Selling products and services to businesses can be highly lucrative. So why not do it online?
B2B Ecommerce is growing very rapidly. However, I’ve found that many businesses haven’t fully considered what it would look like to take their sales process online. This guide will give you the what, why and how of B2B ecommerce.
What is B2B Ecommerce?
B2B Ecommerce is the marriage of the following two concepts.
B2B is an acronym that stands for Business to Business. Generally speaking this refers to the process of one business selling goods or services to another business. The customer in this case is not an individual or a consumer. The customer instead is another organization.
Selling to businesses represents a large opportunity financially but it also has unique complexities. Imagine that you’re a retailer that sells lamps. You started by building lamps in your garage. You sold on Etsy and Amazon before starting your own ecommerce website. Today you’re selling $1M each year online and you’ve expanded to a small manufacturing facility.
One day you get a call. A retail store in another state has found your lamps and would like to purchase 5,000 of them. You do the math and quickly realize this single sale could surpass all of your orders for the past year.
As the conversation continues you start to get a little worried. They want to resell your lamps in their store which means they’re expecting a wholesale price on the lamps. They expect to pay on terms so you won’t get full payment before fulfillment. Lastly, they want all 5,000 to be sent in a single shipment. None of your current shipping methods will work.
This single sale to another business forces you to completely redefine your business. Pricing is different. Payment is different. Shipping is different. Those complexities multiply as you add additional customers, products, price tiers and shipping methods.
Ecommerce is a catch-all term that refers to all commerce that happens electronically. More specifically today it refers to website and marketplace transactions where the bulk of the sales process happens online. If you’re interested in learning more here’s a short article about the History of Ecommerce.
Most ecommerce platforms and marketplaces are focused on B2C (business to consumer) transactions. Businesses are able to buy online but not in the way that they’ve been able to with a more traditional sales process.
Why Does B2B Ecommerce Matter?
B2B Ecommerce matters in today’s economy because business buyers are expecting a highly-personalized and seamless buying experience online. They don’t want to request a quote, wait for a sales rep to call them, fax order forms, signatures, etc. Instead they expect to visit a website, order the products they need, get the prices they expect, pay with the methods they expect and select the shipping options that they expect.
It matters because of buyer expectation.
Large companies that have historically valuable brands are always a few years away from going the way of the dinosaur. Businesses that have “sales reps” that are simply processing orders are going to lose because of the massive inefficiencies in their business. Lean companies that leverage the power of modern technology will continue to gain an edge on these businesses.
How Can We Implement B2B Ecommerce In Our Company?
You could try to implement B2B Ecommerce in your business today. However, I’d highly recommend taking a calculated and well planned approach.
Planning has a variety of components but for simplicity’s sake I’ll break it down into four pieces.
Learn as much as you can about B2B ecommerce. Read blogs, watch videos, go to trade shows. Wrap your head around some of the key concepts and start thinking about how they could contextually apply to your business.
Once you have a good understanding of your key objectives you’ll want to start discussing them internally in your organization. You need buy in from a variety of stakeholders to be successful. An independent or isolated project is destined to fail because a successful implementation will likely affect every aspect of your business.
As internal discussions progress you need to come to an agreement on the right type of solution.
- On premise or cloud?
- Open source or SaaS?
- Agency or internal team?
You should also try to get a budget approved or at least start looping your finance team into the process at this point. This endeavor will cost some money up front for implementation and you’ll be committed to monthly fees for licensing (SaaS) or maintenance (open source).
Once you’ve put together an initial plan you’re ready to start shopping. Shopping can be a very straightforward process if you have simple requirements. It may be a much more complex process if you’ve put together a formal Request for Proposal with hundreds of requirements that vendors will need to review.
Here are some important questions to ask.
- Can this vendor handle our requirements?
- Do we understand the technology?
- How is the software supported?
- What kind of cost will be involved?
The most important aspect of shopping for a vendor is picking a vendor that your team collectively agrees to work with. This new website and infrastructure will be the foundation of your business for at least the next few years. Don’t buy something that everyone hates.
Implementation could take anywhere from 6 to 18 months depending on the unique complexities of your project. Keep your team on track internally. Return deliverables on time. Have regular progress update meetings with your project manager.
Keep in mind that there are many components to having a fully integrated ecommerce solution. The client facing portion of the website may be done in a few months but then you need to train your staff, train your customers and ensure that the system is working properly with your other business processes.
Iterate and Improve
After you’ve launched you’ll begin the process of iterating and improving your system. Your customer experience could be improved. Data flow between systems could be improved. Resources could be reallocated that were previously spent managing traditional sales processes toward building your business.
The best businesses are those that have a vision of the future and are running toward it. Are you?