It has been a couple of weeks since I returned from the Internet Retailer Web Design show in Orlando. It’s a nice show – it’s a lot smaller than the main IRCE show in June – with only one stream – so it’s easy to see all the great presentations without missing any. I love the opportunity to educate myself on what’s happening in the industry and to spend time talking to the people that are making ecommerce happen.
One thing I noticed at this show is that there seemed to be a lot of businesses attending that sell to businesses rather than consumers. One of the keynotes was from Paul Miller, VP of E-Commerce at Grainger who provide products to facilities. It’s a serious business: $6B of revenue, $2B of that on line. Many of the other attendees were also B2B companies. One of them that I was chatting to said that the presentation he had just seen that was talking about selling underwear wasn’t that relevant to his business. That got me thinking about the difference between B2B and B2C ecommerce.
Different prices for different customers
One thing we’ve seen with our B2B customers is they will often have different prices for different customers based on their login. Larger customers often negotiate lower prices based on buying commitments for example. When this happens the online retailer needs to work out what price they should show, if any, to people that aren’t logged in. We are exposed to this, because we need to make sure that if we’re showing prices in the search and navigation that they match those that are shown on the rest of the site – so this involves a more complex integration.
Different purchasing process
The purchasing process on a B2C site is comparatively straightforward: the consumer puts in their credit card and other details and the sale is complete. On a B2B site the purchasing process may be more complex – the person who decides what they want may be different from the person who makes the purchase – there may be a procurement department that actually does the buying. The payment may be done through an account which is invoiced to the customer at a later date, particularly for large purchases. Paul described that Grainger customers have an account manager who approves the purchase orders when they come through. They have developed an iPhone app so the account managers can approve these easily when they’re away from their desk.
Lower traffic and larger AOV
B2B customers often make relatively large orders – so a B2B site that value of sales as a B2C site may have much less traffic. The lower traffic can mean it’s more difficult for multivariate tests to reach statistically significant decisions.
These are just a few differences between B2B and B2C ecommerce that I’ve come up with. What others are you aware of?
One thought to “Differences between B2B and B2C e-commerce”
There are a few other differences that we come across:
1 – Real time availability is required…or “available to promise date” if not in inventory. This is critical in the B2B environment.
2 – Payment terms – B2B transactions may or not be paid during checkout. Most of the transactions that we see are Purchase Order based.
3 – Shipping terms and conditions – Our B2B customers use way more than FedX and UPS for their shipping suppliers.
4 – Invoice payments – B2B customers end up having many invoices that they like to aggregate for payment every month. Doing that online is a growing requirement.
5 – Fast order entry – B2B customers don’t like to “browse and shop”. Most of them are professional buyers who want to upload spreadsheets, key in part numbers and quantities etc. While that’s changing over time, most B2B customers are still hardcore.
6 – In the SAP world that we live in, a huge difference between B2C and B2B is that SAP doesn’t really want to keep track of each individual customer in the Customer Master file, whereas if you’re a B2B customer and don’t have a record in the Customer Master you can’t buy product.
There are other differences, but these are the biggies 🙂
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