B2B eCommerce Guide: Definition, Types and Best Practices

B2B eCommerce Guide: Definition, Types and Best Practices
Learn everything you need to know about B2B eCommerce in this beginner-friendly guide. Understand the different types of B2B models and their benefits.
by Square Nov 10, 2021 — 6 min read
B2B eCommerce Guide: Definition, Types and Best Practices

Whenever goods or services are sold online via the internet, it is known as eCommerce — short for ‘Electronic Commerce’. ECommerce has been growing rapidly since the 1990s, expanding into a wide variety of industries, markets, channels, and devices.

Now that any entrepreneur or business owner can create their own digital eCommerce platform, online retailers have constantly been popping up in digital marketplaces all across the internet. The vast majority of these online stores follow B2C (business-to-consumer) or D2C (direct-to-consumer) models which are targeted towards the general public.

But B2B eCommerce actually accounts for much more overall revenue. In fact, the global total of B2B commerce was worth $10 trillion USD in 2018, which was over five times the total revenue from B2C sales.

So, what exactly is B2B eCommerce?

The main way that B2B differs from B2C and D2C sales is who is purchasing the products or services. This is because rather than a business selling directly to a consumer, both of the parties involved with B2B transactions are businesses.

B2B also typically involves selling high product volumes so businesses can purchase their inventory in bulk. And when these B2B sales between two companies happen via online channels, that’s when they become B2B eCommerce. From there, the business purchasing the goods can then on-sell them to consumers with markup for profit.

Just like any other business, those involved in B2B eCommerce solutions come in a wide variety of different shapes, sizes, and industries. This can be anything from the sale of individual parts to product manufacturers to wholesalers selling complete products to distributors, retailers, resellers, or larger organisations. Like Miele selling commercial stoves directly to cafes and restaurants.

Types of B2B eCommerce models

Each business typically requires a specific B2B eCommerce solution, which may depend on factors like the products they sell, who they sell them to, and their geographic location. For example, selling fresh produce would only be purchased by local businesses, whereas electronic goods could be sold to stores all around the globe. Below are some of the most common types of B2B business models in eCommerce.

1. B2B2B eCommerce

B2B2B or Business-To-Business-To-Business is when additional links are added to the sales chain. Instead of a manufacturer selling a product directly to a retailer, this B2B2B eCommerce solution can involve a manufacturer selling to a wholesaler, who then sells to a retailer. An example of this is when Corona Beer is sold to an Australian distributor which is then purchased by your local pub.

2. B2B2C eCommerce

B2B2C or Business-To-Business-To-Consumer model merges B2B together with B2C, which provides B2B companies with downstream data about the end-user. Like how Intel produces computer chips for use in electronic devices made by Microsoft.

3. D2C eCommerce

D2C or Direct-To-Consumer eCommerce circumvents the B2B model by allowing brands that would traditionally be B2B to sell their products directly to consumers. D2C cuts out the middleman, which gives them greater control and increases their profit margins. Avon would be one example of a D2C company.

4. B2M eCommerce

B2M or Business-To-Many model is when eCommerce businesses continue selling via B2B or other channels in parallel. This allows them to target different markets, which helps amplify their brand, increase reach, and increase sales. Cards Against Humanity is a great example of a D2C company, which started out as purely D2C but is now also B2B.

5. B2E eCommerce

B2E or Business-To-Employee models are used to centralise procurement for employees while developing organisational best practices. B2E eCommerce is like when a Locksmith firm sells lock picks and other tools of the trade directly to their qualified staff members.

What are the benefits of B2B eCommerce?

B2B commerce brands and businesses almost always outperform B2C in every possible metric. Here are some of the other main advantages of B2B eCommerce solutions.

1. Access to analytical data

As sales cycles of B2B marketplaces are typically much longer than B2C environments, success relies on building long-term partnerships with their customers. Thankfully, one key advantage of B2B eCommerce is the ability to collect data and learn from it. So by moving online, B2B brands can utilise the digital frameworks and technologies to leverage analytical data and drive their business decisions.

2. More personalised customer experiences

While better data can help improve things like supply chain management, it also allows B2B businesses to provide more personalised experiences for the businesses they deal with. Offering enhanced marketing and more relevant content will help to create more loyal and long-term wholesale customers who will also be more likely to make higher-volume purchases.

3. Reach new clients

Having an online presence with a digital store often means B2B businesses can find new marketplaces with a totally new audience. So, just by incorporating a platform for eCommerce into their strategy, B2B wholesale and distribution companies can increase their reach which ultimately benefits their bottom line.

4. Increase sales to existing buyers

B2B eCommerce solutions aren’t exclusively about attracting new clients, as existing buyers typically generate the majority of revenue. By using digital channels to promote your online store, you can improve the lifetime value of your existing customers by offering relevant specials and incentives like discounts for increasing bulk orders.

5. Widened scope

Having just a physical warehouse or distribution centre can be very limiting as you may only be able to sell to businesses which are based around your local area. Creating an online store for your B2B business broadens access to inventory which can vastly expand the potential for increased sales and revenue.

B2B eCommerce best practices

Ultimately, all eCommerce websites have the same goal of making as many sales as possible. So not only are B2B companies adopting similar models to those used in the B2C marketplace, but B2B buyer expectations have also started to mimic those of other digital consumers.

With B2C companies like JB HiFi that target the general public, they’ve created an online store that mimics their customers’ in-store experience. By comparison, companies concentrating on B2B commerce can span different industries with different inventory needs and procurement processes.

While B2B companies don’t typically have the same kind of linear pathway to follow as B2C, Square Online can provide you with an entire suite to help you succeed. Otherwise, here are some of the most effective marketing strategies and best practices.

1. Customer experience

Like any online retail business, B2B wholesalers and distributors who provide customers with the best experiences will ultimately be the most successful. And as more and more B2B purchasers seek enhanced experiences with businesses they buy from, those with intuitive website navigation and robust eCommerce capabilities are going to gain more market share and receive the biggest revenue.

2. Client personalisation

To provide stellar customer experiences, it is best practice to go the extra mile and ensure everything is personalised for each client. Not only does that mean accurate customer-specific product promotions based on purchase history and interests, but also reacting to market demand in real-time and then providing appropriate pricing accordingly.

3. Streamlined operations

As most companies expect B2B suppliers to be run as efficiently as they run their own, it is imperative to maximise your operational efficiencies. This means the integration of an intelligent management system to help streamline the logistics, inventory, and finance of your business. If your operations aren’t streamlined, business owners will go elsewhere.

4. Seamless check-out

Just like with B2C companies, cart abandonment is also the biggest loss of potential sales in B2B commerce. This is why it is imperative to provide businesses with the fastest and most painless check-out possible. That way, once they’ve found the products they want and decided on quantities, they can make the payment and get on with their own business.

5. Real-time inventory sync

Incorrect availability of inventory is not only a hassle for your business, but also prospective buyers as well because they’re usually buying in bulk. And there’s nothing worse than notifying a business there’s not enough inventory to fill an order which they already paid for and thought was on the way.

6. Accounting integrations

It’s important to ensure a new sales channel for eCommerce is integrated into all of your company’s back-end systems when it is initially implemented. Then, not only do partial integrations often cause problems like data duplication and other inefficiencies in your back office, but it’ll ultimately cost more time and money to re-enter everything accurately later.

7. Easy payment systems

Make sure to provide businesses with safe and reliable options for payment that can be completed easily with just a few clicks. Square is one company that offers a range of eCommerce tools with payment security features and better risk management. That’s why Square has partnered with many of the top eCommerce providers to provide them with prebuilt solutions for online payments.

8. Automate everything

All aspects of order management from payments and product distribution to billing and receivables should be as automated as possible. By streamlining complex processes for fulfilment and beyond, you can reduce wasted time and unnecessary manual labour so you can provide better and more efficient service to other businesses.

The last word

While B2B eCommerce certainly does present several challenges, it is becoming increasingly essential for all kinds of B2B enterprises to sell their products online. This is because eCommerce provides a great opportunity for wholesalers, distributors, suppliers, and manufacturers to appeal to more potential customers and increase their sales.

Whether you still need to create an online store or you’ve already started making moves in the B2B eCommerce marketplace, your custom platform must work how your company needs. Thankfully, Square Online has everything you need to get your B2B eCommerce business set up quickly, easily, and securely.

The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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