B2B e-commerce

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B2B e-commerce, short for business-to-business electronic commerce, is the sale of

goods or services between businesses via an online sales portal. In general, it is used
to improve the efficiency and effectiveness of a company's sales efforts. Instead of
receiving orders using human assets (sales reps) manually – by telephone or e-mail –
orders are received digitally, reducing overhead costs. [1]

Contents

 1Definition
o 1.1The differences between business-to-consumer (B2C) and business-to-business
(B2B)
o 1.2B2B buyer characteristics
o 1.3The differences between B2B e-commerce and EDI
 2Market development and trends
o 2.1Integrated B2B e-commerce versus interfaced e-commerce
o 2.2Mobile
 3See also
 4References

Definition[edit]
The differences between business-to-consumer (B2C) and
business-to-business (B2B)[edit]
B2B and B2C e-commerce may look the same, they are quite different. Business buyers
and retail consumers have different purchasing needs. The differences can be: [2]

 Buying Impulsively vs. Buying Rationally - B2C buyers will buy on impulse and
make one-off purchases, B2B buyers plan for purchases and make recurring
purchases
 Single Decision Maker vs. Multiple Decision Makers - B2C purchases are
decided upon by the buyer, B2B purchases often involve several layers of approval
and may involve different departments
 Short-term Customer Relationship vs. Long-term Customer Relationship - B2C
purchases are often one-off purchases, B2B purchases are based on long-term and
on-going relationships.
 Set, Fixed Prices vs. Diverse Prices - B2C prices are generally not negotiable.
B2B prices are usually negotiated individually.
 Pre-Delivery Payment vs. Post-Delivery Payment - B2C e-Commerce is generally
paid by credit card, debit card or PayPal before the goods are shipped in B2B
payment is often on terms and may be 30 or more days after goods are shipped.
 Deliveries focused on speed vs. Deliveries focused on punctuality [3] - B2C buyers
are looking for speed of delivery and B2B buyers want deliveries on a reliable
schedule. [2]
B2B buyer characteristics[edit]
Supply chains are more important to B2B transactions.[4] Manufacturing companies
obtain components or raw materials from other companies and then sell to
a wholesaler, distributor, or retail customer. For example, an automobile manufacturer
makes several B2B transactions such as buying tires, glass for windscreens, and rubber
hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a
single B2C transaction.[5] Wholesalers and distributors still have a supply chain, but their
chain consists of finished products.
Generally, B2B and B2C web stores both have search, navigation, detailed product
information and personal account history pages. However, in some ways B2B greatly
differs from B2C. Most B2B businesses have complex ordering processes, large
collections of attributes and elaborate back-end systems. Moreover, in a B2B scenario,
buying is part the customers’ job. He needs to make sure he buys all necessary
products or components for keeping his company up and running. Thirdly, since
organizations can be very large, they need a lot of products or components to keep their
business going.[6] Therefore, B2B buyers often place large orders. B2B purchases are
also characterized by recurring orders instead of single purchases. Because of that,
companies make deals based on their monthly or even yearly demand. They closely
collaborate with each other, and each B2B customer can have its specific prices for
certain products. Lastly, multiple people are involved in B2B purchases. For instance, a
company can have multiple buyers or buying centers. They are responsible for finding
the right products and making the right deal with resellers. Because multiple people are
involved in a single deal, B2B is more fact based instead of based on emotions. It's not
about the nicest packaging, but the best deal for the company. In general, ratio is
leading.[7]
The characteristics mentioned above can be summarized as follows:

B2C B2B

Single buyer Multiple Decision Makers

Fixed consumer prices Customer specific prices

Direct payments Payment on credit sales

Stocks (for a.s.a.p

Smart shipments (i.e. truckloads)
shipments)

Low frequency purchases Reoccurring purchases

Single visits Long lasting relationship between customer and manufacturer

Buying because you like

Buying as part of the job
it

Buyers as part of an organization with a relationship defined by a contract,

Consumer
terms and conditions

The differences between B2B e-commerce and EDI[edit]

B2B transactions can be processed online in various ways, of which Electronic Data
Interchange (EDI) and B2B e-commerce are most often used. Although EDI and B2B e-
commerce both have their own, distinctive features, they are frequently confused. [8]
EDI is the electronic transfer of purchasing information between the buyer and seller.
EDI transmits the information from the buyers purchase order to the seller's sales or
customer service department for conversion to a sales order. EDI is well suited for
placing large, recurring orders to supplying raw materials to manufacturers. [9] For
instance, following the example above, an automobile manufacturer regularly needs to
order a specific brand and size of tires for a certain car model. When manufacturing a
certain number of that type of car, the buyers can use EDI to place an order for the
number of tires needed. So, the seller need not worry about providing product
information – like a description, images or pricing –for reordering purposes. [10]
Although, like EDI, sales orders are processed online, with B2B e-commerce it is
possible for customers to order occasionally and in irregular order quantities. Also, B2B
e-commerce enables the display of many different types of detailed figures and images.
It is possible to exhibit a full range of products or parts. Therefore, a web store provides
the opportunity to cross- and upsell.[9]

Market development and trends[edit]

The B2B e-commerce market is changing fast. There is an increasing number of
companies adding an online sales channel to their business. In 2014, 63% of industrial
supplies buyers purchased their products online (UPC, 2014). It is expected that in the
USA, the B2B e-commerce market will even grow from $780B in 2015 to $1.1T in
2020 [11] it is an objective of European Union Enterprise policy to "enhance trust and
confidence" in B2B electronic markets.[12]
Integrated B2B e-commerce versus interfaced e-commerce[edit]
With integrated e-commerce, part of the software solution is installed inside
the ERP back-end system. This means that the connection between the business logic
and database of a back-end system is configured automatically. Information that is
available in the back-end system, for example article numbers, prices and current stock
availability of products, is leveraged, without being copied to another system, and
displayed in the front/back end of the e-commerce system. An integrated e-commerce
software solution thus does not require investments in recreating and maintaining a
separate database or business logic. Instead, it re-uses those of the back-end system,
so all data are stored in one, single place. This can prevent input redundancy, errors
and synchronization time.
In most cases, integrated e-commerce is in one way or another acknowledged by the
supplier of the back-end system, such as SAP ERP or Microsoft Dynamics. Although
many B2B e-commerce suppliers claim to be integrated, most web stores are
interfaced. With interfaced e-commerce, the software solution is installed on top of the
back-end system. This means that the connection between the business logic and
database of a back-end system is set up manually. Information that is available in the
back-end system is being duplicated into the e-commerce software. An interfaced e-
commerce software product thus has their own database and business logic that are
being synchronized constantly through a connection to a certain back-end system.
Mobile[edit]
See also: Mobile Commerce
The phrase mobile commerce was originally coined in 1997 by Kevin Duffey at the
launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic
commerce capabilities directly into the consumer's hand, anywhere, via wireless
technology."[13] Mobile e-commerce for B2B is becoming increasingly popular. [14] B2B has
features different from mobile e-commerce for B2C. Whereas B2C is mostly classic
catalogue browsing, mobile e-commerce for B2B requires specific features, which
include:

 Displayed prices that are customer specific;

 Stock indication that is always up-to-date;
 Discounts that are calculated real-time;
 Orders can be placed quickly, for example with order histories or lists based on
filtered product sets;
 Sales agents should be able to represent their customers.