In the last few months, I’ve noticed a lot of movement in the digital ecosystem in terms of B2B sales. Either by the projects at ACCT.global as by what I’ve been reading lately.
Do you play in the B2B market? Are ready for a digital transformation?
I’d like to start this conversation by checking the numbers. Did you know that according to a latest Forrester Research, in the United States, direct sales will respond to up to US$ 1.2 trillion by 2021. In addition, analysts foresee that, by that year, e-commerce will account for nothing less than 13.1% of business-to-business transactions.
When I see the numbers and the movements happening in the ecommerce ecosystem, where I belong to, I think that B2B e-commerce sales is going to reach heights never seen before by the next few years.
I also believe that very soon most of the companies will stop printing catalogs and hiring door-to-door salesperson, to rely on digital sales infrastructure directly with their customers.
Anyways, the purpose of this text is to share with you my thoughts and experiences in regards to eCommerce for B2B, whether you are already doing online transactions or thinking about taking your first steps. Perhaps this will help with some insights.
The Markeplace role for B2B sales
So, before we talk about directly B2B sales, I’d like to start here making an overview of what is going on in the digital market, more specifically talking about Marketplaces.
You probably have heard and purchased in a Marketplace, but let provide a quick definition of what it is.
For those who don’t exactly know yet, a marketplace itself is an online platform where a group of people gathers to purchase and sell a large number of goods and services.
In other words, a Marketplace may be understood as Shopping Mall through a screen. It’s an online environment where a variety of goods and services can be found in one single place.
And this is totally not new. This concept took place back in 1990’s with today known giants Amazon and even Ebay. What happens is that these guys leveraged several and successful small & medium-sized online shops nowadays, who followed their tracks.
How does Marketplace work?
Marketplaces behave as a middleman between the buyer and the seller to handle payments, dispute settlements and provide shipping directly to the end customer.
To provide these services such as listing, payment, dispute, and marketing, sellers sometimes end up paying up to 30% of GMV to these “middleman” platforms as fees.
Benefits of Marketplaces
Transparency throughout the whole buying journey.
An easy way for SMBs to start selling in the eCommerce market.
Secure payment processing options.
Customer support aspects.
Get your product to be found easier.
Build a faster reputation.
Integration of different products without having an inventory.
Are there any inconveniences?
Sure, basically they are:
Reducing your profitability/margin.
There is more competition inside a single platform.
It’s up to you to make your calculations and prediction.
Why Marketplaces have been so successful in the past few years
In my point of view, it’s because people feel more comfortable shopping in these places because it’s easier for them to find options, they are usually well-established and have a higher reputation.
I also believe that this happens because out there are a lot of small private stores and advertising pushes, which perhaps generate a mistrust felling for consumers.
I also add to that the increasing incidents of phishing scams and poor-quality customer service make consumers more cautious about purchasing online than ever before.
Well, given this situation, some sellers will rather first share their profitability with the middleman to attract their first group of customers, who will leave positive feedback and spread about their products, instead of investing in advertising.
For some sellers, a Marketplace may be their main sales channel as a strategy. For others, it may work as a business catapult.
What’s the best part of this?
Whether you are industry, store, buyer or seller. It’s always possible for you to set up your own Marketplace to grow your business ecosystem while generating revenue over other sellers products.
How are Marketplaces for B2B sales?
This why I wanted to start this post talking about Marketplaces.
Following the same concept as the B2C, for the B2B process, a Marketplace works as a one-stop online shop for business customers (executives, procurement professionals, purchasers, etc.) enabling them to deliver or enhance their business offerings to their clients. Marketplace dynamics provide a new way to open up opportunities in traditional B2B markets.
In the traditional market, the manufacturer builds the product, sells to wholesalers and/or distributors who find channels for the ultimate sale of the product.
When a B2B marketplace is at the center, the marketplace operator coordinates with sellers to offer more products to serve more customers.
As I’ve mentioned before, Everything is done via a single online location, where merchandise is sold. Operators receive a commission on the sale and share information with sellers.
For example, let’s imagine an Auto Parts Business. Let’s imagine that you are a brake pad or liner manufacturer, but you only have few models and can’t reach the whole market needs.
Why not provide to your clients a Marketplace where they can purchase directly from you and also offer them complementary products from other manufacturers, and still earn money out that. Besides, you will also be providing a totally different purchasing experience for your customers.
Still in the brake pads industry idea, think about the benefit of offering to your customers extra features such as tires, brake drums and even services, all in the same instance with one single checkout and still earn over this transaction.
In addition, through the Marketplace, customers are no longer forced to make long-term forecasts to (hopefully) have the right inventory at the right time. It all depends on the company’s business rules, but everything is possible with a well built digital structure.
By doing this you will probably grant a higher satisfaction and solid relationships with you this customer, generating long-term value for your company.
Is a Marketplace infrastructure mandatory to operate B2B eCommerce?
If you like very much the idea of deploying a Marketplace channel for your business, however, you believe that’s still too advanced for you, don’t worry. You can always start with a basic B2B digital channel to track new customers, which can easily be converted into a Marketplace later on, and here is the second part of this post.
Let’s talk about digital B2B commerce infrastructure.
Even though you are not willing to turn your business towards a Marketplace strategy, why your company must have a digital B2B commerce structure?
Throughout time, B2B sales were a long and arduous process of negotiation, bargaining and delivery, right?
Today that is all changing. Buyers need their supplies for now and they don’t have the time to negotiate the price for months. At the same time, they are willing to accept online methods of transaction, authentication, quality control and feedback. These processes are increasing the consumerization of B2B.
Consumers are getting more and more comfortable buying online. Nowadays, 70% of procurement and purchasing processes start with internet research. Rather than visiting a supplier’s location, negotiating a price over time and building a long-term contract, all of the information is supplied on a website with a single price for each product (with bulk discounts).
So, if you are a supplier, why should you have a B2B infrastructure? Basically to move faster ahead of your competitors.
There is one last point I’d like to mention here before we end: go for an omnichannel mindset
When are talking about B2B (and even B2C), we must go far beyond information and offers, but also accounting, administration preferences, support, payment, post-sales, and many other customer services, all in the same channel. Be practical with your customers.
In this case, Cloud platforms, such as Software as Service (SaaS), for example, allow B2B businesses to integrate phone systems with other communications channels such as video, chat and mobile apps. That means, the same experience in whatever medium your customer chooses.
Anyways, if you are looking for a digital transformation, no matter what your business strategies are, there a few unmissable points you must have in mind:
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Be as accessible as possible: if your clients feel that you are readily available to lend support, they will be more likely to trust you and complete a purchase.
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Make order placement simple: B2B purchasers crave convenience and speed when placing orders.
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Understand your customer base: you must know your clients profile and behavior to establish a solid relationship.
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Anticipate information: by guiding your clients in the decision-making process, you can help eliminate frustrations and speed up your sales.
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Launch a targeted marketing initiative: with all the points above clear, increase sales by personalizing your marketing initiatives to reflect the specific needs of your top B2B clients.
After all, be smart on your digital infrastructure and process and you will surely build better and long-term relationships.
This is my contribution to get you ready for a digital revolution.
Thanks for listening and see you soon!