E-commerce for business-to-business (B2B) transactions is on the rise. According to research, B2B e-commerce sales will reach $1.8 trillion by 2023 and account for 17% of total sales.
By launching wholesale partnerships, direct-to-consumer (DTC) merchants are paving the way; the latter of which went to Amazon. Additionally, Solo Brands, the company behind Chubbies, Oru Kayak, and Solo Stove, saw a 223.6% growth in wholesale revenue in the first quarter of 2022.
That is a significantly better growth rate than DTC, which saw a 3.3% decline. Keep reading to find out the benefits that an online platform can bring to your B2B business:
Benefits of going online
This raises a valid concern: Why are brands turning away from direct-to-consumer sales and moving toward B2B sales? Why do most B2B sales take place online, then?
The benefits of the B2B e-commerce business model are discussed in this article, whether you are a native DTC brand entering the B2B market for the first time or a traditional retailer shifting from in-person to online B2B sales.
Boost awareness of your brand
For DTC-only brands, gaining brand recognition is difficult. Your consumers’ willingness to publicly promote your products will have a big impact on the amount of exposure you receive. (Or by spending thousands on direct-to-consumer marketing; more on that later.)
However, selling through B2B channels like wholesale boosts brand recognition on a large scale. Resellers purchase your goods at wholesale costs and handle your marketing.
Your product packaging—which features your logo, brand name, and any phrases that have been registered as trademarks—appears through channels that your retail partners control, whether it’s another online store or a brick-and-mortar retail location.
Low-cost B2B Marketing
With DTC, expensive marketing or advertising campaigns are the sole way for consumers to learn about products. Playing that game is risky.
On the other side, marketing is handled on your behalf with B2B e-commerce platforms, such as Tradekey.com. Your product will be promoted by resellers to appear in storefront windows, on the shelves of big department stores, and in online marketing campaigns.
Your B2B clients always promote you on your behalf, saving you money on marketing expenses for your company.
Lower costs for acquiring customers
Obtaining B2B clients is more affordable and profitable when no marketing funds are used. This was illustrated by a bath works Shopify merchant who approached a retail establishment and asked them to carry the company’s goods.
The only resource needed for cold-pitching, a strategy that aids the company in securing significant orders on a small scale, was time. It’s a B2B sales model that DTC-only brands find difficult to scale up.
Increased order volume and value
The volume and frequency of purchases make up the main distinction between B2B and DTC clients.
B2B customers buy more frequently as well, particularly if you take help from a B2B buyer directory for finding customers. Your customers can self-serve which streamlines the ordering process. Customers frequently reorder in bulk, whether it be once daily, once weekly, or once monthly.
Consumers in industries like fashion and apparel cannot be said to be in the same situation. It’s highly uncommon for consumers to have enough disposable cash to regularly purchase goods from the same brand.
Predictable income is generated through default loyalty
Most customers who do business with you on a B2B basis do so by developing enduring connections. There is an awareness that if the product is good, the relationship may last for years, so you don’t need to keep people coming back.
For your company, this ingrained loyalty generates predictable income. The majority of firms place routine purchases to feed their consumers.
However, as opposed to DTC enterprises, which might be significantly impacted by external events like a recession or seasonal trends. Your cash flow will be more predictable, and your scaling planning skills will be more precise.
Remove the global distribution
Your firm is prepared to go worldwide with an internet presence. Starting with a single DTC front end, enter new markets. However, in practice, the logistical challenges of global expansion are costly and time-consuming.
Enter the B2B market and let your new clients handle your distribution. You might try selling wholesale to European B2B clients to enter new markets. You merely ship merchandise to one foreign site; resellers serve as your product’s distributors.
Lower operating expenses
Lower operational costs are a natural outcome of B2B orders. Fewer labels and shipping boxes are required for a single sale of more than 100 units, which results in reduced operational expenses than if you were selling each device separately to the end user.
Additionally, B2B buyers prefer self-service alternatives when making purchases online, which is another cost-saving benefit of selling in bulk via a client-focused e-commerce platform. There’s no need to spend thousands of dollars traveling to trade events, filling out orders by hand, or sending invoice reminders.
