Could B2B Ecommerce Be Your Company's New Frontier?
Is your business missing valuable revenue methods and opportunities to cut down on your bottom-line expenses because you haven't maximized on B2B ecommerce opportunities? Derek Griffin, founder and president of Speartek, one of the country’s leading B2B ecommerce development shops, recently enlightened me on just how much money is being on the left on the table.
For 2014, Forrester research has estimated, U.S. B2B online sales revenues were about $1 trillion, and consumer ecommerce revenues, about $262 million. Those staggering statistics help illustrate how quickly B2B, or wholesale ecommerce, is being adopted.
Think your company could benefit from boosting its own B2B online orders? Check out these insights from Griffin; then, you decide.
1. Create an easy-to-use interface.
B2B buyers are ordering from a large number of vendors, and they will gravitate to the ones with the solid technology that allows them to efficiently handle orders and reorders online. Some buyers will even change vendors based on the ease of online ordering.
Explains Griffin, “We no longer live in a world where the personal relationship is the key reason someone does business with a company. Sometimes there is no relationship at all.”
2. Integrate with an accounting or ERP system.
Automating the data transfer of orders is very important in all ecommerce, for multiple reasons. “In consumer transactions, the dollar amount of the order is less, but there are far more transactions, so it helps to eliminate the data entry cost," Griffin says.
"In B2B, there aren’t as many orders, but the number of line-items can be significant, so having those orders feed into an accounting or ERP system is key.”
3. Increase cash-flow speed.
Need faster cash flow? As Griffin points out, “If the order automatically goes into the warehouse to be picked, packed and shipped, you speed up your revenue cycle in booking the sale and getting paid, improving cash flow by one to three days, depending on the organization and other automation.”
4. Make your product visible to wholesale buyers online.
Making your product accessible to wholesale buyers is just as strong a reason to get your products online. “Increased revenue from online sales is a reality, although not the only reason to pursue this," Griffin says. "Many B2B buyers research their product choices online and often find new products and lines, making buying decisions without ever seeing a product in person.
"While many buyers still attend product- and industry-related tradeshows, that is no longer the sole or even primary method of product sourcing.”
5. See operational cost savings.
“The operational cost-savings of implementing B2B ecommerce and integrating those transactions to accounting or ERP systems can give a higher return on investment than even the revenue impact,” Griffin says. "By eliminating the manual processing of orders, business owners save payroll costs, eliminate expensive order-entry errors and improve customer service.
“This does require that buyers be educated and informed that the preferred method of submitting orders is online. Even offering financial incentives or preferential treatment of orders can change customer habits.”
6. Increase your potential for scalability.
Scalability becomes a serious reality with technology. When orders flow into the system without the need for a customer service representative to enter the data or take the order over the phone, the business is able to grow its top line without additional administrative overhead, allowing the additional profit margin to fall almost entirely to the bottom line.
“We had a client grow revenue by over 20 percent," Griffin says -- noting that the actual figure was $2 million -- "without adding a single person to payroll because they had automated the order entry process.”
7. See real ROI on your development costs.
“B2B buyers may live in a procurement world by day, but they are savvy online shoppers by night," Griffin says. "They have grown accustomed to a user-friendly, customer-focused shopping experience.”
It is not enough to just have online ordering for your customers; they have to find that process easy to use. “We have built several sites that had online revenue growth rates, [increasing] from 50 percent to 500 percent in six months after launching an improved website design and ordering experience," Griffin reports.
"While this was revenue from existing customers, and not a bump in overall topline revenue, the operational cost savings paid for the project, and in some cases many times over,” he adds.
8. Consider the mobile experience.
Mobile shopping can’t be ignored, even for B2B. “Consumer ecommerce sites may have mobile users representing 30 to 50 percent of their website visits," Griffin says. "This is usually lower for B2B, but 20 percent is not unusual. And if a business had 5,000 website visits per month, that would represent 1,000 visitors that needed an experience that matches their device.
"Those stats," Griffin concludes, "must be considered in either building your next site or even adding a mobile experience to an existing one.”