February 19, 2019
Why B2B Ecommerce is stronger than B2C (for now)
Ecommerce can be divided into two different types of online selling. B2B is Ecommerce between two businesses. B2C is Ecommerce between businesses and a customer. It would therefore come as a surprise to many that B2B is a more profitable sector of Ecommerce than B2C. Surely there are more ordinary, everyday consumers willing to buy whatever products the internet has to offer than corporate bodys. This is not the case however, B2B makes up a massive 70% of the overall Ecommerce activity in the UK (Mintel reports). Furthermore, B2B ecommerce is predicted to reach $1.2 trillion and account for 13.1% of all B2B sales in the US by 2021 (Forrester report). There are multiple important reasons for the dominance of B2B, reasons that will be learnt as this article is read.
B2B’s Success Is Done To The Size Of Individual Businesses
The most appetising factor that selling to businesses over customers has got the be the sheer buying power. The capital available to a national corporation compared to the average joe buyer is potentially going to be many times greater. Therefore, the scale of online selling activity that businesses participate is going to be on an unprecedented scale more than B2C. It is also a lot easier to target consumers in the B2B sector compared to the B2C one. This is because it is the needs of a company is much likelier to be straightforward and shared with similar enterprises compared to the individual, more specific needs and wants of a customer. Therefore, B2B Ecommerce merchants can be more efficient in designing and marketing their products to the desires of their customers than a B2B Merchant.
However, working with B2B does not come without its downsides. For example, there’s a far less flexible target market in B2B Ecommerce. When it comes to customers there are hundreds of different features that you can target (age, gender, hobbies etc.). However, when it comes to B2B, you can only really target a business based on what products or services it provides. Therefore, your scope for finding customers for your online selling is limited if you operate in the B2B sector.
B2C Is Behind But Potentially Not Forever
B2C Ecommerce is obviously not in the same league as B2CAs shown in the previous point, there is far more that a B2C Ecommerce retailer would be able to do with their trading than B2B merchants. Therefore B2C retailers are able to produce a more varied type of goods/services, making it easier to find a gap in the market. As a result, it is easier to become an online retailer in B2B Ecommerce compared to B2C. As there is more you are able to do in this market, there is more opportunity for success.
This may be the reason why B2C is (slowly beginning to catch up) with B2B. From the graph below we can see that the gap between B2B market worth is closing with ever coming year. This could be because of the increased accessibility to the online market (letting more individuals to control more of it). Therefore, if these trends continue, one day in the distant future, Ecommerce may be controlled by the people and not the corporations.