What is B2B Commerce?

The worldwide B2B commerce market was worth $7432.12 billion in 2022 and is anticipated to soar to $36107.63 billion by the year 2031, registering a healthy annual growth rate of 19.2%!  

But, 

What’s driving this incredible growth? And what exactly is B2B commerce?

In this blog, we’ll understand what B2B commerce means, explore real-world examples (spoiler: think Samsung and Apple working together!), and learn about the different types of B2B models transforming business relationships. 

Whether you own a business or are simply intrigued by wholesale retail over the web, this guide will discuss how B2B commerce will influence the development of business for ages to come.

Sounds interesting? Let’s get started!

Understanding B2B Commerce

Let’s say you are a business owner. However, instead of selling your product to the final consumers, you sell it to other businesses. That’s B2B or Business-to-Business Commerce! It’s like a wholesale market, but online.

B2B commerce businesses predominantly deal with wholesale sales of products and services or with a custom client. 

For example, Samsung and Apple, despite being each other’s biggest competitors, work together in B2B commerce as Samsung provides a number of parts and services to Apple, including OLED displays and NAND flash memory chips. 

B2B commerce solutions ease the process. They offer tools for order processing, inventory control, and intricate pricing management. It seamlessly bridges business and enables quick exchanges in a structured manner.

Types of B2B Commerce

When we talk about B2B commerce, we do not mean just a single model. There exist multiple ways in which a business can engage and transact online. Let’s understand the various types of B2B commerce —

1. Direct-to-Business (D2B):

Think of this as a one-on-one business deal. As the name suggests, D2B involves companies directly selling their products or services to another business. Generally, D2B commerce is done on their own website or platform. It is like running your own online shop, which, in this case, serves other businesses rather than individual clients.

2. Marketplaces:

An online marketplace, much like a traditional bazaar, provides a platform where businesses can trade with each other, either by purchasing goods or supplying them. Alibaba and Amazon business are a few popular examples of such platforms. It is a smart way of helping organisations find alternative suppliers, assess the prices and place orders without following lengthy processes.

3. Procurement:

Procurement can be defined as the efficient management of the process of purchase. B2B procurement platforms for businesses automate tasks like creating purchase orders, managing suppliers, and tracking invoices. It is similar to having a virtual assistant who takes care of all your purchasing-related activities.

4. B2B2C:

This is a bit more complex. It refers to the partnership between two companies with the intent of directly selling the goods and services to the end-user. For instance, a clothing manufacturer is partnering with a retailer to sell their products online.

5. Wholesale:

The wholesale trade is usually seen as an intermediary trade. The wholesaler purchases products from the manufacturers in large quantities and sells them to the retailers at a higher cost. It is a tried and tested business practice that has existed for ages, although it too is changing with online businesses and the use of technology.

6. Manufacturer:

Manufacturers make products and sell them to other businesses. They are the fundamental component of numerous sectors making anything from electronic items to edibles.

7. Distributor:

Distributors share similar traits with wholesalers; however, they do not own the merchandise offered for sale. They merely act out the sale between the producer and the retail outlet.

Benefits of Using a B2B Commerce Platform

Here are a few key benefits that make B2B commerce an important aspect of today’s businesses —

Data-Driven Insights for Smarter Decisions

B2B platforms come with many benefits and one of them is being able to access data analytics. Such platforms are designed to collect in depth data about customers, their purchase habits, sales, stock changes and many other parameters suitable for making business decisions. After looking at this information through, it gives a possibility to see what is working and what is not, thus making the strategies very efficient.

Expanding Reach Beyond Boundaries

B2B commerce allows business expansion by helping businesses access new markets and new customers who would have otherwise been out of reach. Be it through global supplier chains or digital marketing, B2B platforms help present products to the target market over a wider audience.

Enhanced Supplier and Client Management

It is important to manage relationships with suppliers and customers since it play a significant role in the success of any business. B2B platforms make it easy by unifying supplier and customer information in one database. These applications improve relationship management, from measuring the efficiency of suppliers to keeping track of customers’ orders. All in all, allowing companies to develop strategic relationships and transact seamlessly.

Elevating the Customer Experience

B2B buyers of today demand a smooth and customer-centric experience. That is where B2B commerce platforms come in, providing features such as simple-to-use interfaces, personalised suggestions, and fast customer service. This approach, which puts the customers first, is bound to provide a better purchasing experience, turning occasional buyers into loyal partners.

Simplified Inventory and Order Management

Inventory and order management can be a logistical headache, but B2B platforms simplify this with real-time tracking and automated updates. By streamlining the flow of products from suppliers to customers, businesses can reduce errors, prevent stockouts, and ensure timely deliveries, ultimately boosting efficiency and customer satisfaction.

Lower Operational Costs

Finally, B2B platforms can help in cutting down operational costs by performing repetitive tasks using automation, decreasing the chances of human errors and reducing the amount of time spent on administrative work. This gives room for teams to concentrate on more value-adding tasks, such as strategy and growth efforts, which enhance productivity and profits.

Understanding Popular B2B Commerce Platforms

In this section, we are going to analyse some of the best platforms which are changing the way services are offered, sold and managed by organisations on the internet.

Alibaba 

When seeking to buy an unbranded product in volume or custom production, you can use Alibaba. Alibaba is a B2B website that is the biggest of its kind in China and helps businesses worldwide find suppliers of various products. With everything from ready-made products in bulk to even sourcing unique designs, this platform works well for firms looking to purchase raw materials or develop particular products. For many businesses, it’s the backbone for sourcing goods at scale from trusted suppliers.

Microsoft

For decades, Microsoft has been recognised in the technology space, with its B2B solutions being much more than those of the well-known Office Suite. Some of Microsoft’s business solutions include software licensing for Windows and Office, as well as cloud-based hosting through Azure, which is used by even the biggest micro businesses in the world. The range of tools offered by Microsoft Cloud services is highly scalable, providing fundamental productivity and cloud services for various types of business needs.

Salesforce

Salesforce redefined the B2B industry by introducing a hosted version of CRM software – SaaS. Its CRM solutions help companies monitor interaction with customers, track sales leads and manage the entire cycle of relationships with customers simply from searching for them to their buying. Their solutions are built to assist companies in handling sales processes, hence, are loved by salespeople almost everywhere.

Google 

Google’s reach goes far beyond merely being a search engine. With Google Workspace, Google offers utilities such as Docs, Sheets and Drive that help teams work together easily over the Internet. In terms of what they offer for production, Google has a Google Marketing Platform directed at digital marketers who require their services, which also includes analytics and other tools for the measurement of campaigns. Naturally, Google makes it easy for businesses to engage in targeted advertising by providing a range of advertising services.

McKesson

McKesson is the biggest US healthcare product distribution for pharmaceutical and medical device companies. McKesson, being known for the effective handling of sensitive equipment and products, distributes supplies to hospitals, clinics and even pharmacies without any hitches.

Amazon 

Even though Amazon is known as a marketplace for buying and selling goods, Amazon Business allows companies to source products from a variety of sellers, making it a convenient B2B marketplace. In addition, there is Amazon Web Services (AWS), which is a cloud service that assists companies, regardless of their size in managing their cloud infrastructure in terms of storage and processing in a flexible and scalable way.

Parting Words!

To put it simply, B2B commerce is the pillar of many sectors, aiding businesses in searching for reliable business partners, improving their functionality, and increasing their customer reach seamlessly.

No matter if you’re a startup or want to expand your already established business, utilising B2B platforms can surely transform your company for the better.

Frequently Asked Questions

1. What do you mean by B2B commerce?
B2B or Business-to-Business commerce is defined as the selling of products or services directly between businesses and not to individual customers. 

2. What is B2B with an example?
B2B commerce can be exemplified by Samsung and Apple. Samsung sells its OLED displays and a few other parts to Apple, which then uses these parts in its products.

3. What are the 4 key types of B2B?
The four key types of B2B commerce include: 

• Direct-to-Business (D2B)
• Marketplaces
• Procurement
• B2B2C (Business-to-Business-to-Consumer).

4. Is Amazon B2B eCommerce?
Yes, Amazon also serves B2B eCommerce through Amazon Business. It helps companies to buy from other businesses in bulk.

5. Is Google a B2B commerce?
Indeed, Google has multiple B2B solutions, which include Google Workspace and Google marketing platform which are cloud-based tools for business advertising and marketing.