What is B2B eCommerce
B2B eCommerce is the selling of goods or services through online transactions between businesses. Because orders are processed digitally, buying efficiency and effectiveness are improved for wholesalers, manufacturers, distributors, and other types of B2B sellers.
Types of B2B eCommerce
Based on the Gartner report, by 2025, 80% of B2B sales transactions between buyers and suppliers will occur via digital channels.
As a B2B business, you’ll likely fall into one of the following categories.
Each entity has its own advantages and disadvantages, and some businesses may even fall into several categories at once.
Business-to-business-to-consumer (B2B2C) eCommerce takes out the middleman usually between the B2B organization and the B2C, putting the businesses directly in contact with the consumer.
The B2B2C model can best be described by looking at how a wholesaler or manufacturer interacts with traditional B2B and B2C models.
In this case, the wholesaler or manufacturer sends goods to B2B, and these goods are then sold to the final consumer.
In a B2B2C business model, the wholesaler or manufacturer reaches the final consumer by either partnering with the B2B company or directly selling to the consumer.
With the B2B2C eCommerce, these transitions happen online, most times through virtual storefronts, an eCommerce site, or even through apps.
In many B2B2C eCommerce models, the consumer knows they are getting products from a business that’s separate from where they purchased them.
For example, the consumer may purchase a product from an affiliate blogger, but the product is branded and sent by the manufacturer.
Businesses often buy goods in bulk for a lower price and turnaround to sell them at a retail value, and the goods are usually purchased directly from the manufacturer or through distributors.
This form of B2B is called wholesale and could be described as the sale of goods to other businesses.
Wholesale B2B models are present in many industries including retail, food service, construction, and medical, among many others.
Traditionally, wholesale B2B transactions occur over the phone, via email, or by way of spreadsheet order forms in more advanced countries.
In countries like Nigeria, traditional wholesale B2B transactions occur in more face-to-face scenarios or through social media.
With the adoption of B2C in Africa, wholesale eCommerce is digital when conducted through a B2B eCommerce marketplace.
The marketplace allows the wholesaler to display products more easily and creates a seamless buying experience.
With wholesale eCommerce, everything is digital using a B2B eCommerce platform.
The platform allows the wholesaler to display products more easily and creates a seamless buying experience.
One reason the B2B eCommerce market is expanding is a result of B2Cs making the switch.
While it’s possible to make the transition, there’s a bit of a learning curve. B2B transactions tend to be larger than B2C purchases, and B2B sales often rely on long-standing relationships with vendors.
Manufacturers produce finished goods on a large scale by utilizing parts and raw materials in combination with manual labor and machines. In the B2B model, the finished goods are sold to other manufacturers, suppliers, or wholesalers.
The car industry is a great example of manufacturers in a B2B arena. The manufacturer creates individual car parts, such as the engine, gearbox, etc. Then the manufacturer sells these parts to an automotive company that builds the whole car from the parts and sells it to the final customer.
This happens the same way that wholesalers are taking their business online, manufacturers are, too. You see the likes of cable manufacturers selling their products online, something that was unthinkable 10 years earlier.
According to The State of International Ecommerce Report, over a third of manufacturers projected growth of at least 25% in B2B eCommerce sales throughout 2021 and 2022.
On top of that, 54% of manufacturers want to sell directly to consumers. Without a doubt, B2B buyer expectations are shifting, and manufacturers need to stay up to pace.
But it isn’t just B2C customers who have higher expectations. Wholesalers, distributors, and channel partners are also seeking out manufacturers that provide digital buying options, including the ability to view pricing and check order statuses online.
After a product goes through the hands of a manufacturer, there are two options for the next step: If the manufacturer prefers to have more control over the selling aspect of their business, they can sell directly to the end customer. However, this leaves responsibilities such as managing orders, packaging, and marketing in their hands.
On the other hand, a manufacturer can partner with a distributor to sell their product for them. In this case, the distributor works closely with manufacturers in an effort to bring visibility to the goods they are producing, with the goal of increasing sales and moving their product along the distribution channel.
In an eCommerce model, the logistics of the sale happen online, often through an eCommerce platform, which creates greater opportunity for growth. Just like other B2B models, distributors are working to shorten the lead time from sale to delivery and create a customer experience that beats customer expectations.
Online marketplaces like Amazon, eBay, and Walmart prove the huge potential for distributors to sell online and achieve unprecedented growth. In fact, the adoption rate of eCommerce distribution skyrocketed by a weighted 26.3% increase from 2019 to 2020.
And with Amazon setting the precedent for automated, personalized experiences, distributors must incorporate more advanced eCommerce technologies in order to keep their customers’ attention.
BWBMart is a B2B online marketplace that is helping all four types of B2B players to get more income by making Trading easy. If you are a buyer that buys wholesale across Nigeria, contact us here to discuss how we can make your buying experience much easier with invoice financing options with your current suppliers.