What it takes to expand into B2B
After spending months, if not years, developing the best possible product that has now proven to meet online customers’
expectations, the next step many e-commerce owners wish to take is selling wholesale. The benefits can be enormous as this
may enhance a brand’s image by having its products displayed in physical stores, making it possible to expand production
capacity based on long-term agreements and business relationships.
But getting ready to venture into what amounts to a whole new market with its own demands and constraints means not only
developing a strategy with specific marketing and sales tools but also to be in a position to deliver once a contract is signed.
Because, as Jake Rheude, marketing director for Red Stag Fulfillment points out in an article at the Shopify website, “customer
support is critical. If you receive a call or email inquiring about the status of an order…better be able to provide a detailed
explanation of the order’s status…Order fulfillment processes [in wholesale] should meet, if not exceed the expectations of your
customers,” he said. (1)
To B2B or not to B2B?
Which brings up one of e-commerce owners’ major concerns about venturing into the wholesale market: the costs of fulfilling those wholesale orders. This may be addressed through careful planning and the revenues that B2B orders—sizeable by definition—will involve. As TradeGecko—an inventory-warehouse cloud-based software developer—points out, higher sales volume will make it possible to negotiate raw material at lower prices while initial costs can be reduced by re-organizing work-and-storage space.
Moreover, TradeGecko says, “choose your best-selling products and take a real look at them. Decide if production of those
items can be scaled…with your current production methods.” (2) After all, one does not need to introduce one’s whole
line in B2B; in fact, an e-commerce firm may decide to reserve some products for its site. As for the fear of seeing one’s brand
sold at prices so low that this will affect one’s online business, TradeGecko says, “spell everything out in your terms and
conditions! Also, let’s not forget the silver lining – larger volume of orders!” And to
Wholesale business thrives purely, only, on hard work and knowledge… You can’t stop learning in the wholesale business. Raviraj Hegde, vice president of growth, Emerge
make sure B2B will complement rather than undermine one’s e-commerce, one should research retailers to identify those whose style and clientele will be a good match for one’ products, TradeGecko adds.
Learning the B2B lingo
But before one tackles retailers, a whole vocabulary along with the ins-and-outs of that field must be mastered, explains Raviraj Hegde, vice president of growth at Emerge.
“Wholesale business thrives purely, only, on hard work and knowledge,” he said. “You can’t stop learning in the wholesale business. [But then] there are a lot of things, terms and waysthat could help making your wholesale a success.” (3) For instance, Mr. Hegde said, “the wholesale price set by the vendor, and the retailer overhead, due to their specific terms, together makes the ‘costs with terms.’ Vendors want to know that extra cost you put on the wholesale price before you sell.” “Net payment terms” refer to the day by which a retailer must receive payment, and “cost with terms” the wholesale price set by the vendor together with the retailer overhead and this, according to their respective terms.
Know thy potential buyers This done, an e-commerce owner must learn how those retailers work. “You need to know how your buyers like to buy and what they respond to,” said Forbes magazine contributor AJ Agrawal. (4) “Without understanding what they care about and their purchasing path, you’re going to struggle to figure in their minds… When you’re just starting out you should focus on finding what their motivations, pain points, and buyer journeys are.”
However this can be easier said than done, Mr. Agrawal points out. So if at first you don’t succeed, try and try again: After all, major corporations have specialists constantly rethinking and adjusting their strategy, he said.
Once the most likely wholesale buyers have been identified, opinions vary among marketing experts as to how to approach them. Some say that setting up the required online tools will suffice as wholesale buyers are busy people wanting to select, negotiate and purchase online. But, one e-commerce owner noted, having a wholesale section listed at one’s homepage and trusting that “if you build it, they will come” is not enough. Several marketing experts agree, still believing in the power of personal contact—people are still people, they say. If one has limited means, e-mail could be an option, addressing
it—or trying to—the retailer’s decision maker.
An effective way to meet retailers can be wholesale and trade shows. Attending as a visitor may serve to study the market, identify trends and competitors—which may help position one’s product on the market—and maybe meet buyers. For those willing to invest in renting a booth—fees can run into the thousands of dollars—such shows may prove an opportunity to speak directly to buyers with one’s products for them to see.
Marc Wayshak, a sales strategist and contributor to Entrepreneur Magazine, takes this concept of personal contact a step further and recommends going directly to a company’s decision makers if its sales and marketing staff does not have such power. “The answer is simple: Sell to them in person, whenever humanly possible. Hop on a train, get on a bus, book a flight, drive a few hours. Do whatever you must to get a face-to-face meeting with decision makers at every business you’re trying to sell to.” (5) But whether one deals with sales and marketing people or decisions makers, nothing beats building relationships.
Setting up a wholesale B2B section at one’s e-commerce site
No matter the B2B strategy, one’s e-commerce site must be ready for wholesale inquiries and orders. The wholesale dropdown menu in one’s header should give access to all product, price, terms and payment information that wholesale buyers may need to make decisions
Information and material should include:
● A dedicated wholesale catalog that can be printed.
● Product description. Since this may be reviewed by a wholesale buyer’s various departments, it should include details required by sales and marketing people as well as management and technical/specialized staff. It should also highlight what sets those products apart from competitors.
● Prices. While some e-commerce may hesitate to publish prices, the risk is that wholesalers may leave a site if they can’t get full information to consider a transaction. An option may be to indicate that prices will vary according to quantity purchased and invite wholesalers to inquire.
● Information on payment channels and terms. If possible, one should offer various payment methods such as debit and credit, line of credit, digital wallet, e-mail/text payments and ACH/e-check.
● Carts that make it possible for wholesale buyers to file price inquiries on specific products, to order and/or re-order, and even to request having one’s order delivered in several shipments at different dates.
● Wholesale terms and conditions as well as delivery terms.
● The full contact information—e-mail, phone numbers—of one’s e-commerce representative. The people listed should respond to B2B inquiries immediately to avoid the risk of losing sales. This may prompt an e-commerce owner to have sales representatives on staff, or to assign some of their team members to B2B inquiries.
You need to know how your buyers like to buy and what they respond to. AJ Agrawal, growth marketer and Forbes magazine contributor
Telling your story
Finally, one more element must figure both at one’s e-commerce site and in the material to be e-mailed or handed out at meetings.
“The B2B market is unique because your company is as important as your product. Long sales cycles and technical products place a premium on company trust,” writes Michael Sarrow, an author at DynamicWeb.(6) “Your webshop visitors not only look for product information but also company information. Before they buy, they want to know that your company will deliver on its promises.”
Entering the wholesale market involves a great deal of work but it’s definitely worth it! So the best to you if you decide to take up that challenge.