The Key B2B E-commerce Advantages and Disadvantages

Speaking about the B2B e-commerce advantages and disadvantages, we need to highlight first a recent Study Conducted by LinkedIn shows that 76% of e-commerce marketers, as shown in the below graph, still have a positive view about their marketing strategy over the next 6 months, despite the global economic disturbance.

With respect to KSA and UAE business landscape, the focus on brand building comes as a priority for over two-thirds (70% and 62% correspondingly) of senior B2B e-commerce vendors, stated that they will maintain (or increase) investing in this field in the next 6 months.

Someone might ask: 

• How B2B e-commerce is it different from the traditional type? 
• Why it can be an opportunity for many companies? 
• Do you know how to manage a B2B e-commerce?
• What are the pros & cons of B2B e-commerce?

Please continue reading to find answers to these questions and more.

What Is E-commerce?

The term e-commerce encompasses all the different commercial transactions carried out online, i.e. via the internet. This type of business can also be called, electronic commerce.

Today, e-commerce is one of the most active segments of the international economy.  E-commerce has been growing steadily in recent years, with progressively more buyers shopping online to fulfill their needs, whatever they may be.

What Is B2B E-Commerce Business?

B2B e-commerce (business-to-business electronic commerce) refers to the online buying and selling of products or services between businesses using electronic means, such as the internet, intranets, or other digital networks.

B2B e-commerce allows businesses to conduct transactions and exchange information electronically, without the need for physical contact or paper-based documents.

Who Are the Customers in B2B & What Is The Main Focus of B2B?

Unlike in B2C marketing, you don’t address your offer to a consumer, but to a buying center. It includes the representatives of the company who decide on the purchase of new capital goods.

So, the main focus of B2B businesses is to target this category and try to close deals with them.

Differences Between B2C and B2B

In general, depending on the target audience, e-commerce can be divided into two main categories:

• B2C e-commerce (business-to-customer), which means the trade of services or products for individual buyers.
• B2B e-commerce (business-to-business), when the products or services are designed to be sold to other businesses, whether we are talking about products such as Home Box, or a service such as Designlab Experience.

B2B is a special category of trade, in that contracts are generally signed for larger amounts of money, and the term of the contract is usually longer than with B2C trade.

By now, probably you can realize how B2C differs from B2B operations. To make the picture clear, the below table shows a comparison of how both fields work: 

Characteristics of B2B E-Commerce

In B2C online stores, companies can sell their products or services to other professionals via an online platform, available 24 hours a day and accessible from anywhere. 

The main b2b characteristics include, but may not be limited to:

1. Customer-specific prices

B2B companies can offer customer-specific prices by implementing a pricing strategy that takes into account various factors, such as:

• Customer’s size
• Order volume
• Frequency
• The competitive landscape

2. Different segment of customers

While consumers make their purchasing decisions alone, business buyers, especially in large corporations, make their decisions in a much more complex process. 

B2B e-commerce solutions must therefore be able to manage different roles and types of users, in order to secure the order validation process for each customer.

3. Integration of data

A B2B e-commerce store must be able to seamlessly and automatically integrate the data from the ERP system (or back office) of each customer. 

This is essential to ensure the consistency of prices and references by type of customer, to avoid errors during order processing, or to automate the updates of products visible online at each evolution of the catalog.

4. Accessibility and relevance of information

One of the hardest challenges to B2B e-commerce is to provide all the information needed for decision-making. Keeping in mind that B2B merchandise is often complex, niche-specific, and highly specialized. It is therefore useful to customize information according to the needs and the field of activity.

Now you can build your B2B online store with Zid and get all features and support you need:

• Providing a professional online store for your business customized to your identity and scope, with the ability to manage it efficiently without any complex technical expertise.

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• Providing all apps you may need to automate your operational tasks and grow your business by integrating with platforms for marketing, analytics and reports, customer service, dropshipping, affiliate marketing, inventory management, and many more.

Check out Zid Apps Market

• Providing multiple payments, shipping, and delivery options necessary to run your project activity, especially the Zid Pay payment gateway and Zid Ship for shipping.

Now, let’s identify the B2B e-commerce advantages and disadvantages, but it’s important first to ask this question:

Why B2B e-Commerce Is Better Than B2C?

It is not accurate to say that B2B e-commerce is inherently better than B2C e-commerce, as both have their unique advantages and disadvantages. However, there are some key reasons why B2B e-commerce may be more beneficial for certain businesses compared to B2C e-commerce:

1. Larger Transaction Values: 

Transactions typically involve larger order volumes and higher transaction values than B2C transactions. 

This means that B2B businesses can generate higher revenue per transaction and may have more predictable revenue streams.

2. Repeat Business: 

B2B relationships are often built on long-term partnerships and repeat business, whereas B2C transactions are often one-off purchases. 

This means that B2B businesses may have a more stable customer base and higher customer loyalty.

3. Customization and Personalization: 

B2B e-commerce often involves customizing products or services to meet the specific needs of individual customers. 

This can result in more personalized and tailored solutions for businesses compared to B2C e-commerce.

4. Reduced Marketing Costs: 

B2B businesses can often rely on a smaller pool of customers, which means they may not need to invest as much in marketing and advertising as B2C businesses, which typically have a larger and more diverse customer base. So, we can consider it also one of the advantages of b2b marketing.

5. Streamlined Operations: 

B2B e-commerce often involves automating and streamlining business processes, such as procurement, inventory management, and payment processing. This can result in cost savings and increased efficiency for B2B businesses.

More about B2B E-commerce Advantages and Disadvantages

A B2B e-commerce solution can transform the way a company does business. Because, beyond the simple online sale of products and services, it opens new perspectives in terms of performance, growth, and reliability.

1. Flexibility and Scalability

The needs of professional buyers are changing. They no longer accept that they can only order during office hours or that they have to wait for an answer from a salesperson.  And online shopping is even more efficient in the case of regular orders (the possibility to place the order in 1 click).

2. Drive Sales with Data

Relying on factual data streamlines the entire process. This can improve forecasting when data analysis provides accurate insight into customers’ online activity: 

• Time spent online
• Average order value
• Exchange and return rates

5. Improve the Customer Experience

By centralizing all customer data, you can better understand their wishes and needs. Your marketing departments can then use this knowledge to better inform and assist them (via chat for example).

Let’s talk about the disadvantages in the following part highlighting also the key risks you might face.

Risks of B2B e-Commerce in Saudi Arabia

B2B e-commerce in Saudi Arabia, like any other country, carries a certain degree of risk. Let’s mention some of them in the below points:

1. Regulatory Risks: 

B2B e-commerce in Saudi Arabia is subject to various regulations and laws that businesses must comply with, including data privacy laws, online payment regulations, and taxation laws. 

Failure to comply with these regulations can result in legal consequences, such as fines and penalties.

We have mentioned all legal requirements in this article: E-commerce in Saudi Arabia: All You Need to Start With No Risk

2. Size of the markets

Apparently, there are more people than companies, so more people in the B2C market than in the B2B market. This size factor gives the possibility for the client companies to have power over the supplier companies.

3. The highly specialized merchandise

Here, the limitation will be even greater, because there will be fewer companies that need the products you sell. 

But, there will logically be less competition, not to mention that a specialist can always raise prices compared to a generalist supplier.

3. Long negotiation process

When selling to companies, several people are involved in the decision-making process. Thus, the sale is much longer than in a B2C e-commerce, where purchases are made almost instantly

4. Price negotiation

In-bulk orders involve large volumes of products in addition to invoicing. Consequently, the clients have the right to:

• Ask for affordable prices.
• Request for money off.
• Demand specific payment method(s).
• Negotiate for extra service.

What Are?

Here are some examples of B2B online stores in Saudi Arabia:

Alibaba.com

Alibaba.com is the most popular B2B online marketplace that offers a wide range of products including electronics, fashion, home and garden, and many others. It allows businesses to buy and sell products in bulk and at competitive prices.

Ajar Online

It’s a B2B platform that offers a range of property management services for businesses in Saudi Arabia. It provides features such as rent collection, property maintenance, and tenant management.

Jollychic Wholesale

Jollychic Wholesale is an online B2B store in Saudi Arabia that offers a wide range of products such as fashion, electronics, home and garden, beauty, and many others. It allows businesses to purchase products in bulk at competitive prices.

Home Box

It’s a B2B online store that offers a wide range of office supplies and furniture. It provides businesses with competitive prices and fast delivery services.

B2B E-commerce Business Best Practices with Zid

After highlighting the key B2B e-commerce advantages and disadvantages, let’s make it briefed and give you some B2B e-commerce business best practices in quick points:

• Understand your target audience and their needs.
• Create a user-friendly and easy-to-navigate website that is optimized for mobile devices.
• Provide detailed product information and clear pricing to help customers make informed purchasing decisions.
• Offer personalized pricing and discounts to encourage repeat business.
• Provide excellent customer service and support, including timely responses to inquiries and complaints.
• Offer a variety of payment and shipping options to accommodate different customer needs.
• Use analytics and data to track customer behavior and improve the customer experience.
• Invest in cybersecurity measures to protect customer data and prevent fraud.
• Foster relationships with suppliers to ensure reliable and timely delivery of products.
• Continuously evaluate and improve your business processes to stay competitive in the market.

At last, we can say that companies that aspire to grow, no longer have a choice, as the line between physical and online commerce is hurriedly fading, and the digitization of trade becomes a requirement for survival, and no longer a luxury.

We invite you to start going viral and digitizing your B2B E-commerce Advantages and Disadvantages with Zid. We have almost all the features you need to sell, promote, and scale your business.