After looking at the more traditional e-commerce models in part one of our guide, we are now going to delve into the relatively new player in town. The B2B2C e-commerce model is forcing manufacturers to reconsider their role in the supply chain. It is becoming increasingly common to blur the traditional lines between B2B and B2C supply systems. Before examining why that is happening, we need to understand what the B2B2C e-commerce marketplace is.
The business to business to consumer e-commerce model can be viewed as a combined forces approach by businesses with the ultimate goal of reaching and interacting with new markets and customers. This can be achieved through blogs, websites or portals connecting to e-commerce sites. With this method, the primary supplier pays the affiliate business for the users, leads or sales generated through their channels. The end result for the consumer is access to relevant products, while the producer increases their customer base without rattling any cages with their distributors.
In B2B2C e-commerce, a manufacturer is no longer just a manufacturer or wholesaler. By developing their own e-commerce store, they reduce the role of the middleman and take on the creative responsibility to drive sales through their own site.
On November 11th, 2018, Alibaba once again broke their own record for Single’s Day Sales, bringing in a mindblowing $30.8 billion in one day. Their own sales being aided by subsidiaries such as Lazada (co-founded by fram^’s own CEO, Christopher Beselin), also offering sizeable discounts during China’s increasingly popular anti-Valentine’s Day. With people stocking up on anything from cat food to baby strollers, giving consumers access to a wide range of markets, has seen the e-commerce giants reap huge returns.
In the more traditional e-commerce models a manufacturer often sells stock to a distributor, this could be on Amazon or through a host of other channels. The distributor will buy the inventory, charging a premium to market and distribute the product to the end user. This means the manufacturer loses control over the transactional information of the end user. There is also a loss of control over the brand and potentially the price point as the product is sold over multiple platforms and by different vendors.
If a manufacturer has their own e-commerce store that ALL sales originate in, they can maintain a close relationship with their customers and their data, while still driving sales through multiple channels.
Top B2B2C e-commerce websites work in tandem with other prongs of the supply chain, this is no zero-sum game. While the sales originate in the manufacturer’s own online store, real-time integration with the distributor allows for the third party to handle delivery of the product. While they will receive less than in traditional B2B or B2C models, they also are exposed to less risk, with no marketing responsibility or stock purchases.
The primary supplier deals directly with the customer and is billed by the distributor for delivery of the product. This can also be applied to bricks and mortar vendors who sell the product in a store, completing the sale on the manufacturer’s platform.
Having their own e-commerce store allows the business to maintain control of the overall supply chain and gives them the ability to move to an entirely direct to consumer approach if the need arises. For the consumer, money saved through reducing the role that third parties play can have a trickle-down effect, leading to reduced prices and a more personalized user experience.
For some suppliers interacting with Alibaba and Amazon is a necessity, this does not mean they must forego the benefits of the B2B2C e-commerce marketplace, it just means their own store must be integrated with the other platforms. Manufacturers can ensure they receive their fair share of their place in the market, by harnessing a range of distribution channels.
One such channel is integrating with apps through SAP technology, allowing customers to put out tenders to third party suppliers or service providers. In order to gain access to the customer’s information, the third party must confirm the sale, which will place a real-time order to the manufacturer’s own store.
It matters little who the end user is if they experience friction with an e-commerce platform they won’t convert into a sale. The software must be user-friendly and more important than ever before, mobile friendly. Customers demand speed, 24/7 accessibility, and consistency across channels and that is what top B2B2C e-commerce websites must deliver. Suggested similar product displays deliver relevant content to the consumer and allows upselling and cross-selling to boost sales and aid the sales team.
The platform itself needs an intuitive and inter-connected lay-out, with products and services appropriately grouped. It should be a very personalized experience for the user, driven by the data the manufacturer now possesses. This gives rise to a responsibility to ensure that the system’s security is tried, tested and properly certified. Accessing a broader market brings with it practical issues that the software needs to be able to handle without impacting the user experience. B2B2C e-commerce needs to capable of converting between different currencies, navigating tax implications and seamlessly available in a range of languages.
It is clear to see the draw of the B2B2C e-commerce marketplace for manufacturers and consumers alike and ultimately as more of the Nikes of this world adopt it, other players will follow the money and the customers into the market. The continued growth and adoption of the internet and mobile technology mean that consumers have a wider array of supply options at their disposal. B2B2C e-commerce can strengthen relations between clients and the source of the products and services they want. It is a mutually beneficial relationship, a happy customer is a loyal one, keeping someone loyal to your brand is a lot more cost effective than finding new customers.
It is a combined iteration of the two traditional e-commerce models, which means fundamentally the same principles govern its success or failure. None of the benefits will be attained with the wrong software, it is crucial to choose a software developer that is a specialist in e-commerce platforms and is able to offer a fully customized integrated B2B2C process.