B2B Payments

Suppliers Go Direct, Go Digital To Stand Out From The Crowd

As businesses like Amazon further creep into the world of B2B commerce, suppliers often find themselves on unstable ground.

According to Adrien Nussenbaum, CEO and co-founder of B2B eCommerce solutions provider Mirakl, you don't have to look much further than Amazon's Alexa to understand why.

"I was at a conference, and someone was doing a demo with Alexa," he recently told PYMNTS. "He said, 'Alexa, please buy batteries.' Alexa's response was, 'Here are the best selling products for batteries.' And everything Alexa was proposing were Amazon Basics-branded. If you're another brand, you're left out of the buying process."

For suppliers looking to begin selling online, the competition is now fiercer than ever. Cutting through the noise to reach buyers can be overwhelming.

"That's where there's a need for suppliers to go direct," Nussenbaum said, "and to do it intelligently."

Mirakl helps suppliers take this direct approach to connect potential buyers with the online shopping experience they crave. Nussenbaum explained that this is a critical evolution in B2B trade for a few reasons. One is that this is what buyers demand.

"Because of the way they are evolving in their private lives, B2B buyers are much more digital," the executive said. "Buyers expect to be able to have a transactional experience with their suppliers."

Ultimately, the supplier is the "source of truth" for buyers when it comes to accurate pricing and product information, which entices them to work directly with sellers like manufacturers. But suppliers have their own motivations to not only launch an eMarketplace, but also provide one that meets their suppliers' eCommerce needs, too.

"Suppliers are in a world where, because of how digital their customers are, they have easier access to competitive products," Nussenbaum said.

Traditionally, B2B sales were quite organized, the CEO explained. Buyers would go to trade shows and work directly with field representatives to transact. "The life of a B2B buyer was originated around a lot of offline moments," Nussenbaum noted.

But new channels like Amazon Business have disrupted the status quo, and suppliers on these portals are not guaranteed visibility to potential customers. Plus, these platforms can mean suppliers aren't able to set themselves apart from other vendors with similar products. A single interface means buyers don't have insight into, for instance, the research and development that goes into one supplier's products compared to another's.

Launching an eMarketplace also means suppliers have access to critical buyer data, Nussenbaum added, and the opportunity to offer unique services and products to differentiate themselves from the competition.

Take the battery market again, for instance. Procurement officials may just grab the top result that pops up on Amazon when buying batteries, and unless a manufacturer builds batteries for a very niche market, they will have to find another way to stand out.

"If you're selling batteries for equipment, it makes sense for you to protect yourself from the competition by building an ecosystem in which you potentially tie that product with other services or complimentary products," Nussenbaum explained, adding that often times, suppliers aren't able to do so when selling through an aggregated marketplace like Amazon Business.

Payments features via third-party FinTechs can be a great way to ensure customer satisfaction, and according to Nussenbaum, B2B payments companies have begun to jump at the opportunity to develop solutions for these emerging platforms as more suppliers go digital and direct.

"The ecosystem of companies has grown to offer services around payments," he said. "They are building solutions to facilitate B2B payments in the context of B2B marketplaces, and they're bringing fluidity to the overall process."

According to Mirakl, B2B traders are witnessing a "spring" of B2B marketplaces. But the evolution of B2B commerce continues.

"The more B2B companies embrace digital, the more it results in a transformation of the value chain," Nussenbaum said.

To the CEO, value chains are a set of many, many arrows facing multiple directions, with players across supply chains all operating in their proprietary ways.

"eMarketplaces offer the ability to regroup these arrows and create more ecosystems," he continued. "It's realizing the fact that digital breaks the longtime established barriers that resulted in a very fragmented and intermediated value chain to create more open ecosystems."



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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