5 Things to Know about B2B eCommerce

By | 2016/12/24

B2B eCommerce

rise of b2b

From: www.handshake.com/blog

Business-to-business online ordering is poised for significant growth. According to Forrester “the US B2B eCommerce market is worth approximately $829 billion today, and we expect it to reach $1.2 trillion over the next five years”.

I’ve implemented many types of B2B ordering systems over the past 15 years. Some were cloud platforms. Some were eCommerce sites customized to add B2B rules. Still others were 100% customized web applications.

When I worked for a wholesale distributor, our B2B ordering website (by Handshake) provided a fast and easy way for our convenience store customers to place restock orders for their retail stores. With this system, the branding matched the wholesale distributor. It also included some vendor-specific marketing when we wanted to highlight certain specials or push overstock items. The most important objectives were finding products quickly and placing orders quickly — speed-related features.

Now that I’m back in the order fulfillment industry, our B2B ordering system needs to meet slightly different demands. For some clients, our generic web portal is perfect for allowing employees and business partners to place orders for products in our warehouse. But other clients require specific branding based on the user’s division or the business partner’s role. The variation is what makes a “one size fits all” B2B eCommerce site difficult.

Here are five features typically required in B2B ordering platforms.

Pre-Authorized Users

With standard B2C eCommerce, we typically drive as much traffic as possible to the site. The goal is to sell — to anyone who will buy. While each eCommerce site has its own target audience, most will accept any and all orders.

In contrast, B2B is not always open to everyone. This means the site may not allow ordering until the user has authenticated — typically through a logon process.

The best B2B sites have automation built into the logon request process. This automation provides fast access to those who need it, while also protecting the web site from abuse by those who shouldn’t be there. The first step in the process may be “click here to request access”, followed by an approval process.

Budgets, Limits, Approvals – oh my!

Restrictions ApplyAnother difference between B2B and consumer eCommerce is the concept of limits. In B2C eCommerce, sites will gladly accept orders for whatever quantity is available to sell. If I have 5 guitars to sell and a single person wants all 5, I am happy to sell that person all 5– as long as he or she has the funds to pay.

However, B2B eCommerce often adds the element of limits to avoid having any one user obtain all of a particular product. Product samples ordered by sales reps are a good example. Without some sort of budget by user or territory, the company risks one sales rep grabbing all of a given sample.

To avoid this problem, B2B sites often include limits by user or territory. If any user prompts an over-limit event, the order is placed on hold for further approval.

Product line rules

When I go to an eCommerce site and look for products, it’s likely that I’ll see everything the company has to offer. The site may select initial items for me based on my past viewing or search history, but the site isn’t likely to exclude items from my view.

Product viewing is handled very differently in B2B sites. Typically, the user of a B2B site can only see products specifically allowed. Why would this be? Consider a B2B site used by sales reps of a pharmaceutical, chemical , biotech, or nutraceutical company. Each sales rep knows how to sell certain product lines.  In this case, the sales rep is only allowed to order products that fall within their specific product lines. They shouldn’t even see the other products.

Another example comes from wholesale distribution. Suppose the retailer using the B2B eCommerce site is a chain. The chain may have negotiated purchasing agreements with several different suppliers. In this case, individual stores may not be allowed to buy certain types of products from the wholesaler’s eCommerce site.

I’ve seen many variations on this theme. It’s been a requirement of all my past B2B eCommerce projects.

Online strategy

What’s the purpose of the web site? Why does the site exist? The answer to these questions will drive the strategy.

For consumer eCommerce web sites, the purpose is primarily to sell products. For B2B wholesale distributors, the purpose may be the same – to sell products. The strategy for this type of site is centered around getting customers to the site, and fast/easy ordering.

In contrast, a B2B site that provides sales/marketing products to a company’s sales staff may have product education as its purpose.  Other types of B2B may offer brand support. Years ago I worked on a custom web site that provided  authorized stores with the ability to order signage, point-of-sale merchandise, and accessories in support of a large international brand. Another example is ordering products for tradeshows and events.

Understanding the ultimate goal of the eCommerce site will help establish the online strategy. The strategy helps define how the web site works and what features should be included.

Complex Pricing and Varying Payment Terms

B2B eCommerce pricing is often more complex than B2C. Here are examples:

  • Quantity price breaks – this one is fairly self-explanatory: pay less if you order more.Pricing Questions
  • Customer group pricing – to apply pricing to types of customers. In this example, the company defines the pricing strategy for customers within each group.
  • Customized pricing for each customer – I’ve seen this in both wholesale and order fulfillment companies. With this model, every customer/product combination may have its own unique pricing.
  • Breakdown by division or brand – with this approach each division or brand is invoiced separately.
  • Promotional pricing – similar to the promos we see in B2C, including BOGO, percent or $ off, free shipping over $x, coupons and discount codes, rebates, associated products.
  • Payment terms in B2B can be anything: cash/ACH up front, credit card, billing terms — even bartering.

Bottom line: B2B eCommerce is a hot topic and companies who do it right will have a huge competitive advantage. I’m excited to see how this trend develops over the next few years!

 

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