What is B2B eCommerce?
B2B e-commerce explains a scenario where trade occurs between businesses via online platforms.
It is known in full as business to electronic business commerce. It entails the sale of almost any kind of goods or services through online portal pages. It is an improvement on the traditional form of trade where orders are manual, transactions are majorly through cash, and trading requires physical contact between buyers and sellers.
The peculiarity of the B2B e-commerce is that most of the time, goods sold on these B2B platforms are not consumer goods. They are mostly goods whose production is for consumption in the further production of other products. The implication of this is that the output of one business is the input of the other.
B2B E-commerce enterprises are less capital-intensive and require far less human labor, as compared to those of traditional stores. And on the other side of this narrative, they can make much more returns than traditional stores do. They are more likely to engage customers better and reach a much larger share of the market than do their conventional counterparts.
When did it start?
This commercial activity has been existent for quite a while now, although it was never always called business to electronic business commerce. The term B2B e-commerce only just made its way to being used about a decade ago. The concept around the B2B e-commerce business has existed since as far back as the 1960s. The first structured form of B2B e-commerce dates back to 1975. It was in this year that the first EDI (electronic data interchange) standards got published, and few years down the line, brands like GM, Ford, Sears, and K-Mart, already were getting their supplies using EDI.
Over the years, e-commerce has grown beyond just EDI, and now, EDI is only just one form of transaction. Even though it is one of the oldest, it is still very relevant in today’s commerce. It is a standard business practice that is rampant among the Fortune 500 companies.
What is the market size?
The Business to Business electronic commerce is a fast-growing one, especially since the widespread use of social media and the prevalence of several different technologies that aid online communication and transactions.
E-commerce is fast changing the nature and method of operation in the market. With B2B e-commerce, the market has grown very different from what it used to be. Over 88% of B2B companies around the world have some form of online presence and have at one time or the other gotten clients via online sales channels.
In the U.S., as of 2014, The Business to Business e-commerce market had 63% of its capital goods transaction online while present in the first quarter of 2020, the percentage will rise to a whopping 90.4%.
Types of e-commerce
- E-commerce Site: This type of business to business electronic commerce platform is usually a site that is accessible to anyone, although in some cases, it requires passwords before customers can log in.
- Punch-out or web procurement: This B2B electronic commerce features software that connects to those sites with which customers plan. What this means is that here, the B2B company’s website for purchase is not external to the planning system of its clients. So that way, they are always in the face of their clients.
- Open online marketplaces: These e-commerce stores share features with physical marketplaces. Here, several B2B stores will have their commodities on the market site while the market regulates the interaction between buyer and seller. Here, prices differ, sometimes even the quality of products, delivery charges, terms of payment, and delivery methods. Examples of the open online marketplace are Alibaba Group and Amazon Business.
What are the Different Ways to Start a B2B E-commerce Business?
With the present trends around the world, it is challenging to be a wholesale dealer or even a manufacturer and not have an online platform where sales and distribution can occur. The B2B e-commerce platform is critical if you are looking to scale up your sales and widen your range of reach.
To have your B2B business get into the E-commerce space, below are steps you can take
- Know your target audience and create your business system around what suits them.
- Invest in your search for suppliers and verify the pricing, delivery credibility, and quality of products. The best way to know these things is actually to order. So, order samples.
- Count your cost and determine your price.
- Set up the online store.
- Take product photos and contents and upload them.
- Get news about your store out there and drive traffic.