Over five times larger than the B2C industry, the worldwide B2B e-commerce business was estimated to be worth $14.9 trillion in 2020. In addition, Forrester projects that by 2023, B2B e-commerce would represent 17% of all B2B sales in the United States, totaling $1.8 trillion.
Without a doubt, B2B e-commerce is expanding to a new height
Business-to-business electronic commerce, also known as B2B e-commerce, refers to the sale of products or services via online exchanges between companies. For wholesalers, manufacturers, dealers, and other types of B2B sellers, buying quality and productivity are increased since orders are executed digitally.
Road to B2B marketplace
B2B companies have historically been sluggish to adopt e-commerce. Only 9% of all B2B product sales in the United States were made through an e-commerce website just before the pandemic, according to an eMarker analysis.
But with the pandemic acting as a catalyst for change and more millennials entering the B2B market, customer expectations are rising more quickly than ever, and B2B businesses need to keep up.
A buyer’s direct or indirect customer experience accounts for 80% of B2B purchasing choices. 87 % of buyers in the international B2B marketplace would pay more for a supplier with a superior e-commerce portal and experience, up from 81 % in 2020 and 74 % in 2019.
B2B e-commerce types
By 2025, 80% of B2B sales between consumers and sellers will take place through digital channels, predicts Gartner.
You’ll probably fit into one of the following groups as a B2B company. Each entity has its benefits and drawbacks, and some companies may even come under more than one category at once.
- B2B2C
- Wholesale business
- Manufacturers
- Distributors
B2B2C
By cutting out the middleman who often stands between a B2B organization and a B2C, business-to-business-to-consumer (B2B2C) e-commerce puts companies in direct touch with customers.
The interaction between a manufacturer or wholesaler and conventional B2B and B2C models is the best way to explain this model. In those circumstances, the manufacturer or wholesaler transfers products to B2B, who then sells them to the final customer.
In a B2B2C business, the wholesaler or manufacturer either partners with the B2B or sells directly to the customer to reach the final consumer. These shifts take place online with B2B2C e-commerce, frequently via apps, websites, or virtual marketplaces.
Wholesale business
Businesses frequently purchase products in bulk from manufacturers or wholesalers at a lower cost to resell them at retail prices. The sale of goods to other businesses is another way to define this type of B2B, known as wholesale.
Many businesses, including retail, food service, manufacturing, and healthcare, use wholesale B2B models. Wholesale B2B transactions typically take place over the phone, over email, or via spreadsheet order forms.
For instance, if you use a Chinese B2B platform, everything in wholesale e-commerce is digital. The platform facilitates easier product display for the wholesaler and streamlines the purchasing process.
Manufacturers
Manufacturers use parts and raw materials along with manual work and machines to make completed things on a huge scale. The final products are sold to other companies, suppliers, or distributors in a B2B business.
A good example of a manufacturer in a B2B setting is the auto industry. Individual auto components, such as an engine and fuel pump, are made by the manufacturer.
The automobile firm constructs the full car from the parts and sells it to the customer after the manufacturer sells them the parts. Manufacturers are doing business online in the same way that distributors do.
From 2021 to 2022, over a third of manufacturers predicted an increase in B2B e-commerce sales of at least 25%, according to The State of International Ecommerce Report.
Distributors
There are two alternatives for what happens next after a product leaves the hands of the manufacturer. The manufacturer can sell directly to the end-user if they would rather have more control over the selling portion of their business.
But this still places duty like order management, packing, and marketing in their hands. However, a producer can collaborate with a distributor to sell their goods on their behalf.
In this situation, the distributor closely collaborates with the producer to increase sales and move the product down the distribution. They do this by raising awareness of the products they are making.
Conclusion
To conclude, there is no shortage of e-commerce websites and capabilities available for the B2B community. Whether you’re trying to start a B2B business or want to move your present firm online.
Although switching to digital may be uncomfortable for your company, the advantages of e-commerce greatly outweigh the upfront cost.