In 2019, Forrester published a study stating that "by 2023, B2B e-commerce in the United States would reach $1.8 trillion."
We all know what happened next: COVID-19.
Place your bets, ladies and gentlemen. Did this affect the forecast, and what were the actual numbers? You are right, the forecast did not hold. The B2B e-commerce market reached $1.7 trillion by the end of 2021, two years ahead of schedule! We eagerly anticipate what will happen with their other forecast: "by 2027, the B2B volume in the US will reach $3 trillion."
In any case, we already see a steady growth trend and the results of digitalization and the transition of businesses to the online environment. Isn't this a reason for us to delve deeper into this topic and discuss some important aspects related to B2B E-commerce Development?
How B2B eCommerce Business model works
Business to Business eCommerce is a model where transactions are conducted between companies not through negotiations or face-to-face meetings, but via an online platform.
Business to business model is not confined to a specific sector. It encompasses a wide range of enterprises, including manufacturers, wholesalers, distributors, service providers, and other companies, particularly B2B2C (Business to Business to Consumer).
Additionally, when we talk about B2B, we do not limit it to a particular type of product. It can include everything from raw materials and components to finished products and services. This applies across various industries such as manufacturing, agriculture, finance, healthcare, energy, construction, and more. However, as a company offering digital services, we would particularly highlight eCommerce technologies related to SaaS solutions, the creation of ecosystems and web applications, cloud computing and data storage, search engine optimization, and predictive analytics.
So, it's clear: B2B is when one company sells its goods or services to another company. But behind the computer and mobile device screens, there are ordinary people making decisions. From this perspective, a very reasonable question arises.
What is the difference between B2B vs B2C eCommerce?
Let's say you are a company director and you buy a desk for your home office on Amazon — that's a B2C transaction. But if you purchase desks for all the employees in your office on the same Amazon platform, that's a B2B transaction.
Yes, we agree, this example is quite simple. However, it helps us understand how B2B eCommerce software architecture differs from regular web applications for the general consumer. So let's look at the main differences.
Scalability: B2C platforms need to scale to handle a vast number of users and peak loads, while B2B platforms need to scale to accommodate complex transactions.
Personalized Pricing: B2B solutions must account for pricing parameters based on account, region, purchase volume, and more. In regular marketplaces, this can be managed with promo codes, but a commercial application requires a different approach to CRM for managing customer relationships.
Fundamentally Different Logistics and Payment Terms: B2B clients expect more flexible terms, such as credit lines, payment deferrals, and so on. Logistics are more complex and may include individualized supply agreements.
Tools for Managing Purchases and Budgets: In the Business to Business segment, orders are typically larger in volume and made less frequently. Long-term contracts are often established. The decision-making process is complex and multi-staged, involving several participants (managers, purchasers, technical specialists). Decisions are made based on detailed analysis and coordination.
Marketing: For B2C, marketing is aimed at attracting a broad audience using emotional and visual content, social media advertising, SEO, and promotional campaigns. For a B2B eCommerce platform, informational approaches are crucial: content marketing, webinars, and personal meetings.
Different Types of B2B eCommerce
A B2B eCommerce solution can take various forms, depending on the business model and the structure of relationships between companies. Let's consider the main types.
eCommerce Platforms
They allow companies to create and manage their online stores. Examples of popular ready-made e-commerce platforms are:
- Shopify Plus: A platform for B2B eCommerce website development and B2C web applications.
- Magento Commerce: Provides flexibility and scalability for various business models.
Marketplace
On such platforms, multiple sellers and buyers can make deals. They are categorized into: Intermediary-oriented, Buyer-oriented, or Supplier-oriented marketplaces. The most popular marketplaces are:
- Alibaba: The world's largest wholesale marketplace.
- Amazon Business: Brings together thousands of sellers offering specialized products for companies across various industries.
Electronic Data Interchange systems (EDI)
EDI (Electronic Data Interchange) enables companies to exchange standard business documents electronically, such as purchase orders, invoices, and so on. Examples of EDI are:
- SPS Commerce: A platform for supply chain management using EDI.
- TrueCommerce: A solution for integrating and automating business processes using EDI.
Integrated Solutions
Complex software products that integrate various B2B functions and processes into a unified platform.
They may include: CRM (Customer Relationship Management), SCM (Supply Chain Management), PRM (Partner Relationship Management), analytical tools for data collection and analysis, and more.
Within this category, there are separate platforms designed specifically for enhancing operational efficiency. For example, integrating payment transactions, improving resource functionality, and so on.
Collaborative platform, Private industrial network
Software used to facilitate collaboration and information exchange between companies in the supply chain. These systems help manage logistics, automate tasks, and aim to reduce cycle times and increase efficiency. Examples include:
- SAP Ariba: Provides procurement and supply chain management capabilities.
- Oracle Supply Chain Management Cloud: A comprehensive solution for managing logistics.
Product Catalogs
This could encompass typical product showcase solutions as well as PWA (Progressive Web App) applications designed for convenient content viewing across all devices and offline access, coupled with an additional admin panel.
This is precisely the catalog we created for our client, APTIV, a major global manufacturer of automotive components.
Such a solution has provided numerous benefits:
- Simplified product presentations and communication with potential partners.
- Increased efficiency of the marketing team's operations.
- Elevated the promotion of products to a new level.
Currently, APTIV plans to leverage this successful experience across its other divisions.
You can read more about this Case Study here:
A few words about the B2B eCommerce Trends
Historically, B2B eCommerce Development has lagged behind its B2C counterpart, where users have long been accustomed to making online purchases.
Just about 5 years ago, many companies did not see the potential in creating eCommerce platforms for operational purposes and preferred more traditional sales methods: cold calling, face-to-face meetings, presentations, participating in trade shows and conferences etc. Only in the last two years has the situation changed radically. The Demand Gen Report surveys say that:
Here are several key factors have contributed to the change:
- clients have become more willing and loyal to make significant investments in online platforms following the Covid-19 pandemic, when traditional transaction processes were disrupted.
- new digital capabilities have made the B2B eCommerce workflow more convenient for both parties and have addressed major development challenges.
- the rise of millennials, who now hold influential positions in many companies, has shifted market dynamics due to their changing buying preferences.
Today, millennials play a crucial role in B2B purchasing decisions, accounting for 77% of those who make purchasing decisions over $10,000.
This generation, born between 1981 and 1996, is shaping B2B eCommerce trends in several significant ways:
- sellers must accelerate and streamline the purchasing process to meet the "need for speed" of young market participants.
- there is a heightened importance in using customer-centric content and demonstrating expertise (such as reviews, educational videos, thematic research). Participants highlight these factors as crucial for decision-making.
- buyers expect flexible partnerships with suppliers, consistency in sales efforts, and the establishment of trustworthy long-term relationships.
It is crucial to take all of these factors into account when adapting marketing campaigns and making business decisions.
Advantages of Using a B2B Ecommerce Platform
There are dozens of reasons why a B2B eCommerce marketplace or another type of solution (which, by the way, can be combined or completely customized) would be the best step for your business.
Increasing coverage
Digital platforms will provide you access to international markets without the need for significant investments in physical presence. Additionally, you will strengthen relationships with existing clients and enhance initial trust with potential partners.
This is achieved through close interaction, including personalized marketing campaigns, loyalty programs, and online support.
Automation of processes
Increasing the speed and efficiency of order processing, inventory management, and invoicing reduces the number of errors and saves employees' time. This allows them to focus on strategically important tasks.
Process automation also helps reduce operational costs by decreasing the need for physical presence and related expenses (rent, personnel, etc.).
Enhancing transparency
Transparency in the supply chain often becomes a key factor in selecting a supplier. Provide analytics that can help companies track their sales, customers, and competitors, and they will become your long-term partners.
Cost reduction
In data processing (through automation and implementation of innovative technologies), in storage (by improving inventory management), in delivery (through route optimization and negotiations with carriers).
On the other hand, B2B eCommerce for manufacturers is a necessary solution to increase sales volume, easily offer additional products, and increase average order value.
In addition to these primary advantages, using a B2B eCommerce platform will also help:
- make informed decisions based on deep analytics and customizable reporting.
- easily integrate key systems such as POS and B2B eCommerce ERP using universal APIs.
- become more flexible, adapt to market changes and customer requirements.
Looking for the right B2B eCommerce Website Development?
According to Statista forecasts, the global B2B eCommerce market is expected to reach $25.65 trillion by 2027, with a compound annual growth rate (CAGR) of approximately 17.5%. Companies that actively adapt to these changes and invest in developing their digital platforms can secure leading positions in the market and significantly improve their business metrics.
Our team has practical experience in addressing key B2B eCommerce challenges:
- minimizing cybersecurity risks,
- implementing advanced data management systems,
- simplifying integration with existing infrastructure to facilitate seamless transition to new ecosystems.
We specialize in solutions of varying complexity across different market segments.
FAQs about B2B eCommerce Development
What B2B eCommerce features should you prioritize for your business?
You should focus on features that enhance scalability, personalized pricing, and complex logistics management. Ensure your platform supports flexible payment terms, efficient order management, and integration with existing systems like ERP and CRM. These features will streamline your operations and improve customer relationships.
What are the stages of our B2B eCommerce development process that ensure a smooth launch?
Our development process follows these key stages:
- Research and Development: Understanding your business needs and setting the foundation.
- Market Research: Analyzing industry trends and competitors to refine our approach.
- Prototype Creation: Building a preliminary model to visualize the solution.
- Design Stage: Crafting the user interface and experience to align with your brand.
- Development: Bringing the design to life with coding and integrations.
- Project Testing: Ensuring functionality and performance through rigorous testing.
- User Acceptance Testing: Confirming the solution meets your expectations.
- Project Deployment: Launching the final product into the live environment.
- Support and Maintenance: Providing ongoing support to ensure long-term success.
How can you create a successful B2B eCommerce website that meets your industry’s needs?
Start by understanding your industry's specific requirements and customer expectations. Implement features that support personalized user experiences, efficient transaction processing, and robust security. Additionally, ensure your site is scalable and adaptable to future growth and technological advancements.