Leveraging eCommerce for B2B Wholesale Operations
If you found this article on the web, you are likely a B2B Wholesale business that is looking to expand your operations into the eCommerce space. You’re on the right track, as eCommerce continues to grow in popularity exponentially year over year. There are specific challenges that B2B merchants face when operating an eCommerce store, and you will want to address them before they become large issues. First, let’s define what B2B wholesalers are by defining what they are not.
What is B2B Wholesale?
Business to Business (B2B) Wholesaling is NOT Business to Consumer (B2C) or Direct to Consumer (D2C). Here’s how they vary:
- B2C companies typically buy products from a wholesaler and sell those products at a markup to consumers on their eCommerce store.
- D2C companies sell the products that they manufacture directly to consumers, holding on to any revenue that would otherwise be lost by involving wholesalers or drop shippers.
What Does a B2B Wholesaler Look Like?
A B2B wholesaler sells products that are not consumer-ready to other retailers that prepare the merchandise to be sold. An example of this is an industrial hydraulic hose component supplier. In this case, the B2B wholesaler sells hose connectors, clamps, fluid and lengths of uncut hose to businesses that need these components such as a hydraulic hose manufacturer or a heavy-equipment repair shop.
Specific B2B Wholesale Challenges
B2B wholesalers have run their operations through in-person purchases and phone operators for decades. With the invention of eCommerce being fairly new in comparison to how long these businesses have been operating, many have still not implemented industry standards and practices to optimize their eCommerce website.
Phone Order Customers
Many long-time customers enjoy calling in to order parts from B2B wholesalers. The phone operator guides them through the purchase process by ensuring that they will receive the exact items requested. These customers are typically older in age and do not feel comfortable ordering high-value parts via the internet without any human interaction or verbal confirmation.
Keeping track of hundreds of SKUs in a warehouse is no easy task, even for standard B2C retailers. When it comes to inventory, B2B wholesale companies encounter a unique series of challenges when selling online. For instance, suppose that a construction company orders 1,000 bags of concrete from the wholesaler on the first day of each month. Not only will the wholesaler need to have those 1,000 bags ready for pickup on the first day of each month, but they also need to ensure that nobody else is able to purchase concrete bags once the stock level hits 1,000.
Now multiply this issue across a wholesaler's entire inventory - management of inventory has the potential to become very messy!
Quantity & Account Discounts
Many wholesalers offer price discounts when a customer purchases more than X amount of a certain product. Offering these discounts over the phone is as simple as modifying the per-unit price on a purchase order form. When building an eCommerce store, these discounts must be defined and managed in a central location.
In addition to quantity discounts, many B2B wholesalers offer discounts to customer accounts that meet certain criteria. This criterion is most commonly based upon the average purchase amount or customer type. Tracking this information can prove to be tricky for some wholesalers.
Shipping & Pickup
Most B2B wholesale companies do not ship their goods to buyers using consumer-grade shipping services, like UPS, due to the large weight and size of the shipment. When businesses purchase wholesale, they typically buy a large quantity of a given item. This requires the wholesaler to ship the items on a palette and by a specialized logistics company.
In the case that the purchaser is located near the wholesaler, they may opt to pick the items up in person. This will save logistics expenses that are typically transferred to the purchasing party.
What eCommerce Tools Can B2B Wholesalers Leverage?
Offer Live Chat For Phone Order Customers
It has proven difficult to convert long-term phone ordering customers into eCommerce customers. Offering live chat is a great solution, but simply having a live chat option on your website will not be enough to satisfy these customers. Be sure to have a support team member available during business hours to resolve any issues that phone order customers may experience. If you need help implementing live chat on your website, we recommend Gorgias to manage your customer support.
Inventory Management Integrations
There are a plethora of inventory management options available today - many of which work with a variety of eCommerce platforms. Depending upon your business’s operations, you may need either an Enterprise Resource Planning (ERP) or a Product Inventory Management (PIM) integration. ERP and PIM software allow businesses to track their inventory across multiple channels. This means that B2B wholesale businesses can see when new products are due to arrive, what they currently have in stock on all platforms, as well as what has been shipped all from one single dashboard.
Individualized customer accounts have been a staple in eCommerce for years. Unfortunately, many B2B wholesalers do not take advantage of what these accounts offer. By allowing customers to reorder previous products and save their payment and shipping information, the friction that these customers often feel is nearly eliminated. Additionally, pre-defined discounts can be applied to user accounts that meet certain criteria. These discounts are great to leverage for customers who get regular discounts on a series of items such as a repair center or industry partner.
Most eCommerce platforms allow website administrators to define the logic that would apply a discount to a customer's purchase. For example, if a customer buys more than $1,000 of a product, the logic would then automatically apply a 10% discount. If a customer purchases more than $10,000 of the same product, the logic would automatically apply a 15% discount. This provides an incentive to customers to purchase more per order to decrease their per-item cost, ultimately increasing average order value.
Combining customer account discounts and quantity discounts can lead to intelligent customers discount shopping and purchasing products for less than it costs your business. Try to avoid this because you’ll lose money each time they make a purchase! To overcome this, create a matrix of pricing discounts and avoid offering discounts for more than your minimum profit margin.
B2B wholesale is an entirely different world when compared to D2C or B2C. Now that you understand a few of the specific challenges that arise in B2B wholesale, it’s time to create a frictionless experience for buyers. If you need help implementing an ERP or PIM, reach out to our team of experienced eCommerce professionals about how we can help you achieve your goals.