B2B transactions are the behind-the-scenes processes that keep businesses operating and supply chains moving. Although generally ‘out of sight, out of mind’ where consumers are concerned, without B2B transactions, there would be no B2C.
What is B2B? The simplest definition is a transaction between businesses, as compared with a B2C business (business to consumer).
B2B transactions are common in a supply chain, where companies purchase the raw materials and infrastructure required for the manufacturing process from a variety of suppliers and providers all over the world. These could be tires or batteries in the case of the automotive industry, computer chips in the case of consumer technology, or even services like cleaning in the case of a large property manager. The key here is the businesses are dealing with each other, not with an individual consumer.
A B2B transaction has some key differences when compared with B2C (business to consumer). In a B2B business model, there is room for negotiation between the parties. As they both benefit from the transaction, it’s in the best interests of both to make the business relationship easy and financially appealing.
These days, regardless of what a business sells, many B2B transactions happen in an online setting. Whereas previously parts may have been purchased from a company across town, it’s far more likely that these components are now coming from suppliers all over the world. Globalization has entirely changed what the supply chain looks like, and how it functions.
This dynamic global marketplace requires a very different approach to marketing than one would use to attract local customers. Company websites, and in particular ecommerce websites for ecommerce businesses are your showroom and need to prove to your customer that you are the right choice for their business needs. Many businesses are directly competing with websites like Amazon and Alibaba for B2B customers.
Without a strong internet presence, customers won’t be able to find you, or navigate what your company brings to the table. A website must be immaculately designed, functional, regularly updated, and have effective SEO (so you’re visible in the first place). Keyword targeted marketing is extremely important in pushing your website to the top of what may be a long list of competitors.
As a B2B company, analyzing your sales funnel is a way to optimize your sales and marketing by identifying how well you convert visitors to your website into customers. At the top of the funnel is awareness: and this comes from the marketing which initially attracts business to your website. In the case of a B2B e-commerce company, this may be via social media, word of mouth, or a google search leading to your landing page.
Does your landing page clearly identify your brand and what you do? What are the benefits of your goods or services, and why should customers be choosing you over your competitors? You need visitors to your landing page to be engaged enough to click through and learn more about what you do, and why they should buy from you.
The second step in the sales funnel is interest. Show them you know your stuff, without aggressively trying to make a sale on the spot. Create content that engages the reader and compels them to learn more about your business. Write regular blog posts. Link to relevant articles in the media. Track the marketing strategies that are effectively creating interest. A good example is email marketing. This can be a highly effective marketing campaign or an investment with poor returns.
Third comes decision-making. The customer is ready to buy—you need to make it plainly obvious that they should be buying from you, and not your competitor. Supply Chain Finance and Dynamic Discounting can come into play here. Provide decision-makers with convenient options to connect with you: phone calls, emails, and website-based chat. Find out about their needs, and make sure the customer is talking to the right person to answer their specific questions, making the process seamless. Show that you value their business and working with your business will benefit them.
The final stage is action—the prospect becomes a B2B customer, then potentially a long-term, repeat customer. Laying solid foundations creates ongoing profitable business relationships. This is a place where customer experience is crucial. Difficulties during checkout for an online store may lose business. By carefully examining where potential customers are checking out of the funnel, your business can make improvements and increase engagement and sales.
A clear difference between B2B sales and B2C transactions is the sheer amount of money changing hands. This is not a consumer buying a $25 decorative cushion from a homewares store. A B2B transaction might look like an international hotel chain buying 10 000 cushions. Larger purchase sizes and larger dollar amounts mean the logistics become more complicated. Fintech solutions can be harnessed here to smooth out the many stages of these transactions.
B2B encompasses a diverse range of goods and services. The primary B2B market deals in raw materials. Farming, oil and gas, mining. The secondary market takes these raw materials and manufactures them into goods—adding value to these raw materials and creating components used in a huge variety of industries. Then, the tertiary market provides these components to the businesses that will use them to do their jobs.
Tech solutions are a part of the B2B sector which is growing exponentially as companies look to streamline their operations. Point of sale payment options (like square, stripe, and Apple pay) makes it simple to take payment in real-time with a bare minimal outlay for hardware. Payroll and invoicing software free up staff to do less tedious and more engaging projects—ideal for small businesses and start-ups. A growing B2B enterprise is building websites and developing software for the B2B sector!
One fintech solution that’s transforming opportunities for manufacturers, distributors, and wholesalers involves digital net terms. Clients are giving high reviews for this solution, offered by companies like Resolve.
Using quiet credit checks that require no involvement from the customer, Resolve provides information that B2B businesses use to set credit limits and offer net terms—something that more and more buyers are requiring. After this process, vendors can receive up to 90% of each invoice paid by Resolve within one day. Customers still have the full time to pay their invoices, and can do so via a branded online payment platform that makes B2B financial transactions clear and simple.
Driving growth and increasing market share in the B2B sector needs to balance carefully with cultivating good customer relationships and ensuring customer loyalty. There are so many merchant possibilities globally for customers to choose from, but you need them to choose and stay with your business.
Improving your product/service offering, ease of transaction, and exceptional communication with current customers are hugely important for all business owners. Returning to the B2C ‘cushion’ analogy, losing a customer isn’t just one cushion. It’s a lot of cushions over a long time and a lot of money. Competitors are in the same development cycle as you are. You have to be better than them and let your customers know all about it.
Wholesale contracts have many moving parts. Linesheets contain your pricing, contact information, and information about each product. But these need to be dynamic when taking into account customized discounting for bulk purchases, early payments, or other tailored solutions for individual clients.
Software solutions can smooth these complicated processes out and are constantly evolving as new features are developed. It’s possible to have a B2B software solution (SAAS, or software as a service or an app) that streamlines online ordering and e-commerce. SAAS are cloud-based, require no costly upgrades, and are constantly upgrading the services offered.
This software can link in from the very beginning with your marketing and promotions through to proposals, procurement, dynamic pricing and discounting, invoicing, shipping, and accounts receivable. Both parties can log into a portal to see a snapshot of the transaction’s progress 24 hours a day. Total clarity at every stage.
As a B2B buyer, e-procurement software automates the process of purchasing goods and services to keep your business running smoothly. Requisitions, purchase orders, vendor management, and invoice approval are managed by the software, eliminating human error and the inevitable slowdown that comes from paperwork landing (and perhaps staying) on people’s desks.
Automation plays a huge part in invoicing and payment solutions in B2B. Faster invoicing and payment means improved cash flow, and improved cash flow means potential for growth.
As cash and check payments are phasing out, the path forward lies with digital transactions. Technology means that receiving payment from another part of the world is no longer a very slow, very complicated process. Credit cards can be processed from anywhere. Automated clearing house makes international bank transfers quick and secure. There’s a clear digital ‘paper trail’, and any errors or discrepancies are flagged by the system and easily pinpointed and resolved.
As B2B continues to expand globally, businesses need to take advantage of the many solutions on offer to make these transactions run like clockwork. A seamless B2B relationship keeps supply chains running, keeps cash flow moving, and eliminates hiccups that can really damage a small to medium business. Continuing to be flexible in thinking and evolving operations will drive growth.