Published | 7 min read
Key Takeaways
- A B2B (Business-to-Business) platform is an online platform that connects businesses, allowing them to establish relationships and conduct transactions. The B2B model is one of the most popular business models.
- These platforms provide the technology, tools, and services that companies need in order to manage and coordinate their operations with other businesses.
- A B2B platform enables businesses to streamline processes, share data, communicate securely, and collaborate efficiently.
- Companies don't have to go with an established eCommerce platform; they can build their own with the help of developers.
As businesses increasingly move their operations online, many are turning to business-to-business (B2B) eCommerce platforms to streamline their purchasing processes. B2B platforms provide a direct connection between businesses, allowing them to purchase goods and services quickly and easily.
There are many different B2B eCommerce platforms available, each with its own set of features and benefits. When choosing a platform, it's important to consider your business's specific needs and requirements. Some platforms may be more suited for businesses that sell physical products, while others may be better for service-based businesses.
What Is B2B eCommerce?
B2B (business-to-business) eCommerce is a form of online commerce that takes place between businesses rather than between a business and an individual consumer. It involves the purchase and sale of goods or services made through the internet, with transactions taking place directly between business clients via electronic platforms such as websites or mobile applications.
B2B ecommerce is typically used by companies to streamline their purchasing processes and make it faster and easier to purchase products or services from suppliers.
More than 65% of the B2B market has shifted online. With this shift in how people do business, B2B platforms have become increasingly important for streamlining purchases between companies.
These platforms enable businesses to quickly and easily purchase products or services from suppliers. It's important for companies to consider their own specific needs when choosing a platform that's right for them. There are many different B2B commerce platforms available with their own unique features and benefits, so doing research to find the best one is essential.
Types of B2B Companies
When a business sells to a consumer, that's often seen as the end of the eCommerce cycle. The customer uses the product and typically throws it out...whether it's a tube of toothpaste in a month or a refrigerator in twenty years.
It's considerably different in the B2B sphere. Products must first be made from raw materials, then the finished product can be sold via multiple sales channels before finally reaching the customer. Here are the four main types of business-to-business transactions that tend to occur.
Raw Material Manufacturers
Manufacturers of bulk goods from unprocessed materials typically sell their products to other manufacturers or wholesalers in a B2B format. An example of this type of manufacturer is the automotive industry. They make parts that are sold to other manufacturers who assemble and then sell the finished cars up the supply chain.
With the increased digitalization of business, B2B buyers are now looking for more of a B2C buying experience. As the B2B market is expected to reach around $20.9 trillion by 2027, businesses that transact their services online will likely experience a steady rise in both revenue and customer uptake.
Businesses across industries should embrace this trend in order to stay competitive and continue delivering great products and services both online and off.
Wholesale to Other Businesses
Wholesale companies often sell the bulk of their products to retailers at discounted prices. Usually, these businesses are manufacturers or distributors who tend to sell goods in large quantities to other businesses.
An example of a wholesale business could be one that sells raw materials to a manufacturer. Turis is an example of a wholesale B2B platform as it helps companies create ecommerce stores to help facilitate ordering for their retail customers, who typically prefer buying online.
Digital wholesale and B2B ecommerce can essentially mean the same thing as they both involve bulk selling between two businesses through an online platform. As technology evolves and more businesses move towards digitalization, this type of commerce is expected to gain even greater traction in the years ahead.
Distributors to Customer-Facing Sellers
Manufacturers rely heavily on distributors to bring their products to consumers and end-users as well as aid in marketing efforts. By partnering with distributors, manufacturers can increase their revenues, especially in the digital age where reaching wholesalers and customers are made easier through online platforms.
B2B distributors are focused on improving efficiency while cutting down lead time from point of sale to delivery. This helps streamline the process and further boosts productivity while ensuring that customers get the best possible service.
B2C Online Sales
Business-to-consumer (B2C) eCommerce is a form of online commerce that enables businesses to directly interact with customers. B2C eliminates the need for a middleman in transactions between businesses and consumers.
Businesses that participate in B2C retail operate entirely online, typically through eCommerce platforms, apps, and storefronts. This type of model allows wholesalers and manufacturers to serve their customers directly or through a partner business.
How Does B2B Work?
In B2B, one business provides a set of products or services to the other. Usually, a particular group or department will be using the vendor's goods and services. In some cases, an individual buyer might handle transactions that support their company's goals. For more substantial purchases, an entire company might utilize the products (e.g. office furniture, technology, productivity software).
In more complex product selections, a buying committee is established to make a decision. It consists of a business decision-maker (i.e., the person responsible for allocating budget), a technical decision-maker (assessing product capabilities), and influencers (providing input in the choice). Larger purchases are oftentimes preceded by requests for proposals where prospective vendors can submit their offers with details regarding price and terms of service.
Why Is B2B Important?
B2B exchanges are vital in today's economy as they enable firms to acquire the items, components, and services necessary for production. Moreover, B2B allows businesses to share resources and come up with better products at a lower cost, resulting in long-term prosperity and innovation.
B2B relationships create more sustainable collaborations that cultivate customer loyalty and help companies stand out. Furthermore, these deals also improve customer service experiences and all areas of operation such as sales growth and cost reduction, ultimately resulting in improved business results.
Benefits of the B2B Business Model
So, why are more businesses heading online every day? The benefits of B2B are just too good to ignore.
Constant Availability
B2B interactions have revolutionized the way that businesses interact with their customers. With an online B2B platform, customers can access your products 24/7 from anywhere in the world, eliminating cumbersome sales visits and long phone calls.
This type of convenience helps to foster stronger relationships between buyers and suppliers; enabling customers to order quickly, easily, and at their own convenience.
A B2B platform also allows vendors to use their expertise to cater to customer needs better and serve them more efficiently. This results in improved business results across all areas of operation. In sum, B2B platforms are essential for businesses today as they help streamline processes, increase productivity, and create a better experience for customers.
Improve Customer Satisfaction
The modern B2B landscape demands a more personalized approach in order to foster customer loyalty. With the help of B2B platforms, you can deliver tailored experiences to your customers - from first-time buyers to long-term partners.
You could provide them with the necessary knowledge and insights regarding their potential purchases, as well as extra support along every step of their journey. This will ensure that they receive the best products, services, and solutions that align with their preferences; leading to improved customer satisfaction and better business performance.
Streamlined Order Fulfillment
B2B businesses can streamline order fulfillment with the help of online tools like Modern Order Management Systems (OMS). OMS presents itself as an integrated ecosystem used by suppliers, wholesalers, and distributors to automate customer orders from start to completion.
For instance, there are platforms that help brands, wholesalers, and distributors create eCommerce stores for inventory and order management. It offers a range of other supply chain functions within the same system; leading to improved efficiency in managing customer orders and meeting customer satisfaction levels.
Take Advantage of Business Data
Gaining access to a range of customer data-driven business tools through B2B platforms can provide companies with invaluable insights that allow them to make faster and more informed decisions. These tools can include CRM, procurement, ERP, and more, offering real-time visibility into the company's operations.
For example, the CRM section will help analyze the effectiveness of content marketing strategies while the ERP section could uncover areas of wastage and order fulfillment inefficiencies.
With these business tools, businesses are able to identify their competitive advantages within a single platform, making it easier for them to sell professionally and error-free. Also, there is much more B2B platforms have to offer beyond these four fundamental cards.
Challenges of the B2B Business Model
Business-to-business (B2B) eCommerce presents its own unique set of challenges that require specialized knowledge and resources to overcome.
Limited Market
B2C companies can rely on a huge pool of possible customers; Alibaba has over 900 million users on the marketplace software platform.
B2B eCommerce has a much smaller number of possible relationships to make. If you are in an industry that's relatively small, everyone may know everybody, and losing a single customer means you might only have four more in the world to deal with.
Trends and Regulatory Changes
Keeping up with trends and regulatory changes can prove to be a challenge as well. Technology changes rapidly and staying up-to-date is essential for remaining competitive in the B2B marketplace. Similarly, changes in legislation can affect how companies do business; not understanding them can lead to costly mistakes or even legal action against the company if they’re not compliant with regulations.
Secure Payments Across Borders
Ensuring secure payments can be another obstacle for B2B companies. As digital payment technology progresses and evolves, so do cyber security threats such as fraud and data breaches.
Companies must ensure their systems are adequately protected from potential malicious actors as well as adhere to any industry standards for payment processing or risk losing customers or being fined by authorities. Having a solid currency-converting payment hub is a must.
Establishing Effective Pricing
Unlike consumer purchases, there are often multiple stakeholders involved in a single transaction, which makes it difficult to establish an optimal pricing structure that balances profitability with customer satisfaction. On top of this, when dealing with high-volume orders, customers may expect discounts or other incentives which could put further pressure on a company’s bottom line.