The B2B e-commerce channel is projected to reach $1.2 trillion by 2021. 83% of B2B merchants that don’t currently sell online today plan to do so in the next two years.
Why? E-commerce provides obvious and hidden benefits that are realized across all industries.
Greater Share of Wallet From Existing Customers
Buyers want to purchase items via the web regardless of channel. Business buyers are migrating to digital, and e-commerce platforms are enabling manufacturers, brands, and distributors to showcase their complete catalog of products. By tapping the power of artificial intelligence and predictive analytics, sellers are able to expose new, relevant products and drive increases in order size.
By enabling your customers to buy when and where they want, you can reduce friction, increase sales within your base and provide them (your customers) with an ideal buying experience that meets their needs and keeps them coming back to buy more.
New Revenue From New Customers
Having an e-commerce site is the fastest way to identify and grow new markets. B2B customers use the web to research new products and competitors, just like the consumer markets. If you’re not showing up in their research, you’re missing out on new customers. In some cases, you might not even know the market exists.
A great example comes from Mountz, a leading manufacturer of precision torque wrenches, fasteners, and sensors for the aeronautics industry. As it turns out, precision torque tools are also incredibly important to high-end bicycle enthusiasts. When they started to see online orders coming in from bicycle shops, they dug deeper and found a new market worth millions in additional revenue.
Enabling New Efficiencies
The more you can provide a self-service buying channel and automate for your customers, the more time your employees can spend on tasks that drive incremental new business. In today’s market, the best e-commerce platforms enable this self-service model that allows customers to review pricing or quotes, get delivery schedules, check order status, and find support without ever picking up the phone.
One company that makes high-end computer numeric control (CNC) machines achieved record breaking customer satisfaction scores and double digit growth by providing self-service automation with a new and reimagined website. This also allowed them to more strategically utilize their existing sales team which was not being utilized as efficiently as they needed. The company reduced the amount of idle time and refocused their sales team on deepening relationships with customers to uncover additional opportunities, add more value and generate more upsells.
Higher Gross Margins
E-commerce is supposed to drive prices down, right? Not necessarily. Speed and convenience are more important to business buyers than price. If you can make your buyer’s job easier they’re happy to simply order online instead of calling to negotiate price. In fact, most B2B sellers use custom pricing tables to reward buyers with volume discounts. This is all done without the need of a sales representative.
We see clients generating as much as 5% incremental gross margins on sales completed online vs. offline channels. That has a direct impact on the bottom line.
E-commerce isn’t pie in the sky; it’s the new competitive imperative. Some Guidance clients see revenue increases of 50% or more through digital commerce. The B2B market has taken notice and although significantly behind B2C, they see and understand the business imperative and are making the necessary investments to build out e-commerce. For those that continue to wait, they are at a significant competitive disadvantage and risk becoming irrelevant as more and more time goes by.
E-commerce platforms and highly experienced implementation partners will help your company realize all of the benefits of B2B e-commerce both now and in the future.