What is B2B eCommerce meaning?
Today’s world is the world of technology. This means that all transactions can be processed from a distance. You may have heard a lot of B2C eCommerce, which is also the most popular business nowadays.
However, B2B eCommerce is also a trend nowadays. For this reason, this blog will provide all information from A to Z about B2B eCommerce to answer the big question: What is B2B eCommerce?
Let’s get started!
What Is B2B Ecommerce meaning?
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What is B2B eCommerce? B2B e-commerce meaning involves all online transactions between businesses. For example, a company that sells its products to customers which are also companies through a website or a digital sales platform would be a party of B2B eCommerce.
As we can see, B2B e-commerce definition is different from that of B2C, where a company sells its products to individual customers mainly for consumption purposes.
B2B vs B2C Ecommerce
B2B vs B2C eCommerce are quite different from each other, even though both are built on a digital basis and operate customer-centric processes.
In this section, we will clarify all differences in various categories between the 2 business models to help you get a better understanding of B2B eCommerce meaning.
|Definition||Business to business||Business to customer|
|Customers||Organizations, corporations||Individual person|
|Relationship with customers||
|Products & Prices||Customized||Standardized|
|Buying & selling cycle||Lengthy||Short|
|Creation of brand value||Based on relationships with customers||Advertising & Promotion|
Type of Customers
As we have mentioned in the definition section, B2B customers are organizations and corporations. They usually buy products from suppliers for various purposes, for example, use in manufacture, sell back to consumers, etc.
Meanwhile, B2C customers are individuals that buy products usually for consumption purposes.
Relationship with Customers
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B2B customers are businesses; hence, business deals usually are not one-time transactions. B2B businesses always aim to get repeat purchases as much as possible. For this reason, the relationship between B2B businesses and customers is usually long-term.
This is also a formal and win-win relationship as businesses not only sell products for their customers but also help each other succeed and generate more profit. Accordingly, relationships with each customer for B2B businesses are essential.
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Payment in B2B transactions is much more complicated than B2C transactions. In B2C, customers may pay by multiple payment options like cash, credit card, e-wallet, etc., and wait for the products to arrive.
However, payment in B2B transactions is different. Payment terms and invoicing for each deal are different from each other. It is based on each contract, order size, the number of orders over time. Moreover, B2B payment will not be processed immediately. It will take time, usually around 30 to 45 days, to be completed. This will be stated clearly in the contract.
Products & Prices
In terms of the B2C business model, customers can come to the store website, pick one or several items in their favor, and purchase promptly. On the other hand, personalized products and prices are a must-have for B2B businesses.
Before making a decision, B2B customers will want to customize products based on their demand, use of those products in their businesses. Before, products for each customer are usually not the same. Prices are also different. They will expect specific price discounts for their company.
B2C customers may make a decision right at the moment they see the item on the website. That decision may be emotional, deciding through how beautiful the image is.
With B2B customers, it’s not like that. Every decision will be made after carefully considering all other factors such as cost and benefits they will gain after using the products. Also, there are many people involved in the decision-making process to come to the most effective conclusion.
Buying & Selling Cycle
Unlike B2C, B2B sales cycles are much longer. We have mentioned that B2B customers need to plan before making a purchasing decision carefully. During that time, B2B suppliers also need to persuade them to buy their products. That makes the cycle much longer.
On the contrary, the B2C sales cycle is short. B2C customers may make a buying decision at the very first touchpoint.
Creation of Brand Value
B2C businesses will advertise and promote their brands widely to attract as many customers as possible. Although B2B businesses also do the same way to attract customers, but not as widely as B2C.
B2B businesses focus much on relationships with their current customers to create brand value. Therefore, most of their promotional activities will be based on trust and direct relationships with their partners, and they will gain more orders from their customers accordingly.
B2B Ecommerce Growth
Today, the B2C business model is still the most popular. However, B2B eCommerce has seen significant growth in recent years. Besides, the B2B ecommerce market is predicted to develop considerably in the future. This fact is proved by these numbers below:
- The global B2B digital commerce is estimated 6 times larger than the B2C market in terms of value. (Statista)
- The U.S B2B eCommerce market is projected to reach $1.8 trillion, accounting for 17% of all B2B sales in 2023. (Forrester)
- A compound annual growth rate (CAGR) is forecasted to reach 10% in the next five years. (Forrester).
Moreover, we can also see a transition from traditional B2B to digital B2B commerce. Some research has found out that:
- 74% of B2B customers purchase after researching online.
- 91% of B2B buyers use mobile devices (smartphones, tablets, etc.) to search for the target item, and 25% use these devices to make transactions.
- Gen X and Gen Y are the top users of B2B eCommerce. 46% of B2B researchers are from 18 to 34 years old, who have a good understanding of technology and eCommerce.
This information will prove the B2B eCommerce growth, encouraging all traditional B2B businesses to set up online stores.
Benefits of B2B E-commerce
So, you have seen the growth of B2B eCommerce. The question is, what are its benefits. How will eCommerce help your B2B business? There are several benefits of B2B e-commerce, encouraging you to turn your B2B business into an online store.
Moving to a digital site means that you can reduce the cost of the physical store, specifically labor cost. Using a good digital platform helps you to process works automatically. Therefore, you can invest less money in physical locations and staff. Instead, you can focus on building an optimal website to create the best customer experience in an extended period.
Enhance Brand Awareness
More and more customers go online at present. As a result, more customers can search for your online store. Combining advertising and promotional activities, you can quickly improve your brand awareness.
Drive More Sales
Going online helps you get more customers. This also means that you will have more chances to drive more sales and generate more profits. Of course, increasing sales also depend on other factors (the ability of a salesperson, for example), but moving to an online basis will somehow help you in this perspective.
Manage Suppliers & Customers More Effectively
A digital system will act as your assistant to help you with all management works, specifically, suppliers and customer management.
Each client will have a custom-made portal that includes personal information, purchasing history, shipping, and tracking data updated in real-time so that you can take control of the whole sales process and solve problems timely if anything happens.
Also, you can manage suppliers more effectively as you can view the inventory status and the orders’ progress.
Previously, you have to evaluate your business effectiveness manually, which is relatively time-consuming. If you build your website on a good platform, the system will do it for you. You will have detailed analytics over a chosen period without doing anything.
And in this way, you can save more time thinking of some adjustments for the next period based on the already-made reports.
B2C-like Purchasing Experience Creation
In terms of the storefront, B2B sites are quite similar to B2C. They all have high-quality images, portals for each customer, a simple checkout process, multiple payment options, etc.
This benefit creates opportunities for many eCommerce platforms such as Magento, Shopify, WooCommerce, and many more add more B2B functionalities to their platforms so that you can utilize these features to create the best experience for your customers.
Types of B2B E-commerce
Although the B2B Ecommerce meaning specifies transactions between business and business, it even contains more. In total, there are 6 types of B2B e-commerce as below:
B2B2B Ecommerce (Business to Business to Business)
B2B2B business model means adding a part to the B2B chain. When a business sells products to a customer (a manufacturer or a wholesaler, for example), then that customer will sell it back to another company.
B2B2C Ecommerce (Business to Business to Consumer)
B2B2C business model is a combination of B2B and B2C, where the second “B” acts as the intermediary between the first “B” and “C”. The second business is usually a marketplace that doesn’t own any product but sells the supplier’s products to end-customers. Hence, the B2B ecommerce meaning now covers the larger scope, bringing benefits to consumers also.
There are many popular B2B2C eCommerce businesses worldwide. Some specific examples are Amazon, Taobao, Alibaba, etc.
D2C Ecommerce (Direct to Consumer)
The D2C model enables B2B businesses to sell their products directly to consumers, bypassing the B2B model. You may wonder what the difference between this model and the traditional B2C model is.
The most apparent difference is that the D2C model means that a manufacturer makes direct transactions with end-customers. Meanwhile, a B2C business is a retailer stand between the manufacturer and consumers.
The D2C eCommerce helps B2B businesses get a larger market share, improve brand awareness and engagement among consumers, but still maintain their B2B channels simultaneously.
B2M Ecommerce (Business to Many)
“Many” here means many channels. Therefore, B2M eCommerce allows B2B businesses to sell their products through various online channels. This is beneficial for enterprises that they can expand their target customers, enhance awareness, and gain more sales.
B2E Ecommerce (Business to Employee)
B2E model is an approach in which the centralization of businesses is their employees, not customers. Because of the continuous lack of IT staff, the B2E model was born to attract and retain well-qualified staff in fierce competition.
B2E eCommerce is another name of B2E portal, which is an internal website within an organization. This B2E portal creates a convenient environment for employees to find everything they want for their works, including related information, benefits like learning opportunities, the supply of facilities, flexible hours, bonuses, and similar things.
B2G Ecommerce (Business to Government)
B2G businesses are companies that sell their products, services, or information to the government or governmental agencies. And in terms of B2G eCommerce, businesses and governments can use the central Web to conduct transactions more efficiently.
B2G model is usually a form of bidding, where the government puts out tenders which companies bid for. And the government will choose one of the bidders who has the best price to sign the B2G contract.
B2B Ecommerce Trends in 2021 & Beyond
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2020 is about to end. It’s time for you to prepare for the year to come, 2021. This section will provide some B2B eCommerce trends expected to appear the next year.
About this content, we have already delivered a more detailed article. You can click on the link above to find out more.
The Development of Some Old Trends
In 2019 and 2020, many notable trends appeared. And the next year is expected to see the strong growth of these trends. Such trends are:
- Omnichannel eCommerce strategy: This is a must for any B2B business nowadays. Developing multiple sales channels will help to increase touchpoints that can attract more customers. And if you refuse to do that, you may lose in the competition.
- B2B voice commerce: Iphone’s Siri or Google’s AI are specific examples of voice commerce. It is becoming more and more popular nowadays. Taking its first step in 2020, 2021 will witness a significant growth of voice commerce for sure.
- Online marketplaces: Recently, B2B buyers have identified online marketplaces as their preferred channel. Therefore, more and more businesses start to offer products and services on third-party platforms.
Augmented & Virtually Reality (AR & VR) Application
AR and VR applications have been applied in the past few years. Especially in 2020, due to the Covid-19 pandemic when customers cannot go to brick-and-mortar stores to experience samples, AR and VR have developed considerably.
The application is extremely beneficial as it enables customers to try and experience products beforehand. And that’s the key point to solve the problem of eCommerce, especially B2B eCommerce as customers want to be sure when ordering in bulk.
Although it has grown in the past years, it is not so familiar among businesses. But in 2021 and beyond, AR and VR are projected to drive a major profit of nearly $60 billion for B2B businesses.
That’s all we want to provide about B2B eCommerce meaning. We hope that this information will help you understand deeply about B2B, specifically B2B eCommerce that you can confidently answer when being asked: “What Is B2B eCommerce Meaning?”
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