B2B e-commerce
B2B e-commerce (also written as e-Commerce, eCommerce or similar variants), short for business-to-business, electronic commerce, is selling products or services between businesses through the internet via an online sales portal. In general, it is used to improve efficiency for companies. Instead of processing orders manually – by telephone or e-mail – with e-commerce orders can be processed digitally.
Definition
The differences between business-to-business (B2B) and business-to-consumer (B2C)
Supply chains are distinctive for B2B transactions. They involve companies providing (sub) components or raw materials from one to another, and only one B2C transaction – the sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single B2C transaction.
B2B buyer characteristics
Generally, B2B and B2C web stores both have search, navigation, detailed product information and personal account history pages. However, in some ways B2B greatly differs from B2C. Most B2B businesses have complex ordering processes, large collections of attributes and elaborate back-end systems. Moreover, in a B2B scenario, buying is part the customers’ job. He needs to make sure he buys all necessary products or components for keeping his company up and running. Thirdly, since organizations can be very large, they need a lot of products or components to keep their business going. Therefore, B2B buyers often place large orders. B2B purchases are also characterized by recurring orders instead of single purchases. Because of that, companies make deals based on their monthly or even yearly demand. They closely collaborate with each other, and each B2B costumer can have its specific prices for certain products. Lastly, multiple people are involved in B2B purchases. For instance, a company can have multiple buyers or buying centers. They are responsible for finding the right products and making the right deal with resellers. Because multiple people are involved in a single deal, B2B is more fact based instead of based on emotions. It’s not about the nicest packaging, but the best deal for the company. In general, ratio is leading.
The characteristics mentioned above can be summarized as follows:
| B2C | B2B |
|---|---|
| Single buyer | Decision Making Unit |
| Fixed consumer prices | Customer specific prices |
| Direct payments | Payment on credit sales |
| Stocks (for a.s.a.p shipments) | Smart shipments (i.e. truckloads) |
| Low frequency purchases | Reoccurring purchases |
| Single visits | Long lasting relationship between customer and manufacturer |
| Buying because you like it | Buying as part of the job |
| Consumer | Buyers as part of an organization with a relationship defined by a contract, terms and conditions |
The differences between B2B e-commerce and EDI
B2B transactions can be processed online in various ways, of which Electronic Data Interchange (EDI) and B2B e-commerce are most often used. Although EDI and B2B e-commerce both have their own, distinctive features, they are often mixed up.
EDI is built for placing large, recurring orders in a standardized process of supplying raw materials to manufacturers. For instance, in accordance with the example set before, an automobile manufacturer regularly needs to order a specific brand of tires for a certain type of car. When manufacturing a certain amount of that type of car, EDI can automatically place an order for the amount of tires needed. So, no product information – like a description, images or pricing – is provided, or needed.
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.
Market development and trends
The B2B e-commerce market is changing fast. There is an increasing amount of companies adding an online sales channel to their business. In 2014, 63% of industrial supplies buyers purchased their products online (UPC, 2014). It is expected that the USA B2B e-commerce market will even grow from $780B in 2015 to $1.1T in 2020 [1]
Integrated B2B e-commerce versus interfaced e-commerce
Integrated e-commerce is upcoming. With integrated e-commerce, part of the software solution is installed inside the ERP back-end system. This means that the connection between the business logic and database of a back-end system is configured automatically. Information that is available in the back-end system, for example article numbers, prices and current stock availability of products, is leveraged, without being copied to another system, and displayed in the front/back end of the e-commerce system. An integrated e-commerce software solution thus does not require investments in recreating and maintaining a separate database or business logic. Instead, it re-uses those of the back-end system, so all data are stored in one, single place. This can prevent input redundancy, errors and synchronization time.
In most cases, integrated e-commerce is in one way or another acknowledged by the supplier of the back-end system, such as SAP ERP or Microsoft Dynamics. Although many B2B e-commerce suppliers claim to be integrated, most web stores are interfaced. With integrated e-commerce, the software solution is installed on top of the back-end system. This means that the connection between the business logic and database of a back-end system is set up manually. Information that is available in the back-end system is being duplicated into the e-commerce software. An interfaced e-commerce software product thus has their own database and business logic that are being synchronized constantly through a connection to a certain back-end system.
Mobile
The phrase mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer's hand, anywhere, via wireless technology." [2] Mobile e-commerce for B2B is becoming increasingly popular.[3] B2B has features different from mobile e-commerce for B2C. Whereas B2C is mostly classic catalogue browsing, mobile e-commerce for B2B requires specific features, which include:
- Displayed prices that are customer specific;
- Stock indication that is always up-to-date;
- Discounts that are calculated real-time;
- Orders can be placed quickly, for example with order histories or lists based on filtered product sets;
- Sales agents should be able to represent their customers.
See also
References
- ↑ Forrester Research. "US B2B eCommerce To Reach $1.1 Trillion By 2020". http://blogs.forrester.com/. Andy Hoar. Retrieved 18 January 2016. External link in
|website=(help) - ↑ Global Mobile Commerce Forum. "Inaugral Plenary Conference". Christiane Morris. Retrieved 18 January 2016.
- ↑ Fashion Tech. http://fashion-tech.co. http://fashion-tech.co http://fashion-tech.co/curious.php. Retrieved 18 January 2016. Missing or empty
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