Post Link: B2B eCommerce Definition: What Is B2B eCommerce?

B2B eCommerce Definition: What Is B2B eCommerce?

If you’re a wholesale distributor or manufacturer, and you’re looking to grow your business, B2BeCommerce is likely either already part of your current business model, or soon will be. Butwhat is it? B2B eCommerce is defined by Investopedia as, “a type of commerce transaction thatexists between businesses, such as those involving a manufacturer and wholesaler, or awholesaler and a retailer.”

That’s a very broad B2B eCommerce definition, and not surprisingly, B2B eCommerce canindeed include transactions across a broad range of industries.

Getting to a Good B2B ecommerce Definition

To get a handle on what B2B eCommerce is, it’s helpful to break the concept down into its twocomponent parts: the B2B or business-to-business component, and the eCommerce or onlinetransaction component. When you think of it this way, the definition of B2B eCommerce can bequite broad.

The automotive industry is a great example of an ecosystem of complex B2B relationships.Within automotive, there is a huge supply chain that represents companies that do everythingfrom supply the initial raw materials (metals, glass, rubber, etc.), to the manufacturing of not justthe car itself but all the components of the car, from radios to headlamps, computer systems

and more. The supply chain can include hundreds of businesses and B2B customerrelationships to produce a single car that will then be sold to the end consumer.

The eCommerce component speaks to how all these different types of businesses may use theInternet to transact and manage relationships with one another. Although the terminology “B2BeCommerce” has only been in use for about a decade, B2B eCommerce business processeshave actually been around a lot longer, going back to as early as the 1960s and 1970s. In 1975,the first EDI (electronic data interchange) standards were published and within a few years,manufacturers like GM and Ford, and retailers like Sears and K-Mart, had mandated that theirsuppliers use EDI. EDI is now a standard business practice, used by more than 90% of Fortune500 companies.

eCommerce, of course, is no longer limited to EDI. Over the last 40 years, eCommerce optionshave expanded to include many different types of transactions. A recent report in eCommerceWorld identified four major types:

eCommerce Site: a company’s own e-commerce site that is open to all or password-●

protected for approved customers.Punch-out or web procurement: web-connected procurement software linked directly to the●

customer’s enterprise resource planning system.Vertical market networks: a commercial vertical market network or industry web exchange●

such as Covisint for vehicle makers and Exostar for defense and aerospace manufacturers.Open online marketplaces: sites such as those operated by Alibaba Group or Amazon●

Business.

B2B eCommerce Examples

The 2016 edition of B2B eCommerce World’s B2B eCommerce 300 report lists some of theworld’s biggest companies as users of B2B eCommerce, and a growing number of smallcompanies are benefiting from it too. The 300 companies featured in the report are projected togrow web sales by 13.3% this year to $547.1 billion (from $482.79 billion in 2014)—figures thateasily eclipse the U.S. B2C e-commerce market.

Companies included in the report include manufacturers and distributors such as 3M, Boeing,Coca-Cola, ConAgra, Microsoft, Nike and many other of the world’s biggest companies, as wellas smaller companies like Four Seasons General Merchandise, Fox Outdoor and AugustaSportswear.

Some companies are using large marketplaces either targeted at a specific market vertical orone with a broader appeal, like Alibaba or Amazon Business, to reach their customers.

Other companies are setting up their own eCommerce websites, which can range from simpleto complex. This option allows businesses to customize their site for their exact needs. Forinstance, Augusta Sportswear – a sportswear manufacturer and distributor – has developed awebsite that allows it to sell sports uniforms and corporate apparel directly to schools, teamsand businesses. On Augusta’s site, customers can research and select fabric options andcustomize the apparel they select with team names, mascots, colors, and team member names.

B2B eCommerce is a very broad business concept that can be defined in a number of ways.The possibilities for companies to benefit from B2B eCommerce are equally broad, allowingcompanies to choose from a wide range of options to support their business objectives.

How do you define B2B eCommerce? Is your company using or planning to use B2BeCommerce in 2016? Tell us about it in the comments.Post originally located at: https://www.handshake.com/blog/b2b-ecommerce-definition/

Handshake | Sales Order Management and B2B eCommerce Solutions - www.handshake.com© Copyright 2015 Handshake Corp.