eCommerce Distribution: Why You Should Use Third-Party Fulfilment Companies

B2B commerce is undergoing rapid transformation. Although the market is highly affected by changing customer behaviours and expectations, it is expected to reach $6.7 trillion in gross merchandise value by the end of 2020, more than doubling the size of the B2C market.

Millennials approach B2B purchasing with the same level of expectation as they do with B2C shopping. They are not necessarily interested in requesting demos, meetings, or sales calls as savvy digital natives.They desire an effortless, immediate method of researching, evaluating, and purchasing the products they desire.

Establishing a strong eCommerce channel presents significant growth opportunities for distributors. Let’s take a look at how ShipBob can help distributors dominate the eCommerce industry.

Distributors Face Several Common Challenges

Despite overwhelming evidence to the contrary, some distributors have failed to meet customer demand for digital shopping experiences.

What are the issues that an eCommerce distribution centre may face?

1. Culture within the Company

Establishing an eCommerce channel may appear to be a difficult task — one that will require additional resources. If everyone on your team is juggling their existing responsibilities, who will take on the new eCommerce initiative? Is your team equipped with the necessary skills to get this project off the ground? Additionally, there is the issue of resistance to change. Sales representatives may perceive a threat from a new self-service purchasing experience. IT is concerned that the new site will increase workload and cause disruptions in the purchasing process.

And what if it becomes unavailable or is hacked? Others may have difficulty visualising the potential ROI. Managing change and fostering a shift in mindset will require the commitment of the entire leadership team. However, if you’re considering your business’s long-term success, this is a risk worth taking.

2. B2B (Business to Business) purchasing

While B2B buyers have consumerised expectations, they do not behave identically to B2C buyers when it comes to purchasing. In business-to-business sales, payments are not as simple as punching in a credit card number or logging into a PayPal account. If I were a B2B buyer, I would never put a $40,000 order on a credit card.

ACH, or electronic check, payments are more prevalent. Among the technical requirements that B2B sellers must meet are the following:

Requirement for a punchout solution that integrates with the purchaser’s procurement application or enterprise resource planning (ERP) system

Payment requests made via purchase orders

Appropriate approvals from internal managers to place orders with you

Is it possible for an eCommerce platform to support all of these purchasing scenarios? The long answer is that it depends on the platform and its integration library. For example, ShipBob enables hybrid businesses with both B2B and B2C customers to offer distinct price lists or catalogues to distinct customer segments.

3. Business-to-business (B2B) complexity

Due to the complexity of the purchasing process and a diverse customer base, B2B businesses believe that eCommerce is not an option for them. Among the most frequently cited concerns are the following:

• Pricing by contract
• Customers subject to special terms and conditions
• Unique products
• Numerous payment and shipping options

While these are compelling points to discuss with your eCommerce technology vendor, they are not impediments to transforming your business. You can easily overcome these obstacles with the right eCommerce solution.

Benefits Of Adopting eCommerce Distribution

The potential benefit of a strong eCommerce channel far outweighs the above-mentioned challenges. Adopting e-commerce can help distributors and wholesalers grow their businesses.

1. Endless innovation

Even if your business is running smoothly and you are not committed to chasing every new trend, it is critical to incorporate digital tools into your offering. As people spend increasing amounts of time online, businesses must consider adding an eCommerce channel to remain relevant.

Indeed, more than 70% of B2B buyers fully define their needs before contacting a sales representative, and nearly half identify specific solutions before reaching out. That is, slightly less than half of all sales are a result of the sales team.

The majority of customers consult the internet before making a purchase decision, not the sales representative. Adding an eCommerce channel enables you to adapt to changing purchasing habits and remain top-of-mind in critical moments.

2. Increased efficiency

It may appear as though the eCommerce platform is an added responsibility that will dent your resources and increase your operating costs. In reality, automation will assist you in streamlining and lowering the cost of operations. Once your eCommerce platform is operational, you can leverage digital tools for analytics, inventory tracking, and other functions to make more informed decisions throughout your supply chain.

Additionally, as your operations become more efficient, the customer experience improves, resulting in increased brand loyalty and long-term sales. In other words, as a result of digital tools, as you work less, you gain more. Merchants using ShipBob would concur, as the platform includes built-in Ecommerce Analytics and Insights reports.

3. Growth and scalability potential

Historically, distributors relied on trade shows, advertisements in trade publications, and on-the-ground salespeople visiting customers. With the advent of eCommerce, global reach became possible in a matter of a few clicks, making upscaling easier than ever before.

Our goal with our eCommerce experience is for it to be completely seamless from browsing to purchasing to shipping.

The current trend is for B2B to move more toward B2C. Due to the customisable and adaptable nature of eCommerce platforms, distributors can easily enter new markets. Distributors can become globally accessible and relevant by simply adding product descriptions in relevant languages or categorising products according to cultural preferences. Allowing distributors to reach markets that were previously unreachable, often in the most remote corners of the world, without requiring a large upfront investment or risk.

Six Essential Requirements for eCommerce Distribution

Wholesalers and distributors are currently undergoing significant disruption. As consumer behaviour and expectations change, B2B eCommerce leaders must rethink their approach to online selling and place a premium on creating customised digital experiences that position them for long-term success.

1. Product recommendations that are unique to you.

According to research, 50% of B2B buyers prioritise enhanced personalization when evaluating online suppliers with whom to establish business relationships. More importantly, 49% of consumers increase their spending when they receive personalised experiences. Product recommendations are an excellent way to simplify the purchasing process for buyers while also increasing cross-sell and upsell opportunities. Cross-promotion frequently results in buyers becoming aware of products they were unaware the distributor offered as they switch from offline to online shopping.

When constructed with the appropriate technology, eCommerce websites can provide highly personalised and customised experiences, including the following:

Product pages with related products

Homepage optimisation with personalised featured products

Consider optimising your shopping cart with similar products

Finally, leveraging customer data – such as geolocation or demographic information – to provide product recommendations results in a significant increase in conversions and a decrease in cart abandonment.

2. Capabilities for advanced search

Distributors frequently have tens of thousands of SKUs, which complicates product discovery today.  With 43% of online shoppers expecting an intuitive, effective search function on any eCommerce site, distributors are obligated to deliver. Their eCommerce strategy’s success is entirely dependent on the user experience. By providing advanced search functionality, such as faceted search, to users, we can ensure happier, more engaged buyers and, ultimately, increased sales. When considering the requirements for a distributor eCommerce platform, prioritise search functionality.

3. Controls at the account level

Access to account-level controls is another critical requirement for your B2B eCommerce platform. When selling into a business, you’re almost certainly going to have to juggle multiple stakeholders, various departments, and even multiple locations. This requires multiple users from the same organisation to log in and view order history or look up other information.

Account and contact relationships, or this concept of customer account management, is a rapidly growing area in terms of consumer expectations and buyer demands for this type of structure, particularly if you are selling to large corporations or government organisations.

Additionally, distinct purchasing requirements frequently necessitate distinct purchasing scenarios. Certain clients may require 30-day invoices with a sizable credit limit, while others may require card payments. A suitable business-to-business e-commerce solution will enable you to accept a variety of payment methods and provide account-level controls for the best user experience.

4. Pricing on a customer level basis

When it comes to pricing, owners that use eCommerce distribution strategies must consider and anticipate numerous factors. Additionally, users that need to tailor pricing down to the individual customer may find pricing models complicated. Given that some products will be available in specific markets or to specific customers, as well as the fact that shipping costs and options will vary by location, distributors require an eCommerce solution that complements their digital commerce strategy. The appropriate technology should enable you to update and customise pricing down to the individual customer level based on their contract or purchase history.

5. Technical specifications and resources for content

B2B distributors will require more than just shopping cart functionality to compete with Amazon. The only way to earn customer loyalty is to deliver user-centric experiences that add value throughout the purchasing cycle. Apart from technical product information and specification sheets, your buyers may desire additional helpful content resources that enable them to evaluate the product and gain a better understanding of how to use it following the purchase.

Not to mention the SEO benefits associated with directing customers to your website in the first place.

To ensure that all of your product communications remain current and relevant, you’ll need an easy way to modify, replace, and share content via the platform. By implementing an intuitive eCommerce solution, you can streamline your online sales and create compelling user experiences.

6. A springboard for innovation

Plenty of veteran distributors are familiar with the aches and pains associated with running businesses on a legacy system. With the added burden and costs associated with maintaining an out-of-date platform, it becomes increasingly difficult to innovate, deploy new features, and meet customer expectations. Meanwhile, research indicates that B2B buyers are becoming more selective: 45% want personalised portal content, 44% want an easy-to-use ROI calculator, 38% want augmented reality options, and 33% want video chat options (outlined in this B2B ecommerce stats page).

Final Thoughts 

Consider your long-term goals when selecting an eCommerce platform for your eCommerce distribution. Selling products online is no longer sufficient. Wholesalers and distributors must consider how to create digital experiences that meet the needs of their customers and entice them to return. Choosing the appropriate eCommerce software is critical for laying the groundwork for future growth.