Loading

Blog

Advantages and Disadvantages of the B2B E-commerce Model

Advantages and Disadvantages of the B2B E-commerce Model

Advantages and Disadvantages of the B2B E-commerce Model

w3nuts

B2B ecommerce has been around for a long time, but it hasn’t always been pretty. In fact, for most of the early 2000’s B2B ecommerce was difficult to navigate and not functional, at least not in a way that invited opportunity. B2B ecommerce did not embrace technology as quickly as the retail world did, and that may be in part because B2B ecommerce orders tend to be larger than a standard retail order. Thus, there was little need for evolved ecommerce platforms.

Today we offer evolved ecommerce platforms that, unlike the predecessors, are public spaces. No longer are B2B suppliers hiding in the shadows, trying to maintain privacy and keep their goods a secret. Now, most information is available for the public to see, including their competitors. These days you build an ecommerce website with an ecommerce ready website template. Of course, this also allows for search engine optimization as well. With the recent growth of B2B ecommerce, it would seem that the time is ideal for those interested in getting started, however it’s not without its disadvantages.

Alternatives to B2B Ecommerce

With B2B ecommerce businesses have the ability to sell products and services online, through a sales portal. Without B2B ecommerce businesses would be less efficient, as they would have to take orders via telephone or email. While this is an ideal business model for some, there are other available business models to consider:

  1. Business to consumer (B2C): Think of this as your average retail store, but online. The business in this instance is selling directly to the consumer. It can range from big box sale online retailers to individually owned online retailers.
  2. Consumer to consumer (C2C): This type of business model generally consists of a business creating a platform to bring buyers and sellers together. A well-known example of a C2C site is eBay.
  3. Consumer to business (C2B): Commonly found with hand made items or digitally made items, this is a reversal of the sales process. With this business model the consumer is reversing the sale process. Crowdsourcing is a common form of this business model.

Advantages of B2B Ecommerce

The advantages of the B2B ecommerce model are numerous. In fact, with the constant evolution of this business model there are new advantages coming to the surface all the time. Consider this, in this day and age our target customer base is quickly becoming millennials. Millennials are comfortable with the digital age, and they want to do business online. B2B ecommerce satisfies that need. Let’s consider other advantages of the B2B business model:

  • Bigger sales with bigger values
  • Partnerships with retailers that result in regular orders.
  • Long term customer relationships
  • Lower costs of operation resulting from being able to operate in bulk.
  • Data centric process that drive effective supply chain management

Disadvantages of B2B Ecommerce

Disadvantages of B2B are obstacles, but ones that can be overcome. A little bit of innovation and determination can overcome these disadvantages. One of the most commonly recognized disadvantages is the limited market that many B2B ecommerce sites face. Especially when those are small niche businesses. It can be more difficult to capture the attention of those target customers. Other disadvantages aren’t as universal, but need to be taken into consideration.

  • Customers may make more demands, from pricing to customization.
  • Businesses often have to please a set of buyers leading to a longer buying process.
  • It is infinitely more difficult to use digital marketing for a B2B than it is for a B2C.
  • There may be more time between sales.

Difference Between B2B and B2C Ecommerce

The differences between B2B ecommerce models and B2C ecommerce are substantial, in unexpected ways. First of all, B2C purchases are largely emotional. It satisfies a need in a consumer, where B2B purchases are largely planned out to fill a departmental need within the company. There’s also a difference when it comes to satisfying the needs of a customer. While B2C customers base their decisions on whether or not it will meet their personal needs, B2B customers need to have all of the information.

They are going to have to represent their product on their site and in their stores, so they need to have all of the available information in order to make an educated decision. This can be more time consuming, and also result in a longer decision-making process. With B2B there is also a difference in the amount of time that a business has a relationship with a buyer. For instance, a B2B business will often have a relationship with a buyer for a number of years, but a B2C business will only have a sporadic relationship with a business.

Either Way Works

There are numerous options when it comes to building a business, and each one has its own advantages and disadvantages. It really requires taking stock in what in important to you as your business grows. Do you want higher customer turnover, with the potential for larger profits? Or would you rather have slightly smaller profits, but longer relationships with your customer’s higher consumer loyalty?

Evaluating the advantages and disadvantages of these types of businesses are essential to determining the type of business you want. Ultimately the key to building a successful business boils down to three key things: having a good product, a good process, and good marketing.

If you’re a B2B or B2C company that needs help with their ecommerce design or processes, then reach out to experts like W3Nuts that have a great reputation in helping commerce companies reach their goals.

 

Let's Talk

We'd love to answer any questions you may have. Contact us and discuss your business objectives & we will let you know how we can help along with a Free Quote.