Business-to-business (B2B) and business-to-consumer (B2C) order fulfilment describe the two different eCommerce models that dominate the online retail sector. eCommerce began with the age of B2C but with more and more B2B retailers hopping onboard the bandwagon, it is essential to understand the variations in the customer relationship, order fulfilment, shipping, and sales frequency and volume that they both represent. Of course, these variations require different operating models to deal with them to ensure that a company can be successful in whichever retail model they subscribe to.
The buyer and their motive
The motive behind sales is very important as this will influence what is sold, when it is sold, what volume it is sold in, how quickly it becomes obsolete and when it should be marketed.
B2C customers purchase products straight from the business. Since the business deals with the consumer directly, it must be aware of all the complications and opportunities that brings. Consumers are emotive people with needs and wants; they often shop on impulse favouring connection and human interaction. They like speedy deliveries and may not plan or research products in advance. They can also be influenced through marketing and are self-centred.
B2B customers are businesses that the retailer sells a product to. Being a business means that they have their own customers and order fulfilment to consider before placing their orders. The motive behind their purchasing is to supply a need to customers. Therefore, their purchases are planned based on their business needs, instead of being impulsive purchases. Their orders usually have greater lead-times, and there is a larger ripple effect if orders are not met accurately and efficiently. They are less concerned with a strong personalised relationship with their business suppliers, and more interested in dealing with companies who pride themselves in efficiency, reliability, price and accuracy.
B2C customers will usually be offered a fixed price which is non-negotiable. This is completely acceptable and therefore, it is vital to get the pricing strategy right from the onset to convert interest into sales.
B2B pricing is often negotiable based on quotes and long-term contracts which provide an opportunity for both parties to negotiate pricing that is mutually beneficial. The result of this is that clients do not necessarily need to head to the competition to get a better deal, but rather should stick around to negotiate an agreement that will work long-term.
Conversion and loyalty
The process to promote sales in B2C customers involves marketing campaigns through traditional methods as well as social media to instigate interest which can be converted quickly into sales. The performance of marketing can be measured and adjusted to influence sales and profitability. This is possible due to the nature of the B2C customer who is driven by emotions and wants, being particularly susceptible to emotive marketing.
Alternatively, B2B customers are familiar with product reviews and specifications and often have their own reputation depending on product quality, optimal fulfilment and supply. Therefore, they are interested in a reliable product and service and are much more likely to show brand loyalty in response to a stellar customer experience.
Purchasing frequency and how that affects inventory expectations
B2C customers often make one-time purchases from multiple sources based on stock, price and convenience. On the other hand, B2B customers tend to order larger quantities of items but less frequently. Therefore, they often require accurate lead-times as orders are based on their own customer orders and inventory management requirements. As can be appreciated, their inventory expectations are high where visibility and transparency of accurate, real-time inventory levels are of the utmost importance.
What ties it all together?
Accurate and efficient order fulfilment is intricately associated with good inventory management and for this to occur, businesses need a great automated software solution with the operational structure to service it.
Topics: B2B, B2C