Creating a Better B2B Ecommerce Experience on Hosted Platforms
Wholesale buyers resemble retail shoppers in a fundamental way: they both want an efficient, seamless customer experience. To date, however, most ecommerce innovation has been found on direct-to-customer sites. In this Recommerce episode, Tiffany, Command C’s Tech Lead, and Sara, Founder, talk about how retailers can create a modern ecommerce experience for B2B on a hosted platform. You’ll learn:
- How hosted platforms support the difference between B2C and B2B selling, including order volume, pricing, and shipping
- Backend recommendations for setting up your B2B site
- Questions about user experience every B2B merchant should ask
- Extensive details about the Shopify Wholesale channel and more
Full Episode Transcript
Tiffany: Hello. I’m Tiffany Kuchta, Tech Lead at Command C. I’m here with Sara Bacon, our Founder.
Sara: Hey Tif. So today we’re going to talk about the options for merchants who are on hosted solutions, such as Shopify or BigCommerce, to get their B2B businesses selling online. This represents some unique challenges as we know, but first, let’s talk a little bit about the current landscape for B2B ecommerce. Forrester estimates that B2B ecommerce will reach $1.8 trillion and account for 17% of all B2B sales in the US by 2023. Which means a few things.
It means that currently having a B2B site is a huge differentiator. And it means that there’s increased competition and pressure for B2B merchants to have an online ecommerce presence. There are also some really creative and exciting opportunities for B2B because of the digital channel. Opportunities like personalization, customer loyalty, and leveraging data to make business decisions that weren’t previously available or at least weren’t easy in offline channels. But we’ll save that for another podcast. For now, let’s keep the focus on how to get around some of the barriers to creating a B2B presence on a hosted solution.
Forrester estimates that B2B ecommerce will reach $1.8 trillion and account for 17% of all B2B sales in the US by 2023.
Tiffany: So one of the biggest most obvious challenges is the fact that we’re talking about two very different distinct customer experiences. Your retail business is selling directly to customers with small orders. I mean even folks who are ordering 10 or 20 of something are still ordering a comparatively small amount. That user experience is necessarily very different than the user experience that you want to present to someone who is purchasing thousands of your product, or who may need to purchase it on a regular basis.
Pricing, Payments, and Shipping
Additionally, as we start to look at the differences between the customers, between the user experience that we’re providing them, we have to think about business related things such as pricing. So how do you determine how the platform is going to display and also process checkout for pricing that is very, very different. And this sort of dovetails nicely into an analysis of customer groups. We’ve put together B2B solution plans for customer-based pricing that differs per customer, and then we’ve also done it where it’s nice and easy to chunk it into groups. Sometimes those formulas are straightforward. Sometimes we’re looking at a B2B price that is 10% reduced from the B2C price. So that’s a very easy formula for us to apply to showcase pricing across the board.
But it’s not always that simple. And so having the technological mechanisms in place to determine not only what the customer is going to see, but how they are going to place that order, and then ultimately, how they are going to check out. Those all become challenges that we have to tackle.
I mentioned how they are going to check out. When we think about that, we’re talking about something as basic as payment methods. It often doesn’t make sense to put an enormous order on an American Express card and call it a day. Oftentimes, B2B merchants will have a very well established system for handling payments. A lot of times it involves a purchase order, and you have to understand how those payments need to be processed and how that differs between your customer groups. As you can see, your ecommerce platform starts to get more and more complicated the more cases we consider.
As we move from payment, then we have to think about shipping. It’s not the same to ship 20 pallets of something to a location as it is to send a single box through UPS. And so understanding how those shipments get routed and how you’re going to communicate that information to your warehouse. How that shipping data gets communicated back to the end customer, all of those things add layers of complexity on top of what otherwise seemed like a pretty basic endeavor.
B2B Challenges Specific to Hosted Platforms
Sara: Yes. So, those are some of the challenges of B2B itself. What are some of the challenges that are unique to a hosted platform like Shopify or BigCommerce? There are specific constraints to a hosted platform, such as those two, that we don’t encounter in the same way with an open source platform like Magento. So, I’m wondering if you can talk a little bit about the challenges for a merchant who is really committed to a hosted platform or perhaps is already running a profitable B2C business on a hosted platform, and how they find themselves sort of constrained with a situation like that.
One of the biggest challenges is sharing inventory between a retailer’s B2C and B2B experiences.
Tiffany: Yeah. I think that the biggest one that comes up all the time for me has to center around aggregation of inventory and sharing inventory between the two types of experiences. It’s very important to protect yourself against overselling especially when we’re talking about the potential for an absolutely enormous order to come in. And so making sure that you’ve established a mechanism that lets you share inventory between those experiences can become challenging when you don’t have full complete control over checkout, for example. Or full complete control over the actual price of a product. We find that in hosted platforms, the data structures are rigid and that’s a humongous pro but it also can be a bit of a con when we need to be able to have them be a little bit more flexible than they are. So defining 25 separate customer level prices for a single product is just not something that is supported without a little extra help in any of those hosted platforms.
Sara: Tell me a little bit about some strategies for solving this scenario.
Tiffany: I like to think about this as a decision tree. The first thing to think about is does the platform have a native solution for supporting B2B? And if so, let’s learn a lot about that and figure out if it works for us. And if not, then we sort of go down this other path which I’ll be happy to talk through the details of, where we look at solutions that look at it from the outside and create, some folks might say, workarounds. But they’re real solutions that are viable and that can work and as long as you understand the implications of each.
Sara: So Shopify has a wholesale channel. Let’s talk about that solution first.
Tiffany: The wholesale channel is a really great way to solve that inventory problem. It’s a great way to solve the inventory problem because all of the store’s inventory is managed inside the Shopify instance and the wholesale channel is truly a channel. It’s just sort of another place to list the product.
The challenge with the wholesale channel from Shopify specifically is that you don’t really get a ton of control over the user experience. Now Shopify has done an absolutely amazing job putting together a user experience that meets many merchants needs. But if yours differs from that, you don’t have the same level of control that you have over the B2C site for stylizing the front end and customizing the user experience. Even establishing pricing can still sometimes require some additional help.
So the wholesale channel is a great solution if you have a very basic set of needs and if you, for example, are really comfortable with the workflow that you’ve already established and know that your customers. Your B2B customers aren’t going to have a problem with using this type of user experience. In other words, if the wholesale channel already matches very closely to what you’re already doing, or what you want to be doing, then you have the opportunity to leverage something like this without a lot of modifications.
There are other platforms that have native B2B built-in solutions as well. BigCommerce has one. Magento, which is not a hosted platform, has a pretty robust B2B suite built into it – after version 2.2, anyway. Considering those tools that have a native application is probably a good fit for you if your needs are already aligned with them.
Sara: Mm-hmm. Got it.
Tiffany: Most of the merchants we work with struggle a little bit with being unable to control the user experience because everyone is just a little bit different and they wanna be able to optimize, right? Which is a whole other podcast.
Interlude: You’re listening to Recommerce, a podcast for e-commerce wearable brands navigating technical complexity and change. Brought to you by Command C, a development team that saves ecommerce retailers from outdated tech and ineffective operations, with a strong focus on Magento and Shopify Plus. You can learn more about how we help at commandc.com.
Sara: So, I can imagine many businesses think, “there is no way that this is going to work for me.” Or, after signing up for Shopify Plus and thinking that they could use the wholesale channel, they realize on a deeper dive that their business requirements are maybe just a little more complex than the wholesale channel can accommodate. Or they wanna grow in ways that feel somewhat limited with the wholesale channel, as it stands now, in Shopify. What sort of recommendations do you have for merchants who fall into this category?
Two Different Approaches to Facilitating B2B and B2C Together
Tiffany: So there are really two ways to think about making that work for you. The first one is the one that probably comes up most often if you do a search, or if you talk to anyone who has a little bit of exposure to this world, and the suggestion is, oh, “there’s an app for that.”
And yes. There are a ton of really amazing apps – let’s just use Shopify as our guinea pig and the Shopify ecosystem – that will accomplish and overcome a lot of the challenges that we mentioned earlier. They will allow you to get special customer pricing in front of customer groups. They’ll allow you to modify that pricing at the point that the customer is checking out. You can leverage apps to think about using an inventory management system that would help to keep all of your inventory earmarked between B2B and B2C. You can leverage Shopify scripts if you’re a Plus customer to get pricing modifications in the cart.
You can start to add all of these things on. You can add these layers. You can also accidentally, very easily create app soup where you are looking at requiring a ton of third party code to support what is an essential business function for you and will only become more so as you move forward. So there are some challenges and some concerns with doing that. We do a lot of theme customization to support things like this. I mentioned earlier that the shopping experience is necessarily quite different. And that often means that what you need is a big bulk ordering tool.
So you need a page on the site that just lists all of the products and allows someone to go through it like a spreadsheet. I’m so sorry I said that but like a spreadsheet and check off-
Sara: Don’t hate on spreadsheets.
Tiffany: Okay. And check off all of the quantities for everything that they want to order. And that’s a very common comfortable B2B experience for ordering but if your store hosts several thousand products, how do you generate a user experience like that, that isn’t terrible?
Tiffany: And that’s a design problem but it’s one that we can solve by customizing the front end of the store. But again, now we’re layering complexity into your single Shopify store because you have a whole subset of templates and functionalities that apply only to your B2B customers.
We’ve seen the most success in actually biting the bullet and managing two separate customer experiences: B2C and B2B.
At a certain point, if you’ve already created all of this separation, and if you’ve already done all of this, it might actually make more sense to leverage the second solution that I feel often comes into play here. What I’ve seen the most success in actually biting the bullet and managing two separate customer experiences. Manage two separate Shopify stores.
The biggest challenge you have to overcome when you do that is that you need a way to handle aggregate inventory, and there are tons of great tools out there that can sort of exist as your ERP hub that handle inventory management, and then can also grow the operations end of your business by thinking about order fulfillment and transmitting shipping information back to the customer, etc.
So, though it does create a little bit of duplication, and we do have to work very hard to eliminate that duplication, it lets the pieces that are necessarily different really shine as being different. It also lets you create an experience that’s exciting. Because let’s face it. The purchasers who are purchasing from your store also use the Internet to buy things for themselves, and they expect the experience to be good, and they should expect it to be even better B2B then it was B2C. Unfortunately, that’s not really the reality right yet.
The B2B purchasers who are purchasing from your store also use the Internet to buy things for themselves, and they expect a good experience.
Sara: And, there’s just so much opportunity in nailing that when so many businesses have not yet achieved an amazing digital B2B experience. The possibility in achieving that is just a major business case.
Tiffany: I would absolutely agree with that. I mentioned it as a design problem and I think that with the design problem, like you mentioned Sara, there’s so much potential there. There’s so much room to grow because B2B has historically been done over the phone or in spreadsheets. Sorry.
Sara: There’s so much potential and I want to bring the word innovation to the table. I think that this industry is just going to be blown wide open once merchants are comfortable and accepting that, yeah, they might need a little more staffing to deal with the idea of having two different stores, but the potential for revenue and increased margins is in areas that haven’t ever been explored in B2B are just exponential.
Tiffany: Yeah. And as a developer, I really, really, really don’t like to repeat myself, right? It’s a whole philosophy not to build things twice. But this is one of those rare cases where I think the point for me where I realized that maybe having two separate stores is the right answer is when I realized that these are two completely different experiences.
Sara: And problems to solve for. Totally. Awesome. Well, this was a really informative conversation. Thanks, Tif.
Tiffany: Thanks Sara. I enjoyed chatting about it today.