B2B eCommerce is expected to reach $1.1 trillion by 2020. As a B2B seller, you have a huge opportunity to be a part of this growth. Having an eCommerce strategy gives you a competitive advantage, and a chance at rapid growth in sales.
But, the first step in executing a new eCommerce strategy means picking the right eCommerce, or shopping cart, platform for webstore.
In this post, we’ll review eCommerce software provider Magento’s offering for B2B. You’ll learn the basics of Magneto B2B and how to evaluate if it’s right for you.
B2B eCommerce – Why You Need to Participate
Not only is the B2B market expected to reach $1.1 trillion, but that number predicts the B2B market twice as big as B2C. While eCommerce is a challenge for B2B sellers, it’s a challenge seemingly worth the risk.
eCommerce gives B2B sellers a new way to expand their business beyond traditional sales channels. Online selling makes buying fast, easy, and convenient, all the while exposing you to a larger audience that you couldn’t reach before.
B2B sellers who take this opportunity to expand to eCommerce will gain an advantage over their competitors who don’t.
Making the decision to sell online is easy. Executing that strategy though is a different story.
eCommerce might be uncharted territory for you. The rules for online selling are different from the rules of selling offline. You’re going to have to learn the language of eCommerce to be successful.
When you’re learning to sell online to the masses for the first time, it’s actually best to look at B2C practices. Even though B2B will have additional complexities, you are still selling to people who just happen to work for businesses. Read about B2B eCommerce best practices and how you can learn from online B2C sellers.
Once you understand the eCommerce strategy you have to undertake, you’ll want to choose the right eCommerce platform for your business. The platform will make all the difference in your experience.
Enter Magento’s B2B solution.
It’s no surprise that a leading B2C eCommerce platform also provides a solution for B2B sellers. Magento’s B2B solution takes best practices of B2C selling and helps apply it to your B2B needs.
Magento B2B – What It Offers
While Magento certainly isn’t the only eCommerce platform out there for B2B, it’s a good place to start your research. Magento offers two editions of their eCommerce platform, Community and Enterprise. Their Enterprise Edition is a flexible, scalable solution that can fit B2B sellers’ needs, too. (Magento Community is not.) Here’s how:
Magento provides an open source platform. This means that they have an open API which allows for customization and integration with your other systems. In other words, it’s easier for sellers to tailor their site to their specific needs.
Having an open source platform can be the difference in your ability to make your site fit the exact needs of B2B selling. You’ll have more options and better access to the capabilities you’re hoping for.
In a B2B environment, you might have multiple people working on your eCommerce site. Magento allows you to have total control of your business by giving you account management processes. You can set permissions and roles, and create sub-accounts, as needed.
As a B2B seller, your ERP is the current foundation of your business. It’s where you manage all of your orders, items, and financial processes. Your ERP has to be integrated into your eCommerce site to ensure that you continue to run your business smoothly. You don’t want to manage your eCommerce site in a silo.
With Magento’s open source foundation, this makes it easier for you to be able to seamlessly connect your backend system to your webstore. Magento connects to most common ERPs. If they don’t support yours, don’t fret. You should be able to find a third-party vendor that can do the integration for you.
If you’re a B2B seller, odds are that you’re tracking inventory across different warehouses. Magento’s B2B solution helps you keep track of your inventory across all of your warehouse locations.
This capability is crucial when you expand to a new sales channel. You’re now going to have to track inventory for both online and offline orders. You don’t ever want to oversell or not have enough stock.
Negotiated Pricing Terms
A vital aspect of B2B selling is your payment terms. This is one the biggest differences between B2C and B2B. B2B usually requires you to have various pricing tiers and payment options for your different customers.
Magento allows you to associate accounts with specific price lists, payment options, and shipping methods.
You can end up with less flexibility online when it comes to pricing terms. You won’t have that human interaction that you do now to service customers as they need.
Another great advantage of Magento’s open source platform is that it encourages growth of a community of developers. Since Magento’s platform does not offer every function out of the box, developers will create extensions specifically for Magento.
So, if you’re looking for specific shipping function, check out process, or email marketing capability, a developer most likely has created an app specifically for that. Magento even has an extension marketplace where you can search and find these types of extensions easily.
Magento B2B solution’s flexibility extends to your ability to only give access to certain part of your site to specific customer groups. Upon customer login, you can decide what customers have access to what types of products.
This gives you the ability to target different customer groups specific to their needs. You can define how they interact with you and offer a better customer experience.
Magento B2B – Questions You Need to Ask First
How does Magento integrate with the rest of my existing systems?
This should be one of the first questions you ask yourself. You can’t operate efficiently if your Magento B2B webstore doesn’t integrate with the rest of your existing systems like your ERP and POS systems. Otherwise, you’ll be left manually entering your online orders into your ERP. It’s possible, but it’s not the worth the extra time.
Then, what happens if you decide to add online marketplaces, such as Amazon or eBay? This complicates your processes even more. For example, how do you know you’re offering the correct amount of inventory on your webstore and on Amazon? You don’t want to ever sell something online that you don’t have the physical inventory for. How do you ensure you ship your online orders based on the warehouse with the closest location to your customer?
As you grow, you’re going to need a way to manage all your order, item, customer, inventory, and shipping data across all of your channels. Unless you handle this integration in house, you’ll most likely going to have to work with a third party vendor that can offer these types of services.
For a growing, or enterprise level business, you’re going to want to look outside the free extensions within Magento’s extension marketplace and invest in multichannel technology that scales with your business. You’ll want a robust solution that allows you to operate exactly as you need and want.
(Full disclosure: This is one of the things that nChannel does. We provide a seamless integration between Magento and your systems via a cloud-based multichannel management platform.)
Am I able to provide all the pricing and account terms that my customer needs?
As we mentioned before, Magento is flexible in their ability to offer different pricing terms. But at the end of the day, you’re still customizing a B2C eCommerce platform for B2B selling. Payment and pricing terms vastly differ between B2C and B2B. Is Magento really going to be flexible enough?
You need to be diligent in your research to make sure that Magento can provide all the advanced options that you need for your paying customers. Are all of your current payment terms possible? Can you provide pricing tiers based on number of products bought?Can you customize based on individual customers?
Your customers are no longer going to interact with a representative from your company to ensure these options are available and processed correctly.
Can Magento handle my complex customer approval processes when buying?
In B2B, it’s not uncommon that there’s an approval processes by your customers before a purchase is made. Your buyer might need approval from their boss, who still needs sign off from management, before a final purchase is made.
Magento can be limited when handling these types of complex customer workflows and they will still have to be managed in your ERP. You’ll want to know what the best solution is for your business (and it might mean not Magento).
What to Do Next
As a B2B seller looking to expand to eCommerce, Magento’s B2B solution can be a great way to start selling online. Their open source platform makes it possible to customize your site specifically to your B2B needs.
While they have some great features, they also have some shortcoming to think about, like how they handle customer workflows.
At the end of the day, you need to choose the platform that’s best for you, whether that’s Magento or not.
Thinking about expanding to a true multichannel business and looking at different softwares? Check out our Multichannel Implementer’s Guide for 2015 to learn more about executing a multichannel sales strategy and picking the right systems for your business.