When choosing an e-commerce solution for your online store, it’s essential to identify the key differences between B2B and B2C e-commerce in order to make sure your platform of choice works best for your specific business. The choice of ecommerce solutions on the market is quite broad, and selecting the right one out of the spectrum may prove to be quite challenging. If you are a B2B company, it’s especially important to be aware that there is a number of specific needs the sector has, that are hard to meet with most standard e-commerce solutions.
Here are the main differences between B2B and B2C ecommerce that would directly affect the choice of solution for an online store.
The biggest and most obvious difference between the two retail sectors is the volume of sales and money flow. Currently in terms of funds spent in online purchases, B2B e-commerce is about twice the size of B2C. Forbes.com predicts B2B e-commerce market will be worth 6.7 trillion dollars by 2020.
Due to such a significant difference in volumes, B2B companies often struggle with standard B2C-focused solutions not being able to handle the load.
B2C works directly with end-buyers and does not require any order approvals or special related procedures. B2B, on the other hand, often needs to accommodate for a whole chain of negotiations and approval processes, and the e-commerce platform they use has to be able to support approval process by often as many as 10 different roles with an order trail being accessible by some or all of those roles.
Here’s a quick example:
The distribution company’s manager orders product from a huge vendor and requests a quote. The end price in the quote is based on the number of products in the order and also on possible promotions held by the vendor during that current week/month/etc. So, the price varies and both sides need to approve/decline it.
It gets even more complicated when this needs to be done on a multi-vendor level (orders from separate vendors with different quotes and approvals).
B2C-focused software doesn’t often face those challenges and might not have a quick solution for situations like this.
The ownership of sales processes within the organization differs between B2B and B2C as well. B2C sales are typically managed by Marketing with a little involvement from IT and Operations. In B2B, Operations and IT are the main process owners, which brings us to the key difference of building relationships with the buyer.
When talking about the differences between B2B and B2C ecommerce, the key question is “Why do we do e-commerce, to begin with?” What’s the main goal? The answer to that will vary depending on your retail sector.
B2C tends to be heavily focused on acquisition. The main goal here is to get more customers and sell as much as possible. You have the number of items that you market to as many potential buyers as you can.
In B2B, the priorities shift quite significantly. Here you sell high volumes of product to the same buyer, so, the main priority is to retain that buyer. Building and maintaining long-term partnerships is crucial for a B2B-focused vendor.
Another important point is that the buyer in B2B is often not the end consumer, but a purchasing agent – a specially trained person who makes buying decisions. That’s a totally different approach to “shopping”!
Based on this difference, B2B e-commerce requires easy and convenient tools, which may include:
And a number of other B2B-specific functions - as opposed to the B2C sector that typically strongly prioritizes a flashy and catchy website meant to attract as many potential customers as possible.
With its priorities set on building long-term partner relations B2B sector has another specific factor that is not really present as much in B2C e-commerce these days – using actual salespeople, who work directly with the customer.
It’s fairly safe to assume these days that regardless of the commerce sector most people, in general, prefer to order directly online rather than talk to a salesperson. Naturally, B2C e-commerce has quickly adapted to this new reality and direct sales professionals there are now pretty much extinct. Even more naturally, the remaining salespeople see e-commerce as a huge threat.
However, in B2B sector, given its specifics, sales representatives are still essential for building and maintaining partner relations. And with this set-up, on-line purchasing options are actually a big help rather than a threat - they are extremely useful for getting routine orders out of the way in order to let your sales team focus on the more important tasks at hand.
For complex transactions or bigger orders, B2B buyers would still want to talk to a salesperson. So, now your field sales can actually put their energy into their main goal – relationships, rather than be routine order-takers; and if they still get compensated for their customer base, they no longer feel threatened by the new technology, and it’s still net-positive for the salesperson and the company.
In order to make routine orders fast and easy for your clients, while not taking away from your sales reps, your e-commerce solution needs to accommodate both – a convenient online ordering system and a way to track and bind the orders to specific sales people within the company. Plus, it needs to be able to accommodate more complicated interactions, when there is a salesperson involved.
This one is pretty straightforward. Let’s look at Amazon or eBay for example as some of the most well-known B2C e-commerce platforms. Literally, everyone, whoever enters the website to shop, gets the same assortment of products for the same price. It doesn’t matter how long you’ve been using Amazon for your day-to-day shopping or how many items you’ve purchased - the products displayed will still be the same.
In B2B sales, the buying experience needs to be customizable and unique for every partner (back to the part about customer relations). Besides, any given customer is not necessarily buying directly from the seller. Sometimes, your buyer will use their terms with your company and their procurement system for their buyers. So, unlike B2C, where you can control every step of the end-user experience, in B2B it’s often impossible.
As a B2B vendor you also often need to accommodate a number of different selling and buying partners within the same system. Here is where B2B-specific solutions also come to save the day. Virto Commerce, for example, one of the most well-known B2B ecommerce platforms, allows for multi-vendor catalogs where all the data about all available products or services by every vendor you work with is stored in one place and can be easily accessed, updated, and shared in a matter of a few clicks.
Plus, you may want to offer proprietary kits or bundles or different tiers of products for different retailers based on the relationship you have with them. In this case, each buyer’s experience will need to be locked down to them specifically, and you would need to have technology that enables that.
As we have previously determined, the sales types and customer relations are among the key points when talking about the main differences between B2B and B2C sectors of commerce. While in B2C you’re marketing the same few items to a huge pool of customers, in B2B you’re selling products to the same 1 customer by pallet-load. That requires different logistics and a different way of organizing shipping processes. Thus, your e-commerce solution needs to be able to handle that difference.
It’s essential for B2B e-commerce to have a well-structured system, where returns, concerns, etc. could come through a measurable channel, and metrics and analytics can be applied. Shipping and tracking would need to accommodate higher volumes within fewer order entries as well.
As has been mentioned before, the Amazon-like experience works perfectly for B2C. Everyone is getting the same range of products and the same price for every item. They then pay for the order with a credit card and is pretty much good to go at that point.
B2B however, as pointed out before, needs to be able to account for customer relationships. That applies to not only the product assortment but also to partnership terms and pricing. Plus, a B2B vendor needs to support additional ordering and payment options that are not necessary for B2C - credit checks, credit account status, etc.
Working with customers who order high volumes of product, naturally, a B2B vendor negotiates different pricing with different buyers based on a number of factors, like purchase volumes, custom orders, customer loyalty programs, etc. So, unlike B2C e-commerce software, where you simply set a price that applies to everyone, a B2B e-commerce solution needs to be able to work with negotiated quotes (pre-determined options you might want to offer) and contract based price adjustments - specific terms agreed upon with your customer.
To sum it up, transactions and shipping volumes, customer relations, and sale types are all drastically different in B2B and B2C e-commerce. And those differences create a number of unique requirements for B2B companies making it hard, if not impossible to comfortably adapt B2C-focused e-commerce solutions to B2B needs through customization. B2B requires its own set of tools and set-ups to be able to use e-commerce solutions conveniently.
P.S. Just to make sure you get Ecommerce Templates in the right place.
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