The Complete Beginner’s Guide to B2B Ecommerce

When it comes to ecommerce, B2B transactions reign supreme. According to research from ecommerceDB, the global B2B ecommerce market in 2020 was valued at $14.9 trillion. That’s more than five times the value of the B2C market.

Why is that?

Businesses are constantly selling goods and materials to other businesses, and the ability to do it all online has massive benefits. Merchants can get more exposure, connect with more potential clients, win more sales, and scale up quickly — all while saving time and money.

If you’re wondering how it all works and how you can get a piece of the pie, you’re in the right place.

What Is B2B Ecommerce?

B2B ecommerce is short for business-to-business electronic commerce. It’s a broad term that describes when businesses buy and sell their products to each other online.

Keep in mind that it’s different from when you buy from your favorite online retailer, because you’re a consumer, not a business (that’s B2C, which we’ll cover in a bit).

But if your favorite online retailer buys its inventory online from another company, that’s B2B ecommerce.

And it doesn’t stop at buying finished products, like a t-shirt or a washing machine. B2B ecommerce also covers raw materials like fabrics, auto parts, and building materials.

However, most B2B ecommerce falls under the umbrella of retail, where store owners buy discounted items in bulk, then sell them to individual customers at a markup to score some profits.

You’d be surprised by how many items you’ve bought that weren’t actually manufactured by the store you bought them from!

Types of B2B Ecommerce

There are four main B2B ecommerce models: manufacturing, wholesale, distribution, and retail. Here’s a breakdown of each type:

Manufacturers

Manufacturers are companies that source raw materials and employee labor to produce finished goods. In B2B ecommerce, manufacturers invite wholesalers and distributors to see their products and accept offers from different sellers.

When sourcing products from manufacturers, look for companies that produce goods on-demand. This allows you to quickly change suppliers if you experience issues with product quality. 

Wholesalers 

Wholesalers purchase goods in bulk at a low price from the manufacturer or distributors, then sell them for a profit. The products are usually sold at retail value but cost less since the supplier offers discounts on wholesale purchases.

Wholesalers depend on personalized products catalogs and price lists to make purchases. When it comes to selling, today’s wholesalers operate across multiple marketplaces. Online marketplaces have made it easier for wholesalers to showcase their products and provide a seamless customer experience. 

Distributors 

Distributors aren’t always involved in B2B ecommerce, but when they are, they’re something of a “middleman.” Most distributors work with manufacturers to both sell and deliver products on their behalf. Once an order comes in from a customer, the distributor will collect the goods, load them and deliver them in a timely manner.

Distributors normally seek wholesalers who will buy their products in bulk for resale. A wholesaler works more closely with retailers, which allows them to match customers’ needs with the items in stock.

Retailers

Retailers buy products from distributors, wholesalers, or even sometimes directly from manufacturers to sell to consumers via their online and/or brick-and-mortar stores. Retailers operating in the B2B space have a much narrower target audience, though buyers can span different positions and verticals. 

For instance, a B2B retailer might receive queries from a tech startup’s business, technical, or financial and operating departments. Plus, when it comes to making the final purchase decision, the person choosing the product may not have the authority to purchase. A high-cost purchase, for instance, often requires authorization from the top level.

Differences Between B2B and B2C Ecommerce

In many ways, B2B ecommerce is similar to its B2C counterpart. But there are some key differences to note, such as:

Length of the sales cycle

B2B transactions are long and complex, with companies often taking months to finalize a manufacturer or wholesale distributor. In contrast, B2C has a shorter buying cycle where consumers purchase spontaneously. Thankfully, we now have online B2B marketplaces like Handshake to help shorten the process. Handshake is a curated marketplace of handpicked suppliers, which means you get to the selection part, faster. 

Number of decision-makers

While B2B orders involve numerous stakeholders overseeing specific workflows, that’s not the case with B2C. B2C consumers are independent and easily make purchase decisions. Clearly then, it’s important to create an optimal user experience for decision-makers working in various positions so that the B2B buying process is a lot quicker.

Average order value

In B2B ecommerce, it’s common for businesses to get fewer than a couple hundred orders but still generate millions in sales. In contrast, a B2C ecommerce brand might need to acquire and sell to hundreds of thousands of customers to achieve similar revenue figures. 

Of course, some B2C businesses (such as designer brands) have high average order values. But across most industries, B2B purchases are much higher in price.

Tips to Break Into (and Succeed in) B2B Ecommerce

Interested in becoming successful in the B2B ecommerce world? Here are some tips to build momentum and grow your business.

1. Choose a specialized B2B platform

When it comes to B2B selling, a basic ecommerce solution won’t cut it. B2B buyers have certain expectations and preferences when buying goods online, making it crucial to get the platform selection right. Ensure the platform you choose checks the following boxes: 

• User-friendliness. A user-friendly B2B ecommerce platform will have an intuitive user experience. Information will be easy to find, the tools will load smoothly, and customer service will be easily accessible if you have any questions.
• Responsive design. The platform should be just as easy to use on a mobile device as it is on a desktop. According to Statista, mobile shopping makes up 31% of all ecommerce sales, and that trend is not going down anytime soon.
• Dynamic pricing & discounts. Ideally, prices should change depending on details like order volume, frequency of purchases, bundles, and subscriptions. Find a platform that does all this work for you in the backend, so you don’t have to crunch numbers.
• Advanced search. Make sure customers can search based on whatever they need, like UPC, SKU, and product name. Bonus points for being able to sort results based on filters like top sellers, recent orders, and promotions.

While many solutions fulfill these requirements, Shopify Plus is a top favorite of B2B merchants and online shops. Shopify’s standout features include no-code store builder, multi-currency support, volume pricing, and a dedicated wholesale storefront. 

You can even run parallel ecommerce stores for B2B and retail customers on Shopify, making it easier to track your sales in one convenient place. (Oh, and Handshake plugs in seamlessly with Shopify, too.)

2. Educate your customers

B2B customers rely on information throughout their purchase journey, but if a potential customer cannot find it easily, they will take their business elsewhere. To ensure they stay and further explore your brand, commit resources to engage and educate buyers along the path to purchase. 

For example, you can create instructional videos on how to get more out of your product. Additionally, you can provide customers with a range of collateral, like FAQs, guides, and case studies on your website, as well as spec sheets, manuals, and reviews on your product pages. 

Making information easily accessible is an effective way to instill confidence in your customers. Buyers will feel better purchasing from your company, and being confident about their decisions will make them more likely to shop more with you.

3. Offer personalized experiences

Today’s B2B customers want digital commerce experiences that feel like B2C. They have heightened expectations from the companies they engage with to deliver highly-tailored offers and marketing messages. You can stand out from other businesses by offering a unique, personalized customer experience across different touchpoints.

Here are some of the things you can personalize: 

• Site search: B2B customers increasingly rely on site search to find the products they want. Personalize their experience with a search function that allows for category filtering and sorting by make, model, attributes, functionality, etc.
• Customer account: Personalized customer accounts can drive repeat sales for your business. Set up your accounts to summarize critical data for each buyer, including their order history, wishlists, recently viewed products, and referrals. If you’re using Shopify, you can even provide a reorder option within the customer account page using apps like Flits. 

• User-generated content: No matter how well you present your products, your target customers will seek the opinion of others before deciding whether to purchase. Make it easy for them by posting reviews, images, and videos of real people sharing their experiences with your items. 
• Product recommendations: Instead of recommending products commonly bought together, consider suggesting items based on your customers’ browsing and shopping history. You won’t need to track anything manually, as Shopify offers product recommendation apps that do the legwork for you.

4. Use dynamic pricing

Price has a significant impact on a B2B buyer’s purchase decision. Most B2B customers want pricing to be tailored according to their order quantity and product combinations. In other words, they expect brands to offer dynamic pricing that adjusts itself based on the quantity or the total amount in their cart.

To meet these demands, Shopify makes offering tired pricing and discounts easy. Apps like Volume & Discounted Pricing enable you not only to offer volume pricing but also to customize the look and feel of your pricing section to match product pages. 

Examples of Businesses Doing B2B Ecommerce Right

Need inspiration to help you start a B2B ecommerce business? Check out these 3 examples of successful B2B ecommerce brands to inspire your own venture.

1. Grainger

Grainger is a premier industrial supplies and equipment provider. Based on this description, you’d think it would have a long and complex order process, but it’s the opposite. You can purchase suppliers as a guest, search using extended filtering options, and see which products are in stock at any given time. 

Grainger also offers a handy mobile app that makes repeating orders convenient. Just scan a barcode, and the product details and count will auto-populate for you.

2. eJuices

A B2B wholesaler for e-liquid brands and vape products, eJuices excels at personalizing the customer experience. In addition to customer-facing features like a rewards program, intuitive search, and order tracking service, the company offers wholesale financing in partnership with the B2B payments solution provider Behalf. 

Instead of forcing retail customers into large, up-front payments, eJuices offers them a more flexible way to pay for their orders.  

3. Polycom

Maker of the iconic three-point phone, Polycom does a fairly good job at catering to its audience’s love for self-service. You can find a repository of self-help content on its site that goes far beyond standard text pages. 

Case studies, webinars, detailed spec sheets, and even presentations all make for satisfactory customer experience. 

B2B Ecommerce Is Here to Stay

As you can see from the research, B2B eCommerce is a booming industry that’s not showing any signs of slowing down.

And we can thank technology for helping with that. With each passing day, new developments like B2B ecommerce platforms are helping to connect more aspiring business owners with simple, quick, and reliable ways to find the perfect products to sell in their stores.

If you’ve been thinking about starting your own retail store, but are unsure where you’d source your products and how you can be certain you’re making the right choices, a B2B ecommerce platform like Handshake might be the perfect solution.