B2B e-Commerce
Munni Rani
Assistant Professor in commerce
Introduction
When companies talk about the benefits of increasing B2B e-commerce, most people think in
terms of reducing their operating costs. Early users of EDI focused on reducing the time required
to fax, e-mail and phone in purchase orders to suppliers. From there, e-commerce expanded to
electronic invoicing to reduce accounts payable expenses, advanced ship notices for simplifying
warehouse receiving, and bank integration to automate payment processes.
However, industry leading companies are starting to move beyond cost-reduction strategies with
their B2B projects towards growth-focused initiatives. These leaders are using e-commerce
services to accelerate new product launches, differentiate their service offerings and grow their
top line revenues.
Models of ecommerce
Various models exist in ecommerce, models such as business to business (B2B) which is the
range of transactions that occurs between two organizations. (Jaffrey, 2006. p 4). An example of
this model is when automobile manufacturers provide parts or services for one another via
e-hubs or oracle solutions for business to business transactions. Business to consumer (B2C) is the
interaction between businesses and consumers. The basic concept of this model is to directly sell
product online to the consumers. It’s provision of direct online interaction with the customers.
This differentiates B2C from other business models. (Jaffrey, 2006.p 4).
Consumer to business (C2B) is the exact opposite of business to consumer model, the consumers
are the sellers and businesses are the buyers, the customer sells their goods or service to business
on ecommerce websites. An example, is when individuals using istockphotos.com to upload his
or her work of art and businesses buy them (Laudon, 2010).Consumer to consumer (C2C) is the
model that gives individuals the right to act as either buyers, sellers or individuals, they make use
individual selling his television on Souq.com and another individual buying that television.
(Laudon, 2010).
E-Commerce Strengths
The Internet is now a booming industry, with the rapid advances of technology, more and more
people have access to computers and internet connections, and this has provided individuals the
medium to perform their daily activities on the world wide web(WWW), giving ecommerce the
front row advantage for suppliers and the consumers.
Global Presence and Global Choice: Ecommerce is not subjected to any form of geographical or
nationalized borders; it is however defined by the coverage of the computer network, this has
given the littlest of suppliers the medium to conduct business on a global scale and given them
global presence. Customers are provided with a wide range of suppliers to choose from
regardless of geographical locations (Scheinder, 2010).
Mass customization and personalization: Ecommerce gives suppliers the medium to acquire
detailed information from their customers and they instantly modify their products and services to suite their customers’ needs. Customers know what they want, ecommerce has given customers a direct communication chain to the supplier, from which the customer can give
personal directives on the product.
B2B STRATEGIES
1. Enrich the commercial process
For B2C businesses, ecommerce often starts with the addition of an online shopping cart. For
most B2B businesses, however, doing business is a matter of personal involvement, not
just automation. Large product catalogs, product configuration needs, unique terms of purchase,
custom pricing, and higher price points equate to a lot of personal attention—something a B2C
shopping cart alone can not replace.
But much of this personal involvement is dedicated to menial tasks —from handling nitty-gritty
can and should be automated. By expanding upon the traditional shopping cart approach, B2B
ecommerce solutions consider speed and quality throughout the end-to-end commercial process,
allowing businesses to reduce the amount of time spent on menial tasks, and offer customers
information in a more convenient and comprehensive way.
2. Enable interactions first; transactions second
Even the most complex B2C purchases, such as automobiles and major appliances, are usually
handled by only one or two people and, at most, require a couple of face-to-face meetings. But
most consumer purchases are far less involved.
In a B2B context, the term "interaction" describes a more complex sequence of steps than a
transaction. Enabling an interaction produces value that enabling a transaction cannot.
Identifying the right product specifications and commercial components for a customer, for
instance, requires consultation beyond what's found in a standard FAQ section or within user
reviews.
When a provider of construction equipment sells to a construction company through a dealer, for
instance, multiple parties are involved in a series of conversations necessary to specify the
applicable maintenance contracts.
3. Reducing complexity is more important than gathering information
B2C businesses, ecommerce represents an opportunity to gather information that informs
decisions on product features, pricing and promotion. The opportunity to gather data is also
available to B2B businesses, but in a relationship-centric world, the first objective is to increase
value to customers.
When it comes to making a decision between collecting data about customers and keeping it
simple for them, B2B businesses must choose in favor of keeping simplicity first and gathering
information second. This decision manifests in the real world often when it comes to offering
customers and prospects gated content in exchange for contact information.
One such example is a B2B high-tech supplier that, as one part of their ecommerce solution,
required prospective customers to provide information before ordering a trial of their product.
In B2C businesses, customers have access to information about products, their personal
information on file, their order history, and other related information. That's a great start, but
many B2B businesses have the opportunity to deliver more value by providing more information
such as maintenance and service records, contract and correspondence history, information about
customer installations, product roadmaps, and lead time.
In some cases, such as installation maintenance locations, customers may get value from
maintaining the information themselves. B2B businesses can use these information resources to
efficiently differentiate and personalize their customers' experience.
5. Evolve your offering to engage the market
In a B2C businesses, once an ecommerce solution is in operation, self-service ordering on line
allows customers over an endless geography to place orders with little marginal cost to the B2C
provider.
In a B2B setting, similar benefits can be achieved by making a simple portion of the overall
offering available as a "starter" or "entry level offer" for prospective customers. Current
customers may value an option of buying simple product extensions or contract renewals on line.
The efficiency of these simple on line transactions is a benefit to both the B2B business and to its
customers.
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