B2B E-Commerce & Why ERP Integration is Key

Definition of B2B e-commerce:

B2B e-commerce is the online sale of products or services of a business to businesses.

What’s the difference between B2C and B2B e-commerce?

At a glance, there might not seem to be many differences between B2C and B2B e-commerce. After all, doesn’t it boil down to simply selling products through a web store? While that is true in essence, the reality is a little more complex.

The basic needs that a web store has to meet are the same for consumers and professional buyers alike: they need an online sales channel that’s available 24/7. But that’s where the similarities stop.

Professional buyers have a number of additional needs that business-to-business web stores have to meet in order to provide a viable alternative to simply calling, emailing or even faxing your sales department. This includes:

Customer-specific pricing

Consumer web stores offer a standard price for each product — often with bulk or member discounts. In contrast, many B2B companies have come to individual pricing agreements with their clients, and that needs to be reflected in their online sales channels.

Single buyers vs. decision-making units

Consumers often make purchasing decisions by themselves, or maybe in collaboration with one or two others. Professional procurement, on the other hand, can be much more complex, and this complexity can be difficult to reflect in B2C web stores. B2B e-commerce platforms are specifically designed to support various roles so you can safeguard your client’s procurement processes and DMU structure.

Product search functionality

While consumers may search based on a brand name or product description, seasoned B2B buyers often search using article numbers to ensure that they get exactly the right item. Depending on their industry, there may only be one specific part suitable for their business needs. B2B web stores are designed with all of these search needs in mind.

What are the benefits of B2B e-commerce?

E-commerce offers several potential advantages for any B2B organization willing to take their sales online, including more business opportunities, lower costs, and improved sales.

The main benefits of B2B e-commerce are:

Benefit 1: Tap more business opportunities
Benefit 2: Improve B2B e-commerce sales
Benefit 3: Lower your costs
Benefit 4: Get customer feedback
Benefit 5: Reach new markets
Benefit 6: Achieve data-centricity with ERP-integrated B2B e-commerce

Find out more about each benefit of B2B e-commerce in the blog.

B2B e-commerce and EDI

In some ways, business-to-business companies were ahead of the curve when it came to online commerce. While the first major web stores opened in the 90s, the U.S. transport industry developed EDI (electronic data interchange) back in the 1960s.

While EDI and B2B web stores serve the same goal (namely to facilitate the online purchasing of goods), having a web store does not mean that your organization can’t also benefit from EDI — or vice versa.

What Is EDI?

EDI, or electronic data interchange, lets businesses exchange information using a standardized format. When EDI was first introduced, it was a paperless — and therefore much more efficient — way to send documents such as purchase orders and invoices to other companies.

The automotive industry, for instance, has been using EDI for over 40 years. EDI is used to streamline the communication between the car manufacturer and the rest of the supply chain, paving the way for efficient production lines.

The retail industry also relies on EDI to cut costs while preserving customer service levels. Vendor managed inventory (VMI) makes it easy for retailers to make inventory replenishment decisions, which grants greater control over inventory and diminishing waste through over-supply.

How EDI and B2B web stores complement each other

Just like business-to-consumer and business-to-business e-commerce platforms, EDI and web stores actually serve different purposes.

EDI facilitates efficient communication between organizations with regard to recurring orders of standard goods. EDI handles this kind of order much more efficiently than a web store ever could.

Conversely, a web store is a much more efficient sales channel for incidental purchases that do not need to be fully automated. Thanks to product catalogs, web stores are much better at promoting new products to clients and unlocking powerful cross-selling and upselling options.

ERP, PIM and web stores: integrated e-commerce software

Successfully implementing these necessary B2B e-commerce web store features may seem challenging. While rolling out an e-commerce platform for professional buyers might not be as easy as plug-and-play consumer web stores, taking an integrated approach to e-commerce can save you a lot of time, money and headaches.

What is integrated B2B e-commerce?

Integrated e-commerce uses business logic and data from your ERP (and optional additional systems) to power your web store. This offers numerous benefits, including:

Custom pricing data in your web store
Minimal human error when processing orders
Automatically updated product catalog

Integrated web store software is able to do this because it connects directly to your ERP system. In fact, integrated e-commerce software is often partially installed inside of your ERP, which avoids the kinds of complex connections that interfaced solutions require.

With the ongoing diversification of the IT landscape, your ERP isn’t the only system you can use to enrich your web store’s online product catalog.

See all 46 benefits of integrated e-commerce

PIM and your web store

Using a product information management (PIM) system allows you to provide even more detailed product specifications in your online sales portal, which is a huge advantage for B2B web stores.

PIM systems enrich ERP product data through categorization and product data unification. This data can then be used in your B2B web store so that your product pages provide complete and comprehensive data — including detailed images and downloads.

B2B e-commerce: open-source software or closed source?

Security is paramount when integrating your web store with other business-critical applications. That’s why the kind of coding your software uses should be a key factor when choosing your B2B e-commerce software package. In other words, do you want open source or closed source software? Let’s take a look at the differences.

Open-source e-commerce software

Open source web store solutions allow anyone to use, examine and change the source code. The advantage of this transparency is that multiple people can keep an eye out for potential vulnerabilities — and provide a fix for any problem that may occur. This is also the root of the main disadvantage of open source software: any weaknesses found in the code could potentially be exploited.

Closed source e-commerce software

Closed source software can’t be viewed or altered by just anyone. This lack of transparency makes the code much less susceptible to attacks from malicious hackers, as they cannot access the software to search for weaknesses. However, fewer eyes on the code also mean fewer people working to improve it.

Learn more about web store security

B2B e-commerce KPIs

How can you tell if your B2B online shopping cart platform is performing well? Online revenue is a good indicator, but there are many other KPIs you can also track to ensure you’re on the right path.

Online customer retention rate

This KPI helps you determine if your B2B web store offers a superior order placement experience. Do your clients continue to choose your web store as their preferred method for placing orders, as opposed to, say, telephone or email? A high number of returning visitors is a clear sign that your web store is meeting your clients’ needs.

Average order value

This indicator will let you know whether you’re missing out on cross-selling and upselling opportunities in your web store. This KPI is particularly interesting for B2B companies, as they are also able to compare an individual’s average online order value with their offline spending. If clients are regularly making larger purchases online than they do offline, your web store is probably doing its job.

Want more B2B e-commerce KPIs?

If you would like to take a more detailed look at KPIs that can help you manage your online sales performance, you’re in luck. We have dedicated a blog to this very topic.

Critical KPIs for online B2B sales

B2B e-commerce service

Not sure if your company is ready to go it alone once you launch your B2B web store? There are plenty of e-commerce services you can seek from third-party specialists. Here are four services that your business might consider.

Web store hosting

One of the great things about a web store is that it makes it easy for your clients to reach you around the clock — as long as your web store remains live, that is. If you don’t want to take care of the hosting yourself, there are plenty of e-commerce solution providers that also offer hosting options.

Online store design

As more online purchases are being made from mobile devices, good design isn’t just about looks: it’s an essential part of providing a fantastic user experience. This is why it’s important to consider consulting a specialized user experience (UX) designer or bureau to optimize your web store’s look and feel.

Online marketing for e-commerce

From display advertisements to email marketing, there are plenty of ways to bring people to your web store. If you’re not sure whether you have the necessary digital marketing expertise in house (or if you want to save time), an online marketing bureau can help you out.

E-commerce consultancy

Last but certainly not least, you might want to enlist the help of specialized e-commerce consultants — especially if they have a lot of experience with B2B web stores. They can provide unique insights and tips to ensure your web store launch goes smoothly.