Manufacturer’s Dominate B2B eCommerce

Olivia Scala

Manufacturing companies have a lot of responsibilities but one of the more important ones is utilizing software systems for B2B eCommerce sales. This is today’s secret to manufacturers growth in sales and operational cost cuts. Before B2B eCommerce, large companies had sales reps going door-to-door to business’s constructing piles of paper advertisements to distribute all over adjacent cities. This allowed companies to advertise themselves and create well known brand awareness to surrounding businesses while hopefully gaining new business. Sound about right? Now that eCommerce platforms have been implemented within a large amount of manufacturing businesses, there is less paper and door to door advertising, and thus time gets saved, and eventually so does money.
b2b_ecomm_cycle
 
According to Internet Retailer, the top manufacturers account for over 478 billion of the total 547 billion done among the top 300 B2B US eCommerce websites. Therefore it can be estimated that of the remaining 233 billion, manufacturers are still the main player of these B2B eCommerce sales. Simply put, manufacturers dominate B2B eCommerce relative to distributors, retailers, and wholesalers.

Manufacturer’s Positive Increase Upon Launching eCommerce Systems

As eCommerce has grown more and more popular within the past five years, the main concern among manufactures were the outcomes being created by eCommerce and how much they needed to dish out in order to get results that they were happy with. When a product or service is ordered online, it is easy enough to get distracted by all the “other recommended products” and advertisements that surround the main page being scrolled through. This is where online shopping and larger manufacturer’s can influence companies to spend more than they had initially anticipated based on things such as “prior searches”.
Lets say a business is looking to purchase a large order of winter jackets. The manufacturer’s platform can suggests that your business buys the matching hat/glove set to go with the jackets. If your business decides to go through with the extra purchase within the next 12 hours you’d get a discount on the bulk jacket order. Would you, as a buyer, be pressured into making the larger purchase on top of what your business is already considered to be a large purchase [of just winter coats]? Whether the bait is taken or not, the fact that the option is given makes you want it, subconsciously. According to Harvard Business School professor Gerald Zaltman, 95 percent of our purchase decision making takes place in the subconscious mind. So, being a B2B eCommerce company, you will benefit from leveraging such techniques to influence buying subconsciously.
These sort of techniques seem to benefit manufactures most, because they have unique brands more so than distributors, wholesalers, and retailers in which consumers can get their products at other places. Thus, the appeal of related products becomes much higher when you know only this manufacturer makes this unique product set versus a distributor who does not have that uniqueness. This could be part of why manufacturers continue to dominate B2B eCommerce.


For most Manufacturers to succeed with B2B eCommerce they must utilize an existing eCommerce platform to spring board their operations. Here are some of the most used B2B eCommerce platforms.

Popular B2B eCommerce Platforms


Future Success
Omni-Channel Commerce: The B2B industry is rapidly changing on a daily basis with upgraded features, relocations, and traction of new clients. Now this isn’t totally new to businesses, being able to shop on mobile devices etc… but what manufacturer’s have been forced to improve on is their ability to provide true Omni-channel eCommerce services. In other words, the ability to set up a website and marketing strategies in a format that is the same across all devices and online channels is a major key in todays digital market. This is convenient for both the sellers and the businesses buying those products because most companies don’t have time to have a manager sitting behind a desktop computer making the actual transactions all day long. Having good omni-channel systems in place allows the selling companies to access the buyers request wherever they are.
B2B Omni-Channel eCommerce
Managers have become more reliant on mobile devices such as iPhones, Androids, tablets, iPads, etc to make business purchases. This kind of flexibility is attractive and is a growing industry. According to Kaspersky Lab and B2B International “over 30% of companies use mobile devices to access corporate bank accounts and to make financial transactions.” Looking down the line, eCommerce platforms are looking to bring in more personalized aspects to the online audience such as automated pricing optimization, more specific personalized recommendations, and access to the new mobile devices being invented such as the Apple Watch.

Facts: B2B eCommerce

Manufacturer’s-Dominate-B2B-eCommerce_Infographic
So why are manufactures dominating B2B eCommerce? It seems that they reap the most benefits relative to other types of business to business companies. It might also be that they can afford to do it right, in addition to doing both direct B2C and B2B online, increasing their online potential. Here are some of the benefits that lead to manufacturers selling the most to other businesses online.

Benefits

Convenience: is an overwhelming beneficial factor when it comes to B2B eCommerce because it saves the manufacturing companies time and when time is accounted for and cut short, money is saved. When business’s are able to make a purchase right from their desk, that is really attractive. Behind this purchase though is a long line of production in order to get the product to the buyer. Now because eCommerce B2B transactions allow companies to make a purchase without having to go look at the product or service in person, they have to be able to compensate for the other convenience goods purchases businesses may have made if actually physically being in the setting of a product or service.
Leading to Brand Awareness: As soon as a business can identify their need for a product, they will then start to do the research on the best products that fit their budget. Manufacturing company’s being able to advertise their product or service digitally is great and all, but when they are able to take it to the next level and sell that product online, and make the highest possible profit margin, well that’s the huge benefit. That means business’s were able reach more buyers and use the fact that they are an eCommerce run business to bring in more brand awareness. Once a company is able to advertise in ways such as content, blogging, to online and mobile marketing, the closer they are to advancing and passing competitors that are still on a “sign the paper contract” system.
Reduce Transactions Cost: Being able to cut down on costs, by ordering a product electronically is one of the most obvious reasons why so many businesses today are choosing to switch over to B2B eCommerce. Once the buyer places an order, the manufacture relays the message to the order fulfillment team and then the rest falls into place. By doing so the cost of the transaction is minimized with an automated contracted document or agreement between companies, which makes it easier for the streamlined processes to progress at rapid movement without any confusion. This entire process in itself saves both companies time (being on the phone or even being put on hold while trying to place an order, being on the road, or having to travel to the buyers company are all time consuming), which leads to a result of saving money in reduced transaction costs.

Challenges

Causes Employee Cuts: Although this isn’t a dramatic obstacle, there is still something to talk about here when it comes to the jobs of the people. B2B eCommerce is done electronically, usually on a computer, and that some times eliminates the need for an employee here and there. Looking into the future, according to “Death of a (B2B) Salesman,” by Forrester e-business analyst Andy Hoar, “projects that 1 million sales reps, or 22% of the 4.5 million B2B sales agents now in the United States, will lose their jobs to e-commerce by 2020.” This will have to be taken seriously because although 2020 isn’t within the next year or so, it is going to creep up on business’s fast, and all of a sudden close to 1 million families will have (most likely) a prime care provider out of a job.

Source: www.internetretailer.com

No Personal Contact: (to build relationships): Being a sales person in the past, I think I can speak for all of us when I say that building a relationship isn’t always about a good price point, or making the quarterly goals. No, it’s really about being able to connect with buyers in order to make the transactions as enjoyable as possible so that in the future, they will want to come back for a second purchase, that is an advantage that B2C has over B2B. By building a strong face-to-face relationship, if you have what the buyer is looking for, even if the price is a little bit higher, the consumer will have no issue signing on with your company because they will trust you. With eCommerce, you don’t get to build up that trust with anyone except with a computer screen for the most part.
Streamlined Process: The buyer’s management is usually the one that is inputting product data into the purchase system online. So if a mistake were to take place, it isn’t usually the buyers fault, it usually comes internally from the manufacturer’s such as a partial order getting misplaced or even having an order never actually shipping out in the first place. The streamline process is tricky because it’s so efficient for eCommerce.  There are small things here and there that can really mess it up and make the time that was supposed to be saved a much longer drawn out process due to having to reorder products.

Leave a Comment

Share this post

Related Posts

See all posts