The 3 strategies for using a B2B ecommerce
Learn the most popular ways to use a B2B ecommerce and see what benefits they bring.
What are the 3 most common strategies for using B2B ecommerce?
Where did I get my knowledge about the B2B industry?
What is a B2B ecommerce?
Characteristic functionalities of the B2B ecommerce
Generating leads for newbiz
What kind of companies are implementing B2B ecommerces at their sites?
The 3 most common strategies for using B2B ecommerces
Summary – The 3 strategies for using B2B ecommerces
The three most common strategies are:
If you are interested in further elaboration on this topic, I invite you to read on.
How do I know what the 3 most common strategies (reasons) why to implement B2B ecommerce? I base this on interviews with ecommerce and sales directors at the B2B companies I analyze.
In addition, I conduct direct interviews with ecommerce directors and sales directors in B2B companies. The 3 most common strategies for using B2B ecommerces emerge from these sources. So, it’s good to say that we rely on qualitative data.
To begin with, let me just clarify what I mean by B2B ecommerce. Recently, at a meeting, the CEO of one of the manufacturing companies asked me what exactly is this B2B ecommerce that we plan to implement in his company. I realized that not everyone is necessarily familiar with the ecommerce market and the differences between an online shop and a B2B ecommerce, so it would be useful to touch on this topic quickly.
To me, a B2B ecommerce is a business-to-business online shop where business-to-business sales take place.
It is not a store for individual customers but a place where one business buys from another through this specialized online shop, which we call a B2B ecommerce.
This B2B ecommerce has several distinctive functionalities.
Such ecommerces mean that you usually do not have access to the full offer and functionality of that ecommerce until you register and log in.
In practice, if you’re a casual Internet user, you won’t be able to check the availability of all products and their final prices.
That is, you will be able to see what product a company sells, but to see exactly what its availability is and how much it costs, you must first register. This is a typical scenario, although it is not a prerequisite.
The second feature of B2B ecommerces is that they reflect each customer’s individual offer.
All discounts, manufacturer-specific discounts, special prices, loyalty programs, special prices of the week, and package promotions are transferred to the B2B ecommerce.
The B2B ecommerce customer should have identical terms and conditions as if they were buying from a sales rep. This is extremely important but also difficult to achieve.
Business terms in B2B sales can be complicated. Many factors, such as a special discount, a marketing invoice, a special price, a standard discount, or package promotions, influence one price. These must be reflected in the product price and the offer a customer will see on the B2B ecommerce.
In the case of B2B ecommerces, onboarding on the ecommerce, is most often done by a sales rep. It’s not like you sign up for a B2B ecommerce and immediately see your offer.
Typically, if you are interested in registering on a B2B ecommerce, the process will be that you register as a user. The information you registered on the B2B ecommerce is sent to the sales department. This information is then forwarded to a specific sales rep, who will talk to the new user, determine what kind of orders you are interested in, and offer individual pricing.
In this way, B2B ecommerce owners avoid giving a standard price list that will not be competitive. Usually, the first sales conversation is conducted by a salesman to establish sensible business terms.
By the way, we touched on another vital topic for B2B ecommerce, namely lead generation.
Leads are defined as people who are interested in your company’s offerings.
A B2B ecommerce may have a mechanism where no pricing or availability information is available on the product card. Still, there button says if you are interested in this product, contact us, and we will present you with a customized offer.
You can also create a landing page that describes your company and includes a short video with a sales representative describing the cooperation. It encourages your potential clients to leave contact information so the salesperson can later contact the potential customer and introduce them to the B2B ecommerce.
B2B ecommerce is more complicated than an online shop, where you can place orders as a guest. It usually doesn’t have as many discounts or loyalty programs.
Selling in B2C is simpler, while in B2B, it is more complicated, which makes B2B ecommerces more complex.
In a nutshell, a B2B ecommerce is a complex online shop created for companies to place orders.
Currently, many companies plan to implement a B2B ecommerce, which can be divided into two categories.
The first group is wholesalers that offer products from various manufacturers and create a typical ecommerce for selling. They moved some of the sales reps’ functions to the Internet.
The second group is companies that are manufacturers. These are not companies that offer many different products. These manufacturers often have several thousand different SKUs and sell their products through sales representatives. The goal of these companies is to streamline the process.
In summary, we have two categories: manufacturers and wholesalers that are multibrand.
In this article, I will describe three strategies that these companies use.
The first strategy is to create a B2B ecommerce to increase the efficiency of the sales department and customer service.
This is fairly simple to explain. The sales department needs to generate ROI. On the one hand, we have the costs of the sales department, consisting of a dozen or several hundred salespeople. On the other hand, we have the profit they generate. Of course, the costs of the sales department are not only the salaries of the salespeople but also tools, cars, phones, and that kind of stuff.
Imagine that a company’s Board of Directors or sales director wants to improve the ROI of the sales department.
For this purpose, a B2B ecommerce can come in handy. With it, it is possible to generate much more revenue and profit without increasing employment.
When talking to sales reps, implementing a B2B ecommerce to reduce the sales department rarely comes up. They usually point out that hiring an additional salesman is expensive. The increase in the price of cars, fuel, and salaries for salespeople makes it worthwhile to invest in a tool that will increase the efficiency of existing employees instead of increasing employment. It doesn’t make sense for a salesman to waste time on the role of order collector and administrative work.
But why should our salesman’s precious time be spent on such tasks? It would be better for the customer to process the orders himself on the B2B ecommerce, allowing the salesman to focus on other tasks.
Another aspect is that B2B ecommerces usually lead to an increase in so-called “shopping cart depth.” The sales rep should know what additional to offer customers, what their needs are, and how to increase the value of the sale. However, it turns out that a B2B ecommerce often does this better. Customer access to our entire offer on the B2B ecommerce makes ordering easier and increases cart size.
A B2B ecommerce eliminates the need for a sales representative to perform simple actions while increasing the value of shopping carts. With B2B ecommerce, the customer can handle many things on his own, which allows our sales representative to reduce the frequency of visits. This translates into savings – less money for fuel, less time spent on the car, and less on unproductive activities.
Customers stop calling for simple things if we have a well-structured B2B ecommerce. They don’t need to ask about invoices, documents, or late payments. All this information can be included in the B2B ecommerce, eliminating the need to handle simple tasks that generate a lot of time.
Finally, using a B2B ecommerce reduces the amount of manual quoting and the risk of mistakes. The fewer mistakes we make, the less time we waste fixing them later.
Consider the impact of a B2B ecommerce on a company that uses this sales model. We note that it significantly increases the efficiency of the sales department. We are not talking about a 10% increase, but often a doubling of efficiency.
When we add up all the small changes, we find that our sales team, instead of dealing with collecting orders, handling complaints, or sending out documents, can focus on new biz and taking care of the development of current clients. This greatly improves the ROI of the sales department.
The second strategy is to expand into new geographic markets or address a different segment. B2B companies often rely on salespeople, and entering a new market involves two main problems: distance and language barriers (in the case of geographic). Trying to sell to a more mass market (smaller customers) with an existing sales force, in turn, often proves unprofitable.
Let’s take a closer look at entering a new geographic market.
For example, if we are in Denmark and want to sell in Italy, we need to decide whether we need an on-site salesman or whether our salesman should travel there regularly. In addition, our salesman from Denmark may not speak Italian..
However, we can get around these problems by setting up a B2B ecommerce with a good lead generation system and hiring a customer service representative who speaks the language.
We need to plan the customer onboarding process well so that it does not require a salesperson. Is this possible? Definitely yes. It allows us to open many new geographic markets without hiring local salespeople. Is this easy to do? No, but it is possible.
This is another strategy that B2B companies use to monetize their B2B ecommerce. Sometimes, the limitation is not language issues but the cost of entering a particular market.
For example, we would have to hire a local salesman, which involves a lot of risk, or serve them from Denmark, which involves regular travel. Travel is expensive, taking into account both time and travel costs.
However, if we decide to serve local customers through a B2B ecommerce, this solution is effective, needing only a person operating in the language. This eliminates the problem of distance with the B2B ecommerce.
The third and most innovative strategy has begun to attract our attention in the last 12 months. Imagine that the customers of a B2B company, for example, are large factories.
These companies have a restriction that they can only place orders using their purchasing system: SAP Ariba. That’s company policy. There’s no arguing with it.
In short, the buyers want to use Ariba’s own SAP and access the supplier’s entire product catalog through it. As a result, orders placed through SAP Ariba should automatically land in the supplier’s ERP.
For example, if you are a company using NetSuite, the customer asks you to build a system where he can access your offerings in his SAP Ariba. When he places an order in his SAP Ariba, it is supposed to somehow land in your NetSuite.
It’s worth remembering that if a company has to use its procurement system, it’s usually a very large customer. Your ability to negotiate as a supplier is often limited. You can’t always tell the customer: “We won’t implement it for you; use our salesman, and he will arrange everything.”
This is when B2B ecommerce is useful.
B2B ecommerces are often used as a connector, which on one side is connected to SAP Ariba, and on the other side to the ERP, B2B provider. Brilliant and not that difficult to implement.
The result is that your customer, for example, a large factory, can use its procurement system to place orders. Once the order is placed, it lands in a B2B ecommerce, such as one based on Magento, and then that B2B ecommerce is integrated with NetSuite, which means that the order also lands in NetSuite.
In this article, I described the three most common strategies for using B2B ecommerces. We are in the fall of 2023, so these strategies will change in two years.
Currently, analyzing interviews with e-commerce, sales, and B2B CEOs, as well as from our direct conversations, three dominant strategies are used most often in the context of using B2B ecommerce.
1. The first strategy is to increase the efficiency of the sales department and customer service via B2B ecommerce.
2. The second strategy is to enter new markets, not just geographically, but new markets in general (for example, a new segment of companies not previously addressed), using a B2B ecommerce.
3. The third strategy is to use the B2B ecommerce to integrate the customer’s procurement system with your ERP system.
I hope you find this information useful, especially if you are considering using a B2B ecommerce. Learning about the different strategies for using this ecommerce can be a good starting point for thinking about how else you can use and monetize it in your business.
If you are considering B2B ecommerce implementation, contact us. We will prepare a solid estimate for you and present our plan of action so that the final implementation budget will be as close as possible to the original estimate.
