E-commerce refers to the process of businesses selling products to customers online. The customer orders products online, and then the business or their fulfillment provider packs and ships the products directly to the customer. But what happens when the customer is not an individual consumer, but another business? This is called Business-to-Business, or B2B, e-commerce.
What is B2B E-commerce?
B2B e-commerce is when one business sells products directly to another business. This business model often caters to a few different types of customers, but it frequently involves wholesale orders in which the customer is a retail business buying products to sell in their store, such as a grocery store ordering items from different food and beverage brands or a boutique shop buying skincare products from a small business.
B2B sellers may also deal in bulk orders of supplies a business needs to operate. Think office supplies for large corporations, unprepared food, and ingredients for restaurants or other food preparation businesses.
B2B vs. B2C E-commerce
Direct-to-consumer e-commerce—also known as B2C or DTC—is when products are sold online and then shipped directly from the fulfillment center to the consumer, rather than another business. Because this usually means several small orders of only a few products instead of a large shipment of pallets, the fulfillment needs are often more straightforward, though requiring a high level of inventory management and visibility to stay on top of the ebbs and flows of e-commerce sales.
B2B e-commerce sales can vary significantly, from small enough orders to operate like any other e-commerce purchase to large supply orders for which items need to be selected from shelves and packed together into manageable shipments.
How B2B Fulfillment Works
B2B fulfillment begins with shipping products to the warehouse or fulfillment center where they will be stored and then prepared to ship to businesses as orders come in. Since inventory is shipped in bulk and then ordered in different quantities by the customers, the receiving warehouse needs to be outfitted for unpacking and organizing the inventory, then packing and shipping it according to incoming orders, and should have sufficient storage capacity as well.
Businesses usually buy products in much larger quantities than consumers, which means the B2B companies require a warehouse built to store large quantities of products, possibly over long periods of time while awaiting orders from big box stores. The warehouse also needs to be prepared to move and handle larger loads, keeping orders well organized and ready for when a large purchase is made.
Once inventory is received at the warehouse, B2B fulfillment works differently depending on the customer they are selling to. For bulk supply orders, storing products in a warehouse until ordered and keeping fulfillment simple should do the trick. In the case of wholesale orders for retail stores, however, the process can be a lot more complicated, requiring more of a constantly moving distribution center that covers everything from product mixing and packing to order fulfillment.
B2B e-commerce businesses must operate at a higher standard in order to keep ongoing customers satisfied. Businesses purchasing inventory for their retail stores need the reassurance that they will receive orders in a timely manner, whether set up on a recurring basis or ordered as needed. Because of the complex nature of e-commerce fulfillment needs of B2B businesses, the best process for handling it is with a third-party logistics provider (3PL).
What a 3PL Does for B2B Fulfillment
B2B fulfillment involves logistics just like a consumer-facing e-commerce business, which means these businesses can benefit from a 3PL. Instead of managing your own warehouse, which can often be expensive and limit your options due to what you can afford, a 3PL can handle everything from warehousing and fulfillment to replenishment and order tracking, streamlining your storage and shipping into one seamless process that gets the orders to your customers faster.
B2B e-commerce companies often cater to a variety of different customers. Some may only order one pallet of a specific product a few times a year, whereas another may have a custom order that changes every month. 3PL providers for B2B companies need to be prepared to manage a variety of order fulfillment needs, breaking down large freight orders into smaller, deliverable quantities.
Looking for a 3PL for Your E-commerce Business?
Smart Warehousing is designed to support your B2b e-commerce fulfillment needs! After all, what is B2B e-commerce without a strong 3PL at its back? With warehouses across the country prepared to handle any variety of products and fulfillment needs, Smart Warehousing uses the latest technology to bring you the best order tracking and visibility on the market across all of your incoming and outgoing inventory. Contact us today to learn how Smart Warehousing can change the way you think about e-commerce fulfillment.