What is a B2B online marketplace, and what is its purpose? | Perpetuum Mobile

What is a B2B online marketplace, and what is its purpose?

Miroslav Benak E-Commerce
What is a B2B online marketplace, and what is its purpose?

In a recent post, we described the challenges that confront owners of web shops whose customers are individuals - i.e., business in a B2C (business-to-customer, business-to-consumer) environment.

The basic features of a B2B (business-to-business) e-commerce marketplace are similar to those of B2C; it faces many of the same challenges and shares prerequisites that are necessary for the successful design and life of a web shop. But B2B is still a unique discipline and has additional elements that must be taken into account.

Company to company

B2B refers to an online marketplace where one business system sells goods and services to other business systems. The ways of doing business are similar to those of a B2C environment, but the two have many elements that differ, as well.

Unlike purchases made by individual customers, in which payment by credit card, PayPal, or some other method is expected before delivery, in B2B commerce the web shop is normally used as a platform for placing orders, while payments are carried out as in other B2B transactions, invoice to invoice - in other words, via bank transfer.

In such cases, the customer usually has a contract with the seller in which they are guaranteed certain transactional conditions (prices, discounts, amounts, delivery deadlines, payment deferral, payment in installments, etc.), all of which depend on the status of the customer, their previous results, i.e., volume of purchase, regularity of payment, and years of collaboration, not to mention mutual trust. Of course, a business can also be a one-time customer without any contract with special conditions, so the system has to enable such customers to purchase or to place orders.

B2B vendors are often wholesalers or distributers. They have regular clients who are often companies that deliver to their own end customers. Customers can also be governmental institutions which might have annual contracts for the supply of particular types of goods (such as office supplies). For such merchants, the B2B web shop can serve as a platform for planning procurement, ordering periodically scheduled deliveries, overseeing the execution of contracts, and the like.  

Nothing without a good plan

In such a business environment, it is important that every customer in the B2B system has their “own” part of the application - in other words, a place where relevant information is available to the customer. This can include general data about their contract and conditions, price lists with specially agreed prices listed by categories of goods, agreed amounts of goods, dates of delivery or pickup, shipping oversight (from giving the order for packaging to the final point of delivery), returns and complaints, as well as accompanying documentation such as dispatches, receipts, records, accounts, approvals, etc.

In addition, customers expect to be able to request the procurement and delivery of goods that the seller does not have in stock. This means that it is necessary not only to have this capability in the application, but also to prepare the procurement and selling process that can support it, in addition to accompanying elements - giving information about dates of procurement and delivery, possible amounts, possibilities of partial deliveries along with adequate accompanying documentation, and much more.

All this means that, prior to embarking on the construction of a B2B e-commerce solution, you need to plan very well how you are going to do business in such an environment. B2B is much more than a webshop. As a rule, it is a platform that - not only technologically but organizationally, as well - requires a thorough adjustment and preparation of the entire business system. This is something we will deal with in more detail in one of our next posts, but until then, you can find out how we make web marketplaces.