B2B eCommerce, short for business-to-business electronic commerce, is the sale of goods or services between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of a company’s sales efforts. Instead of receiving orders using human assets (sales reps) manually – by telephone or e-mail – orders are received digitally, reducing overhead costs.
The Differences Between Business-To-Consumer (B2C) and Business-To-Business (B2B)
B2B and B2C e-commerce may look the same, they are quite different. Business buyers and retail consumers have different purchasing needs. The differences can be:
- Buying Impulsively vs. Buying Rationally – B2C buyers will buy on impulse and make one-off purchases, B2B buyers plan for purchases and make recurring purchases
- Single Decision Maker vs. Multiple Decision Makers – B2C purchases are decided upon by the buyer, B2B purchases often involve several layers of approval and may involve different departments
- Short-term Customer Relationship vs. Long-term Customer Relationship – B2C purchases are often one-off purchases, B2B purchases are based on long-term and on-going relationships.
- Set, Fixed Prices vs. Diverse Prices – B2C prices are generally not negotiable. B2B prices are usually negotiated individually.
- Pre-Delivery Payment vs. Post-Delivery Payment – B2C e-Commerce is generally paid by credit card, debit card or PayPal before the goods are shipped in B2B payment is often on terms and may be 30 or more days after goods are shipped.
- Deliveries focused on speed vs. Deliveries focused on punctuality – B2C buyers are looking for speed of delivery and B2B buyers want deliveries on a reliable schedule.
The Differences Between B2B eCommerce and EDI
B2B transactions can be processed online in various ways, of which Electronic Data Interchange (EDI) and B2B eCommerce are most often used. Although EDI and B2B eCommerce both have their own, distinctive features, they are frequently confused.
EDI is the electronic transfer of purchasing information between the buyer and seller. EDI transmits the information from the buyers purchase order to the seller’s sales or customer service department for conversion to a sales order. EDI is well suited for placing large, recurring orders to supplying raw materials to manufacturers. For instance, following the example above, an automobile manufacturer regularly needs to order a specific brand and size of tires for a certain car model. When manufacturing a certain number of that type of car, the buyers can use EDI to place an order for the number of tires needed. So, the seller need not worry about providing product information – like a description, images or pricing –for reordering purposes.
Although, like EDI, sales orders are processed online, with B2B e-commerce it is possible for customers to order occasionally and in irregular order quantities. Also, B2B e-commerce enables the display of many different types of detailed figures and images. It is possible to exhibit a full range of products or parts. Therefore, a web store provides the opportunity to cross- and upsell.
Digital B2B companies that incorporate a B2B eCommerce solution among their existing business systems can target their customers more effectively and take full advantage of a rapidly growing B2B eCommerce market.