their homes.
  • Business-to-business or B2B refers to commercial transactions between two businesses, as opposed to “business to consumer,” or “B2C” transactions. It’s easiest to think about this as a product or service that one business provides to another, instead of individual consumers.

The definition of these two terms together gives you B2B eCommerce, or commercial transactions between two businesses that take place via the Internet, typically through websites and online portals. The end goal is to up efficiency and convenience for all parties involved, but there are definitely some advantages and disadvantages of B2B eCommerce, which we’ll get into next.

B2B eCommerce advantages and disadvantages

Business owners can benefit from the B2B model, but it can also have certain drawbacks. Let’s look at both sides.

How B2B eCommerce can help your business

  • Higher conversion rates – The B2B model of eCommerce improves supply chain management processes, which can increase customer loyalty because of the convenience. This, in turn, can improve sales and boost conversion rates.
  • More flexible pricing – The market is full of B2B eCommerce solutions that can automate sales, purchasing, and inventory management activities. Automating these processes can bring about some dynamic pricing strategies, i.e. prices that are automatically adjusted to sales volumes and order history, meaning that the cost of the same product may vary from customer to customer. Such transparent prices lower the chances of errors and thus save the business from unnecessary expenses.
  • Long-term partnerships – Relationships in business-to-business eCommerce are more like partnerships whereas, in B2C, such relationships are more of a traditional “buyer-seller” nature. Therefore, companies in these partnerships do their best to maintain long-term relationships because it is crucial for the success of both parties involved. Companies who make B2B products, services, or software typically can better develop these relationships via eCommerce because of the efficiency factor.
  • Constant growthAccording to statistics from the Statista portal, the sales volume for global B2B eCommerce had been constantly growing since 2013 and reached $7.661 trillion by the end of 2017. A lot of this can be attributed to the speed-to-market for eCommerce models. With some outside help, most companies can get thousands of new products set up in less than a month.
  • More market stability – Compared to other business strategies, the B2B model has a more predictable market and, thus, more stability. Constant growth of B2B can help companies adjust to ever-changing market conditions, strengthen their online presence, and generate more potential clients. Well-made eCommerce sites also don’t have to rely on salespeople to be successful. With an optimized site, you can keep a steady flow of qualified leads.
  • Opportunity to enter international markets – Modern technology such as AI chatbots ensure the 24/7 availability of digital sales channels in B2B. Such availability eliminates the issue of time zone differences and enables a company to sell its products and/or services in almost any country, significantly expanding the target audience of the business.

Drawbacks of business-to-business eCommerce

  • Market limitations – Regardless of the fact that selling to other businesses is easier and more cost efficient, a loss of a big customer can have a negative impact on B2B business. In B2C, on the contrary, such losses have less influence on a business as a whole. This is why it’s important to focus on eCommerce and digital marketing if you’re a B2B eCommerce company. You can widen your sales funnel with a bigger audience than by traditional means.
  • Lack of security – Many businesses may be concerned about exposing their customers’ credit card numbers to possible security breaches, although reputable sites will have stringent security measures in place to prevent this. In addition, some companies do not want their pricing to be visible to the entire world, including their competitors.
  • Complex sales and marketing processes – The typical sales process in B2B eCommerce requires a lot of time and careful analysis because of high costs that are involved in B2B sales. Besides, the business-to-business sales process often depends on the sales representative’s ability to promote the product or service and demonstrate how it can solve the potential customer’s problem. This is difficult to do in any situation, but especially for B2B companies who rely on eCommerce. It makes sense to hire an agency or writer to handle product content services. The quality of content on a site can be the first step to convert a prospective buyer into a sale.
  • Long decision-making process – In B2C, purchasing decisions typically depend on only one person. On the contrary, the business-to-business sales cycle involves multiple people, such as stakeholders and decision-makers, and many interactions via e-mails, phone calls, and other communications. Of course, it takes much more time than with a single, non-business consumer. In some cases, B2B decision-making processes can last for months, resulting in large time gaps between sales. If you optimize your B2B eCommerce site, these gaps aren’t as wide because there will be new leads rolling in constantly.
  • Less control from the seller’s side – In B2B, buyers have more power than sellers. A business-to-business client can ask for specific customizations and negotiate the pricing because it is crucial for the seller to retain their buyers. Therefore, B2B sellers must be flexible, both in product development and production, which is not the case for B2C sellers. For B2B eCommerce sites, this can be an issue as sales can be unpredictable or can fall through because of lack of trust. Some companies make major compromises when making sales, and doing that can affect the overall bottom line.

Now you know the definition of business-to-business eCommerce, as well as the pros and cons of it compared against B2C and more traditional B2B models. One thing that becomes clear is that an optimized B2B eCommerce platform can help you eliminate almost all possible disadvantages of business-to-business eCommerce.

CIMM2 by Unilog is an enterprise software platform that delivers a superior online store experience. Designed specifically for the B2B market, CIMM2 is a flexible, secure, and cost-effective way to compete in the online marketplace. If that sounds like something that can help your business, you can request a demo with Unilog to see how the platform works.

 

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