B2B vs. B2C: Helping Brands
Maximize Wholesale Ecommerce
Market Opportunities
While many manufacturers have developed successful business-to-consumer (B2C) eCommerce sales strategies, breaking into business-to-business (B2B) or wholesale sales requires an entirely different toolset and approach. This may be especially true for mid-sized and smaller brands that may lack the resources to develop in-house merchandising teams and sales rep forces focused on creating wholesale relationships with retail partners. As a result, these brands and manufacturers fail to capitalize on the enormous growth potential that exists when they successfully tap the B2B and wholesale marketplaces.
Some brands that recognize wholesale opportunities for their products simply extend their B2C strategy and sales tools into the B2B realm. This approach quickly runs into obstacles due to the complexities and major differences between selling directly to consumers and selling in bulk to retail partners or product distributors. There are also significant barriers to entry for small and mid-sized manufacturers to access the dynamic digital marketplace of wholesale buyers.
Fewer Customers, More Money
One of the biggest differences between B2B and B2C eCommerce is that selling wholesale generates more revenue from fewer customers, a reality that can be viewed either as complementary to or as an alternative to consumer sales. While per-product margins may be smaller in B2B sales, the sheer volume of hundreds or thousands of retailers each reselling a brand’s products to a large customer base can yield greater overall profits. And macro revenue data can drive home this point when comparing overall B2B and B2C eCommerce market opportunities. With the growth of direct-to-consumer online behemoths like Amazon, the casual observer may assume that the consumer marketplace is larger than the wholesale one, but in fact, just the opposite is true by a very large margin. According to the latest United Nations economic spending data comparing B2B and B2C, global wholesale eCommerce revenue is nearly five times that of consumer online spending, and in the United States, B2B eCommerce exceeds B2C by nearly seven times.
Differences Between B2B and B2C eCommerce
When comparing B2B and B2C commerce there are some seemingly obvious differences across the entire process. While some similarities do exist, buyers and sellers engaged on both sides of the transaction are wildly different. Understanding these variations is vitally important for brands seeking to develop an effective strategy for entering the wholesale marketplace and creating successful partnerships with retailers.
Utilizing True B2B Technology
Upgrading existing B2C-focused tools like Shopify to Shopify Plus is a natural progression for a growing brand. But when considering these key differences between B2B and B2C commerce strategies, the importance of utilizing a digital wholesale technology platform becomes clear. For example, simply expanding an existing platform like Shopify for B2B sales will fall short, even if the solution claims it has been adapted for wholesale merchandising and sales. Because of the complexities of the B2B sales process and the specialized needs of wholesale buyers, extending a consumer-facing purchasing platform into B2B ecommerce is not a viable approach.
Solutions designed for B2B commerce go far beyond the needs of a simpler B2C integration. Summarized below are just a few reasons why using a B2C platform for wholesale e-commerce can fall short, and why brands should adopt proven digital technologies to support their B2B sales and merchandising efforts.
Over the past few years, large global manufacturing brands have led the transformation to digital B2B solutions, bringing this technology to a vast network of retail partners. Because retailers are already adopting the wholesale purchasing process, they are now fully vested in it and are reaping the benefits. Brands that move against this trend and use their B2C platform for B2B are likely to face resistance from retailers who prefer an integrated, more capable wholesale buying experience.
Retailer Adoption
The good news for smaller brands that have not yet made the leap to a B2B solution is that the bigger brands have already laid the groundwork with retailer adoption. Brands that are newer to the digital wholesale process simply need to come on board and join this growing B2B marketplace. An advanced digital merchandising platform can generate incremental sales lift by making retailer purchases much more strategic, with respect to product assortment, pricing, and placement. This is simply not possible with a B2C platform. Retailers buy more products when using technology, as they can more strategically calculate the optimum inventory quantity for a particular consumer trend, brand, product line, or sales season. A B2B solution also improves product speed-to-market while providing considerably more time to strategically manage on-time and re-orders, expanding the sales season.
A Truly Digital B2B Sales Process
B2B technology is designed for selling in mass with high-volume orders and reorders whereas B2C is designed for individual purchases. Next-generation digital sales and merchandising technology creates a more flexible and immersive purchasing experience between buyers and suppliers that is beyond the capability of traditional B2C ecommerce platforms. Providing more than just static digital catalogs, this technology is designed to help both manufacturers and retailers maximize the wholesale purchase of complex and diverse product lines through interactive user features. This includes fully customizable digital product catalogs, brand workbooks, assortment planning tools, visual merchandising whiteboards and much more.
Sustainability
Adopting a digital B2B solution helps strengthen brands’ commitments to sustainable business practices. For example, data from the Environmental Paper Network shows that eliminating the printing of 5,000, 150-page catalogs, or 750,000 pages total, reduces CO2 emissions by 33.8 tons, while preserving 15 tons of wood, equal to 90 trees. As more and more consumers become aware of the importance of sustainable lifestyle choices, their preference for, affinity with, and loyalty to brands and retailers that follow similar business practices are also increasing. While many businesses are committing to sustainable practices throughout their product lifecycle, separating B2B from B2C sales practices helps brands further commit to, and have an impact on a ground level, individual green practices.
Strategic Sales Planning
Greater visibility into real-time B2B sales data provides more strategic sales monitoring, planning, and forecasting. The sales performance of individual products or lines is easier to analyze, which aids the strategic sales planning process. A B2B merchandising platform enables final sales planning to take place later, closer to the actual start of the retail season. This creates the opportunity for more timely planning adjustments to maximize sales for both manufacturers and retailers (at sell-in and sell-through). Additionally, sales presentations and suggested order building are done on an individualized level. This personalization allows for greater upsell and sell-through opportunities for brand reps and distribution partners.
Efficient and Accurate Sales Orders
The wholesale process of purchasing and reordering products is time-consuming and becomes increasingly expensive as the error rate rises. A fully integrated digital B2B solution offers the following cost-saving benefits relative to orders, a few of which are available with a B2C platform:
Integrated B2B Payment
Fully integrated electronic payment capability eliminates all paper processes relating to B2B payments for high volume, mass purchases. Brands can enhance relationships with retail partners by providing the increased flexibility and efficiency of buyer-initiated payment with user-friendly retailer/dealer applications. Integrated payment allows for greater transaction automation under preset terms, conditions and controls, while reducing costs associated with human-related errors that are not possible with B2Ctechnology. There is also increased visibility and more efficient management of payables and receivables, thus reducing back-office time and resources needed for payment reconciliation. While easy and convenient payment processes (like ApplePay, buy-now-pay-later options) are cornerstone to the B2C commerce experience, the volume and order size of wholesale purchasing makes these simplified processes inaccessible.
Inspiring the Renaissance of Retail
As brands continue to adopt wholesale ecommerce technology and leverage the enhancements it brings to the B2B sales process, a renaissance in specialty retail is underway. And this enlightening transition to these technologies could not be timelier with the unpredictability of current market conditions and the need for brands and their retail partners to become more flexible in their sales strategies.
This Renaissance of Retail is Happening in the Following Ways:
A more strategic approach to consumer trends
Strengthening sales at sell-in and sell-through
Creating more profitable consumer behaviors
A More Strategic Approach To Consumer Trends
Information is more than power when using innovative technology to create a more strategic approach to selling. Rather than respond to changing consumer trends, brands and retailers can work together to influence and drive trends relative to their products and assortments. B2B ecommerce technology provides a single source of truth that flows through an integrated platform in real time. Applied across combined functions for sales, operations, inventory, and customer service, the result is greater visibility into key B2B commerce data. This enhances a brand’s ability to analyze and predict customer purchasing habits, and to shift its product mix to steer consumer trends for optimal sales and profitability.
“Merchandising is the root of how product comes to life at retail and is central to the long and short-term success of our partners. These stories are the testament to the brand and its value with retail partners. The better the representation, the better the outcome for both sides.”
Missy McDaniel, Senior Key Account Manager, Fjällräven
Creating More Profitable Consumer Behaviors
The next step beyond strategically using B2B sales and merchandising to build greater brand value is to create more profitable consumer behaviors. This is accomplished through closely analyzing enhanced wholesale commerce data. Brands can not only monitor consumer purchasing trends, but also identify opportunities to adjust product development and inventory management, with the goal of maximizing profits, based on real-time customer preferences. This can be done by product line, category adjustments, regional consumer preferences, sales seasonality and other strategic factors.
brand trusted, retailer preferred
Elastic connects brands and retailers to drive efficient commerce and seamless collaboration, streamlining every step of the wholesale process.
