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Sep 20, 2021 | 8 minute read
written by Shaneil Lafayette
If it’s one thing the COVID-19 pandemic showed us, it was that disruption was inevitable - and we surely have seen that in the eCommerce industry. Over the past two years, businesses have had to adapt to a new normal and accommodate for new customer expectations throughout their eCommerce strategy. B2B businesses specifically have felt an unprecedented amount of pressure to expand their B2B offerings and align more with B2C shopping experiences. One such way that B2B businesses have begun to expand their offering is to extend their business to offer B2B2C eCommerce experiences.
While the concept of B2B2C eCommerce has recently caught on and has been making headlines, B2B2C eCommerce has actually been around for quite some time now, but we may not have labelled the efforts as such. B2B2C eCommerce is still also a tricky business model to maneuver, which could have caused the slow rise in popularity. However, with the advancement of technology, businesses are getting in a better place to tackle this market.
For those who are unfamiliar with B2B2C eCommerce, you’re in the right place. In this article we will break down what it is, how it differs from other business models, the benefits and challenges of adopting a B2B2C eCommerce model, and how Elastic Path may help to support your business.
Business-to-Business-to-Consumer eCommerce, otherwise known as B2B2C eCommerce, in its simplest term, refers to when a business utilizes a third party business to sell directly to their end consumer. This is not to be confused with white-labeling, when a company sells an unbranded product to a third party business, and allows them to sell the product/services as their own. This model combines the elements of a B2B and B2C business model where “Business A” partners with “Business B” to deliver “Business A’s” products and services to the “Customer.” While a variety of applications live under the B2B2C umbrella, this is the simplest form of B2B2C operations.
UberEats is a great example of a B2B2C strategy deployed. Uber Eats (Business A) sells its delivery service to a plethora of restaurants, groceries and shops (Business B) which then allows them to sell the delivery services to buyers (Customers). Amazon also deploys a similar strategy in which they sell eCommerce hosting, warehouse storage and delivery services to businesses that have a product or service that they want to sell, and offer it to customers that use the Amazon platform.
The emergence of B2B2C in the market has caused quite a bit of confusion among the differences between B2B, B2C, and B2B2C models in eCommerce. So what are the differences?
B2B eCommerce: Business-to-Business
B2B eCommerce refers to the sale of goods or services between businesses via online channels.. Take for example, an office furniture company. This type of business would traditionally be labelled as a B2B business because its primary targets are other businesses. One example of the largest global eCommerce websites that deploy a B2B strategy is Alibaba. Alibaba’s main selling strategy is to connect both B2B buyers and sellers within their platform instead of selling directly to customers.
B2C eCommerce: Business- to-Consumer
B2C eCommerce on the other hand, refers to the sales of goods or services directly to consumers. B2C eCommerce is one of the most common and easiest eCommerce models to launch, making it consumers #1 preferred choice of shopping. Take for example, an online clothing boutique. This type of business would traditionally be labelled as a B2C business because its primary targets are direct consumers. An example of one of the largest B2C eCommerce websites is Walmart. Walmart’s main selling strategy focuses on marketing and selling the majority of their products to consumers.
The main difference between a B2B and B2C business is the business strategy they deploy to cater to their intended audience. For example, B2B businesses offer multiple pricing, volume discounts, and leverage an account manager to manage issues, while B2C businesses offer a single pricing tier for customers, a streamlined checkout process and leverage customer service instead to cater to issues.
B2B2C: Business-to-Business-to-Consumer
Now what do B2B and B2C have to do with B2B2C eCommerce? With the combination of these two business models, B2B businesses can now access all the benefits of B2C eCommerce that they were missing, without having to take on the B2C operations and responsibilities they intentionally avoided before. Now B2B companies will no longer have to be siloed from the customers, and instead have direct access to customer data so that they can help with rapid responses and improvements of their products.
Easy Control of Data
Traditional B2B journeys end when the manufacturers sell to their retailers. From there, retailers are able to sell at their preferred price point, apply their preferred marketing and sell to the consumers. By deploying a B2B2C model, manufacturers can now manage their brand all the way to the end consumer and access all the information without friction.
Extended Customer Base
B2B businesses usually have a smaller pool of businesses to sell to. By expanding to a B2B2C model, manufacturers can now leverage their partners’ customer base, boost their brand awareness and thus increase their overall product sales.
Reduction of Middle-people
As mentioned previously,B2B manufacturers tend to lose sight of the product and service once they have handed it to the retailer, thus allowing middle people to offer higher prices and take a cut off profits. By adopting a B2B2C model, manufacturers can now streamline the supply chain and eliminate those opportunities.
Increased Efficiency of Supply Chain
Typically B2B manufacturers have issues with delivering to customers in a timely manner. By adopting a B2B2C model, manufacturers can eliminate delivery partners and instead allow customers to get their goods more quickly.
While adopting a B2B2C model offers a variety of benefits, there are two main challenges you should be aware of.
Sharing Customer Base
When a manufacturer partners with a B2C business, both businesses will now be sharing the same customer base. The B2C business might be hesitant to share such valuable customer data that would lead to the manufacturer’s benefit. Both businesses might also be hesitant to split profits. We encourage businesses to discuss the concerns as early as possible and create an equally beneficial proposal to ensure a smooth transition into partnership.
B2B User Experiences
Another thing that B2B businesses continue to struggle with today, is providing B2C-like experiences across their eCommerce journey. B2B businesses will need to ensure that they have an adequate eCommerce solution and strategy across their all partner-sellers to maximize ROI. We encourage businesses to search for an eCommerce solution that is API based and with MACH based technology to ensure that they can design a highly customizable solution and make changes on demand while also maintaining full control of their solution. Of course not all MACH based solutions are alike and therefore you can use a Systems Integrator or Agency to evaluate vendors based on your specific requirements.
The intricacies of supporting a B2B2C business model can be quite strenuous on eCommerce vendors due to a high degree of flexibility, control, and customizability demanded. However, Elastic Path makes it easy to rapidly digitize your B2B2C ecosystem with the power of its API-First Headless Microservices solution, EP Product Experience Manager (PXM), and the dependable support of Composable Commerce XATM. Therefore, your business will be equipped to:
To achieve the aforementioned benefits, you can leverage a variety of specific commerce capabilities including:
In addition to these capabilities, Elastic Path will also ensure to onboard your team with sales and support training, provide guidance on the solution architecture and also be your first line of support for your entire solution so your eCommerce strategy is always in good hands.
So whether you’re an ISV who wants to add a white labelled commerce offering, a distributor or supplier network looking to provide value added commerce offerings to your business customers, or a fin-tech or bank organization looking to offer commerce functionality to your business customers, there is a place for you at Elastic Path. To learn more about B2B2C at Elastic Path feel free to reach out to one of our internal experts. We’d be happy to answer any questions you have.