What is business to business e commerce? B2B e-commerce examples
B2B ecommerce has become vital to the global economy. Following the most recent predictions, by 2020, all B2B ecommerce revenue will be around 6.7 trillion USD by 2020. We can see that this prediction can even be an underestimate, taking into the account the rapid market growth which is viewed in the past years and the amount of $5.7 trillion in revenue in 2014.
As we can see in the graph below, we can expect further expansion of the B2B businesses on digital markets, as of 2014, only 22% of American business-to-business companies are currently selling their products and services online.
It is a lot of revenue for almost a quarter of U.S. B2B-businesses. We can understand why the rapid growth is occurring and explain the rush about starting a digital B2B ecommerce business.
In order to understand what business to business e commerce is in reality, imagine a complex network of cross-company transactions and supply chains that stand behind the range of goods in a supermarket. Every purchase is supported by B2B sales.
B2B (business to business) is focused on sales of products, services, or information to other businesses, and stands in contrast to B2C (business to consumer) and B2G (business to government) models. All these marketing principles involve the same basics, but B2B relies mostly on valuable and robust business relationships to guarantee long-term involved customers. Among the success factors of the B2B leaders are effective account management team, good process optimization, and benefits from technological innovations.
A B2B company is essentially a business relationship manufacturer and a wholesaler, or a wholesaler and a retailer. A supply chain usually involves more than two companies. Such goods as plastic, grain, or chemicals don't always have a practical use for consumers but are important for wholesale distribution, which is the base of the business-2-business model. Products and resources may be provided from a number of suppliers; and careful planning is vital to performing-efficient transactions, considering complex integration schemes.
The Internet allows companies to increase their prospect pool. Loud online presence grants access to many more potential consumers and partners than traditional advertising models. According to statistics, over 90% of product researches on B2B level start with search engines. So, the Internet becomes an essential trade channel for B2B e-commerce examples.
A company would make great digital marketing efforts to evolve into a strong brand. There are many articles and training courses dedicated to online promotion and SEO, but all efforts would be in vain, if a prospective partner leaves the page in a few minutes, because the website itself is “inconvenient”. If a visitor is confused from the first minute of being on the website, all other benefits - a company offers may fade from the view.
Business to business in ecommerce is an online business model with flexible enterprise software as a ground solution for purchasing, selling and promoting services, information, or products.
In B2B e-commerce examples, the ecommerce technology can become a critical success factor. The website must represent your business well, be user-friendly, and allow prospective buyers to get the information they've been searching for. This raises a question about the right choice of business to business ecommerce software.
With the advancements in digital technologies and especially the internet, more and more businesses are transferring their services and products into online field. Therefore, the company that is hesitant to invest in the digital expansion is going to be behind any competition. Only with the internet, it has become possible to attract a broader range of customers and to sell products way beyond the business hours of one’s company. If you are a manufacturer or distribution business and you’re not putting money into B2B e-commerce platform, this will result in you – losing revenues and potentially becoming a bankrupt failing to get the customer base. With convenient applications, three-quarters of the B2B customers find it very convenient to purchase a product from the website rather from a sales rep. The majority of the nowadays workforce is represented by millennial generation, which tries to take easy approaches in embracing ecommerce business models and expanding their stores into new broad digital markets.
- Consider the configuration of the products. B2B ecommerce solutions previously could not offer good sales for complex products and services. Now you don’t even have to worry about it as these solutions have expanded their functionality by offering different marketing tools, products filters, and configurations. The first thing you are required to do is to make the strategy with the help of which you will categorize your products. If some of your products are more sophisticated than others, consider hiring a sales representative.
- Consider Customer Buying Behaviors. It is a much better practice to trace customer buying behaviors and their usage of various selling channels. With this crucial information, you can increase your conversion rate as well as optimize your marketing solutions by highlighting prioritized products.
- Buying Phase – Channel Connection. You need to clearly connect each of the buying phases with your available channels. With the direct effort put into this, you can greatly increase your conversion rate. Consider researching about how clients engage in product reviews, how they ask questions, and how orders, renewals and new purchases are treated.
- Do not put away a channel conflict. Clarify the rules with any of the partners you may possibly have. Always ensure that there will be a minimal amount of misunderstanding between your partners by increasing the quality of your products and executing reordering activity with the help of the sales representative quotas.
A B2B e-commerce solution must meet the following requirements:
As the popularity of your website increases and as your business evolves, it can become hard to scale it with minimal effort and to avoid proportional growing of infrastructure management costs. Progressive ideas, new trading partners’ joining, services expansion, integrating your other systems and channels are all good reasons to level up. The optimal business to business e-commerce solution must be equipped with scalable software architecture and a powerful, flexible engine able to conform to ongoing integration. A platform with strong API can be integrated much easier than an outdated solution.
When evaluating ecommerce applications, the flexibility of a solution is important. It will allow you to customize it for the unique needs of your B2B company. A highly integrated B2B solution is involved with many systems and processes. While putting continued emphasis on business evolution, a company should look for modularity of the platform base, which must be focused on fitting your unique business processes, while being configurable for a clean and easy integration at the same time.
An out-of-the-box solution allows you to not start from scratch. But super-structuring templates can only be a temporary solution. An open source ecommerce software gives you the flexibility to design, customize and be truly creative while configuring your B2B website.
The solution should be secure and robust. This factor applies to both inner company security and client data security. Things like personal data protection and PCI compliance are must-have options for ecommerce sellers to safeguard their customers' information. An ecommerce management system must accentuate roles and permissions.
Among other common demands is data hosting.
The difference between cloud-based and on-premise hosting affects many areas of an ecommerce platform, such as maintenance, costs, customization, and security. An on-premise solution means the control is fully yours. But with it comes server maintenance and fixing upcoming issues. Cloud-based hosting provides cost-efficiency and scalability, as well as the secure connection between multiple B2B partners. It's trendy to claim that the future is in the cloud. But the level of control that comes with on-premise hosting can be worth the added responsibilities. It's ultimately up to you to see which solution works better for your company’s security demands.
Information management and promoting product usability are the key components of B2B marketing campaigns. An ecommerce software should provide a promotion service engine with powerful and easy to use tools to optimize your offers and drive conversions, as well as intuitive controls that can be used without in-depth training. Clear ticketing system, simple event and campaign creation, optimized content management and rapid order management are the groundwork for an online store. Stats tracking and reporting allow you to have an insight into the running of your B2B businesses online and to drive specific campaigns. You can’t control what you can’t measure. The monitoring of business metrics must be detailed and easily accessible.
Many B2B ecommerce solutions and platforms share similar practices while providing slightly different sets of features and functions. Before you invest it's always useful to research and examine the specific criteria that are vital to your business to business e-commerce model.
Virto Commerce business to business e commerce solution is built to support complex scenarios. The possibilities that this platform offers to meet the full specter of business requirements to succeed in a competitive market.
EDI (stands for electronic data interchange) is a paperless highly efficient way to send various documents between companies (such as purchase orders and invoices). EDI lets businesses exchange information using a standardized format. It is generally used to help streamline the communication and build efficient workflow between a manufacturer and its supply chain.
In retail industry, EDI helps cut costs while still maintaining a high level of customer service.
EDI is not to be confused with a web store, however. Just like business to consumer and business to business e-commerce platforms, EDI and web stores serve different purposes. EDI is a more efficient way to handle communication between organizations regarding the recurring orders of standard goods, while a web store is more efficient when it comes to incidental purchases that do not need to be fully automated. Web stores are usually better for promoting new products to clients and exploring cross-selling and upselling options.
Integrated e-commerce is a system organization that uses business logic and data from your ERP (and potentially other systems) to increase the performance of your online store.
Integrated web store software dips directly into your ERP system, which helps avoid complex connections and enables it to gather data directly offering a number of important benefits, such as:
• Product catalog, that updates automatically and is always current
• Custom pricing options
• Drastically reduced possibility of human error during order processing
PIM systems enrich ERP product data by categorizing and unifying product data. The result can be used in your business to business in ecommerce in order to make sure your product pages provide complete and comprehensive data.
Product information management (PIM) systems give a huge advantage for B2B ecommerce stores by allowing them to provide more detailed product specifications.
KPIs are meant to give you an idea of how well your B2B online shopping cart platform is performing. Revenue is always a good indicator, but it’s not the only one - there are several KPIs that help ensure you’re on the right path. Below are a few examples:
A high number of returning visitors is a clear sign that your web store is meeting your clients’ demands! This KPI shows how well your B2B online store is performing in regards to customer experience.
What is business to business e-commerce getting out of this one? This KPI will let you compare a customer’ average online order value with their offline spending helping you identify cross-selling and upselling opportunities and evaluate how well the online store is performing.