The growth of e-commerce in recent years is unprecedented, and not just for consumers. The business-to-business (B2B) sector is also making its shift online, and it's no surprise given the myriad of benefits it offers to companies. Here's why businesses are changing their purchasing approach and why e-commerce is the perfect channel to boost your B2B.
B2B e-commerce: A Growing Market
Transactions between companies are increasingly happening online. According to a study by Gartner, "Future of Sales", 80% of B2B sales interactions between suppliers and buyers will occur via digital channels by 2025.
The term B2B (Business to Business) pertains to the sale of products and services directly between two companies. When moved online, it represents one of the fastest-growing sales models.
Consider that, according to Statista, by 2025 the value of e-commerce among companies in Europe will exceed $1.8 trillion. This surge is due to digital commerce allowing companies to enhance their sales process efficiency while simultaneously reducing costs.
B2B vs. B2C E-commerce
B2B e-commerce is an online sales channel where transactions take place between businesses. Whether they are wholesalers, resellers, or manufacturers, they share the commonality of having other businesses as their clients and leveraging the potential of online sales portals.
Clearly, the B2B model differs from the more familiar B2C, where companies sell directly to end consumers.
Both these markets reap immense benefits from using online sales portals, but their structures will differ.
While e-commerce platforms for the general public are designed to capture consumer attention by tapping into their emotions, B2B e-commerce sites must account for the rationality of corporate clients. With larger purchase values at stake, they'll weigh decisions based on budgets and business objectives.
On the commercial side, in B2B there's often a network of agents responsible for expanding the client base, supporting existing clients, and collecting orders. Thus, within an online portal, it's essential to integrate a dedicated area for them to manage administrative and credit information.
There are also significant tax-related differences between the two models. For instance, while consumers receive a receipt at the end of a purchase, businesses are issued an invoice.
Another key distinction lies in payment methods: while B2C e-commerce commonly uses credit cards, Paypal, and installment payment forms like buy now pay later, the B2B world is still tied to methods like RiBa, direct debits, and 30/60/90-day bank transfers. However, the tide is turning, and B2B now has its own buy now pay later.
Introducing Opyn Pay Later, the innovative service in this category tailored specifically for the B2B world, designed to help companies wanting to offer their clients a new installment payment option. Discover all the advantages of B2B buy now pay later in this article.
Types of B2B E-commerce
B2B e-commerce can be classified into various types, although they're all geared towards other businesses. Here are the main ones:
- B2B2C: in this type of e-commerce (Business to Business to Consumer), the manufacturer reaches the end consumer via another company, acting as a mediator between the producer and the consumer. In such cases, the consumer may or may not be aware that the company supplying the product differs from the purchasing entity.
- Wholesale: in wholesale, companies buy bulk goods in large quantities and at discounted prices from distributors or manufacturers and then sell them to end consumers at retail prices. This sales form is typical in sectors like construction, retail and food service. Through e-commerce, wholesalers can harness the digital shopping experience, showcasing their product catalogs more conveniently.
- Manufacturers: these entities produce finished goods or components for other suppliers. A manufacturer might produce specific parts in large quantities useful for the entity assembling the final product to be sold to end consumers. Here again, e-commerce presents a tremendous opportunity to showcase specific products to a broader audience.
- Distributors: Working closely with manufacturers, distributors ensure the optimal delivery of products to customers, emphasizing user experience, which is particularly enhanced by e-commerce. Distributors take on marketing and logistics costs and can boost sales and reduce delivery times.
All the Advantages of B2B E-commerce
The benefits B2B companies reap from selling online are manifold. Specifically, by utilizing e-commerce portals, businesses can:
- Automate sales and logistics processes, having all customer and transaction data in one channel, integrating them directly into their management systems.
- Reduce infrastructure costs, especially for spaces dedicated to retail sales, which can be transitioned online at almost zero cost.
- Obtain useful, immediate data on customer behaviors during purchases. This information can be analyzed and leveraged for more targeted business and marketing decisions.
- Expand their client base by showcasing and making their products/services available on a larger scale.
- Boost sales among existing clients through cross-selling and up-selling, more easily activated online.
- Provide a superior customer experience and retain clients who can comfortably browse through offerings and make purchases in one click.
E-commerce platforms clearly represent a growth opportunity not just for B2C but also for all businesses catering to other companies, especially if established following a solid action plan and built to enhance user experience.
Want to offer an additional service to your online and offline B2B clients, allowing them to pay for their purchases in installments? Discover Opyn Pay Later.