Launching online sales capabilities for B2B vendors looks nothing like setting up an Etsy shop or, often, even jumping on the Amazon Business train. For many vendors, the hurdles to B2B eCommerce adoption can seem insurmountable.
The first step, of course, is managing the logistics of shifting from offline to online sales. But it’s only the beginning of a slew of logistical challenges that forces vendors — often small businesses — to entirely reshape the way they conduct business. Maintaining an eCommerce offering and continually supporting a positive customer experience, along with pressures unique to B2B sales, make it understandable why some vendors have, so far, been unable to step into the digital world.
Arno Ham, chief product officer at B2B eCommerce solutions provider Sana Commerce, spoke with PYMNTS about the top points of friction for vendors that prevent them from entering the eCommerce space — some of which, he said, could bar some companies from taking the leap into eCommerce right from the get-go.
“Moving [toward] online sales can seem like a large endeavor for some more traditional organizations,” he said. Suppliers may struggle with what they assume will be hefty investments to set up an online store, and ensuring that the solution can seamlessly integrate into their existing back-office ERP, accounts receivable and other systems. Ham noted that companies often predict a long-lasting, cumbersome project to move online, and can be put off by the perceived weight of sophisticated technology involved.
“In addition to the technology required, suppliers might also be concerned about the resources required to set up, maintain and handle operations for their eCommerce endeavor,” Ham said. He added that executives assume the initiative will require a lot of focus from their IT departments and drain the already limited technological and financial resources at suppliers’ disposal.
Today’s biggest trend in B2B eCommerce is to follow the path forged by consumer commerce. But Ham noted that this isn’t always going to work, considering some of the particular characteristics of corporate sales. For example, vendors often offer complicated products like factory equipment, with intricate product names and specifications. Their product catalogues can be massive, with thousands of stock keeping units (SKUs) that must be added into an online platform.
Furthermore, Ham said, while personalization is key in B2C commerce, it’s even more critical for business sales.
“B2B buyers expect to have their unique pricing, payment terms and catalogues readily available to them, whether they are shopping online or over the phone with a sales rep,” he said. “With many different accounts and agreements in place with each account, getting this experience online and done right can be a challenge — but it is a must.”
Amazon undoubtedly becomes the role model for a B2C-like business commerce experience, upping expectations not only for buyers, but for vendors to better manage sales, inventory, logistics and reconciliation. The eCommerce conglomerate has taken steps to heighten its presence in the B2B sales space, too, taking advantage of its brand power and customer trust.
After the unit expanded across Europe earlier this year, Amazon noted its B2B unit now has more than 100,000 customers in the U.K., while it reached $1 billion of revenue in the U.S. in only one year. Its growth is a testament to how corporate buyers want to shop online in their professional world, the way they already do in their personal lives.
With all of the challenges associated with setting up a B2B eCommerce store, it’s no wonder some vendors would choose to simply offer their products on the Amazon Business platform. Ham said that Amazon isn’t necessarily the bad guy in B2B eCommerce. In fact, he said, the platform can be quite useful, though the service may not address all suppliers’ needs.
“Amazon is a great marketplace to learn from,” he noted. “But Amazon comes with its limitations. For example, a business doesn’t have complete control over how the product is displayed.”
Still, Amazon certainly has a competitive edge in a lot of ways. Ham noted the company’s logistics offering, for instance. A supplier with its own online store, that struggles to maintain accurate inventory or pricing information, will be hard-pressed to compete against a platform that, in some cities, can deliver products within an hour.
He added that vendors should look to Amazon as an example, and, despite how high the company has set the bar, suppliers should surpass performance.
“In order to succeed against Amazon, businesses should leverage personalization to a deeper level than Amazon can deliver,” he said.
Doing so, far beyond online product listings, Ham explained, and vendors have to keep that in mind even after sales are made, just as much as they keep it in mind as they set up their online sales operations.
“As we continue to hear about B2B web stores mirroring B2C, eCommerce vendors have to look not only at the front-end web store, but also what’s happening after an order is completed,” he noted.
Positive customer experiences can position vendors competitively against Amazon, and support B2B commerce’s shift away from paper invoices and checks toward digitization and ePayments. The key, Ham said, is to stay “on top of the constantly evolving eCommerce trends.”