Top 5 Major Challenges in B2B Wholesale eCommerce
The B2B wholesale industry has recently been driven by disruptive forces pushing B2B wholesalers to explore previously unpaved roads and adopt new, innovative technologies – all to keep their heads above water. What are the most common ecommerce challenges that B2B wholesalers face today? Let’s deep dive into it.
Although a few years back, many B2B wholesale websites looked like they were made in the 90s, things have been changing rather quickly. As more B2B wholesalers catch up with the digital age and shift their businesses to entirely new B2B eсommerce platforms, many face serious challenges on the way.
There are a few things that hinder wholesalers from fully embracing ecommerce: from recent spikes in cybercrime, which deter many businesses from moving sensitive information online, to increasing expectations from customers, who demand that newly established wholesale sites be on par with the B2C industry leaders, such as Amazon or eBay. The industry is, indeed, in danger due to myriad disruptive factors like China tariffs, rising fulfillment costs, and the growing desire of manufacturers and retailers to completely bypass wholesalers and distributors by selling to the end customer directly. Faced with these serious challenges, B2B wholesalers scramble to adopt new technology, and rightly so. The problem, however, is that only a few B2B wholesalers understand how B2B ecommerce software works or have the right tools to do it.
In this article, we’ll look at the 5 major challenges of B2B wholesalers and possible solutions to tackle them.
Definition of B2B Wholesale eCommerce
Wholesale ecommerce is a B2B ecommerce model where businesses sell products in bulk and at a discount to other businesses instead of selling them directly to the end customer. Within the supply chain, B2B wholesalers are intermediaries between manufacturers and distributors or retailers.
Top 5 Challenges of B2B Wholesale Commerce
Challenge 1. Disintermediation
One of the main challenges that B2B wholesalers now face concerns disintermediation, a process which can roughly be described as suppliers trying to bypass distributors and wholesalers and sell directly to the end customer. The benefits for suppliers to pursue such a strategy are plenty – bypassing intermediaries allows them to avoid splitting margins and get access to invaluable customer data, which can be later processed, analyzed, and capitalized on.
While the prospect of losing touch with either manufacturers or customers might seem daunting, all is not lost as technology offers solutions to this seemingly formidable predicament. To maintain their market share, B2B wholesalers need to think outside of the box and offer additional services on their B2B ecommerce platforms that a manufacturer doesn’t provide, such as VMI (Vendor Managed Inventory), which automates elements of distribution on certain reorder points premeditated by retailers, or trade finance solutions.
Challenge 2. Inability To Meet Increasing Customer Expectations
The second challenge comes with the wholesalers’ inability to meet the ever-increasing customer expectations in the likes of B2C shopping, such as omnichannel fulfillment, round-the-clock customer service, real-time inventory, and order tracking. However, as B2B wholesalers digitally mature, they will be able to tackle those challenges by gradually adopting new technology.
According to industry experts, the challenges for going online for many distributors and wholesalers are more internal than external, primarily connected with the inability of an older leadership to catch up with modern technologies. However, it can be easily alleviated with the help of the unprecedented .net ecommerce based Virto Commerce platform.
Many B2B wholesalers also operate in niche markets, where the majority of sales have been generated through long-standing relationships. Thus, many are still content with the status quo where the majority of sales are still conducted by phone or email with attached Excel spreadsheets – the state of affairs which has been significantly undermined during the pandemic.
The technology-driven new entrants, along with the industry leaders like Amazon Business, don’t help things either – the increasing competition prevents some wholesalers from even thinking of joining the game.
Challenge 3. B2B Business Complexities
Another challenge comes with the complex nature of B2B operations. There’s a common misconception among B2B businesses that the complexity of B2B processes cannot be replicated digitally. Such false impressions are especially applicable to the following processes:
- Complex and contractually agreed-on pricing;
- Contract-based catalogs including the sale of exclusive products;
- Varying payment and fulfillment options;
- Other specifically agreed-on individual terms and conditions;
- Complex purchasing scenarios requiring a punch-out solution, requests to pay via purchase orders, or RFQs;
- Internal manager approvals, and so on.
The above are certainly compelling issues, but they can be addressed and resolved with a savvy technology vendor. An innovative B2B ecommerce platform can incorporate different types of business logic and cater to individually customized requirements such as price lists and catalogs, among other things outlined above. All complexities can be overcome, provided there’s the right ecommerce solution in place.
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Challenge 4. Team Skills and Culture
One of the internal challenges that B2B wholesalers face is connected with the lack of the necessary expertise among existing employees and the cultural resistance to change, especially from the sales personnel.
A team that is struggling with its current responsibilities won’t be able to embark on new challenges. The same applies to a team that doesn’t have the right skills for the job or doesn’t understand the goal of a new activity. Therefore, it’s absolutely crucial to ensure the team has the right qualifications, has been briefed on the goals and upcoming changes, and is willing to contribute to the common good. If at any time during the transformation salespeople feel threatened by a new self-service shopping experience, more work should be done to ensure the sales team understands its new responsibilities and doesn’t feel intimidated by the upcoming changes.
Managing change, which is essential for the long-term success of any endeavor, requires a full-time commitment from the leadership team.
Challenge 5. Lack of Strategy
If B2B wholesalers do not adopt a long-term digital strategy, then chances are they will still struggle with ecommerce in the foreseeable future. Although some wholesalers have been using online b2b marketplace for a decade, ecommerce still accounts for only 5% of their overall sales on average, which is certainly not a serious share.
To change the status quo, B2B wholesalers have to shift away from treating their websites as log-in portals to ERP, and proactively (but gradually) engage in the digital transformation of all business processes.
At times like these, ecommerce should become a strategic priority, implicating considerable initial investments in technology.
Solutions to Major B2B Wholesale eCommerce Challenges
No matter the challenges, there will always be solutions. As mentioned above, going digital and embracing technology should be the top business priority for B2B wholesalers. B2B buyers are increasingly demanding omnichannel experiences, inventory and order management, and seamless and efficient fulfillment. By investing in the right technology and adopting an innovative B2B ecommerce platform that can seamlessly integrate with third-party services, extend, and be customized per required business logic, B2B wholesalers can address all B2B buyer concerns.
To avoid being eliminated from the supply chain, B2B wholesalers can provide value-added services such as product expertise, credit financing, or inventory management, and bet on those services to fend off competition and stay relevant to both manufacturers and retailers.