B2B E-Commerce

What is B2B E-Commerce?

B2B E-Commerce, or Business to Business Electronic Commerce, encompasses the online – through an online sales portal – sale of products and services between companies. This is as opposed to B2C (Business to Consumer), which describes the online business transacted between a business and individual customers (not a business entity).

Where B2C E-Commerce transactions are relatively simple, B2B transactions are much more complex. In B2C, prices are generally fixed, shipping is straightforward, and quantities are low. In contrast, B2B transactions prices are highly variable, relying on a number of pricing variables throughout. 

Because business are much larger entities (than individual consumers), the volume of products and services are much higher – and have much more complicated shipping requirements. In addition, B2B E Commerce markets generally have to deal with much more complex tax and regulatory impediments. 

The complexity of the B2B E-Commerce market makes the solution requirements and implementation processes very demanding.

Why is B2B E-Commerce Software Important?

Companies not investing in digital channels today are rapidly falling behind their competition. Without a move into digital commerce, companies will lose customers, struggle to compete, and see their margins shrink. Failing to invest in a B2B E-Commerce platform can end up being a costly mistake, and potentially have your business losing out on millions of dollars in revenue.

Today, businesses are seeing their customers purchase more online than any other channel. Based off of Forrester Research’s iconic paper The Death of a B2B Salesman, 74% of B2B buyers indicate that buying from a website is more convenient than buying from a sales representative, and 93% prefer to buy online when they have already decided what to buy. This is only set to increase as the millennial generation, one that has whole heartedly embraced the E-Commerce business model, takes over the workforce.

Again according to Forrester, B2B E-Commerce is expected to become a $1.1 Trillion industry by 2020. If you don’t think this will affect your business, you are wrong.

3 Categories of B2B E-Commerce

1. Volume Products

E-Commerce solutions around volume products focus on making the ordering process easier. The products represented here are simpler, lower priced items that are often ordered in large quantities. These products are common in CPG, apparel, hardware and automotive supply businesses.

For this model of E-Commerce, the value is in enabling customers to place orders in the fewest amount of clicks.

2. Subscription Products

With the growth of the digital age and SaaS, more and more products are offered as a service, and are therefore purchased on a reoccurring basis. Purchasing plans can vary, but it is most common to see the plans set up in a monthly or yearly reoccurring bases – for the tenure of the contract.

Instead of purchasing and checking out their products, in this model customers sign up for a service. As a result, E-Commerce solutions must support a unique purchase flow and process.

3. Configuration Products

Examples of these are numerous, but can include networking products, manufacturing equipment, medical devices, or telecommunications solutions. These solutions may be dependent on other offering, and as a result need be bundled together with other products.

In this instance, because the offerings are generally of such a high price, customers usually want to get a quote before purchasing.

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These information based on research paper presented by me at calington university 

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