As we step into 2024, business-to-business or B2B e-commerce is showing itself to be the hottest new trend in the industry. To take advantage of its rising popularity, you’ll require strategic planning and an understanding of how this business landscape is transforming.
In this article, we’ll guide you through creating a robust B2B e-commerce business plan, selecting indispensable software tools, mastering accounting practices, and addressing the unique challenges of B2B marketing.
What is the B2B e-commerce business model?
The B2B e-commerce business model involves businesses selling directly to other businesses online. This could include transactions between manufactures, wholesalers, retailers and other businesses. For example, Alibaba allows businesses to buy products in bulk. B2B e-commerce businesses can also sell products such as packaging or merchandise.
Unlike with B2C, B2B businesses will typically cater to specific needs and allow for bulk orders, customized pricing and negotiated terms. Hence, there’s a need for more sophisticated tools and systems.
E-commerce platforms are transforming B2B for 2024
According to recent market research on the B2B e-commerce industry, the global market is expected to grow from USD $7.1 trillion to USD $26.6 trillion by 2027. On top of that, a B2B buyers report has shown that competition is fiercer than ever with a massive 90% of B2B buyers being willing to turn to a competitor if their current supplier wasn’t keeping up.
Shopify partners with Faire to expand B2B offering
With the upward trend in B2B, e-commerce platforms are investing heavily into the market. Shopify has dubbed B2B “the biggest commerce opportunity of 2024.” A partnership between Shopify and Faire, a leading B2B marketplace, was recently announced. The deal involves expanding Shopify’s B2B offerings.
BigCommerce and WooCommerce extend B2B payment options
Similarly, other e-commerce platforms have recently expanded their payment options for B2B retailers. BigCommerce have recently launched their B2B Edition Invoice Portal that allows merchants to include invoice payments within a centralized online purchasing workflow. WooCommerce have partnered with Veem to offer the Veem B2B extension on their marketplace.
How to create a business plan
To start a B2B e-commerce store, you’ll need to create a business plan. You can start with a business plan template or create your own document going over the following sections.
- Executive summary: A 1-to-2 page overview of the pain point you’re addressing, the business idea, any existing company history, your competitive advantages based on a market analysis (such as a SWOT analysis), financial projection/plan, and finally a timeline of target milestones.
- Company overview: Outline what your brand name and style will be, how your business will be structured, a mission statement, team structure, and any other background information that may be relevant.
- Financial plan: Of course, all businesses have to rely on the bottom line. Calculate the potential revenue and expenses to determine feasibility. If you’ve already started your business, being able to showcase a strong balance sheet, income statement and cash flow statement will significantly increase your chances of getting an investment.
- Marketing plan: Last but not least, how do you plan on reaching potential customers? B2B marketing may differ from B2C depending on your target audience. You may look to LinkedIn ads over Instagram ads or a referral program over influencer marketing.
What B2B e-commerce software tools do I need?
In 2024, you need to be implementing a variety of software to run a B2B e-commerce business successfully. These tools should be able to communicate data with each other to ensure your operations are seamless. Here is a list of software tools you need:
- E-commerce platform: To start, you’ll need an e-commerce platform such as Shopify, BigCommerce or Magento for your website. It should come with B2B features such as bulk ordering, customizable pricing and a wide range of integrations to the other tools on this list.
- Payment gateways: Then, implement a payment processing gateway to handle B2B transactions. For example, Stripe, PayPal Business and Braintree.
- Accounting or ERP software: The main source of truth for your financials should be an accounting software. Xero, QuickBooks Online, Sage and MYOB are popular choices for SMBs. These can integrate with your e-commerce platform through an accounting integration. An ERP will allow you to manage other business functions on top of finances and is ideal for larger businesses.
- Inventory management: To future proof yourself, implementing an inventory management system (IMS) will help you when scaling your business. These tools can help with order fulfillment, demand forecasting, and automation. Examples include Cin7 and Unleashed.
- B2B marketplace: A B2B marketplace will allow you to connect with suppliers and manufacturers to help streamline the procurement process. For example, Alibaba, Faire and Amazon Business.
- Shipping and fulfillment: You can manage shipping yourself through carriers like DHL or FedEx. Tools such as Shippit and ShipStation can integrate with multiple carriers and help you find the best rates for each order, often with discounted rates. Otherwise, you can entirely outsource your shipping and fulfillment to a third-party logistics company (3PL).
- Analytics and reporting: To track your performance, analytics and reporting tools are necessary. Track website and user behavior with tools such as Google Analytics and Hotjar.
- Marketing tools: Last but not least, there are limitless marketing tools available to B2B e-commerce businesses in 2024. Depending on your marketing strategy, you may need SEO tools, email automation software, customer relationship management (CRM) software, and social media management tools.
How to manage accounting and bookkeeping
Though it may not be the most exciting part of running a business, accounting and bookkeeping are crucial to financial stability and compliance. Fortunately, there are now a range of tools that can help you with simplifying these processes.
Accounting software and chart of accounts
To start, choose an accounting software to help you with tracking, reporting, invoicing, taxes and more. Then, decide on how to structure your finances with a chart of accounts. This involves categorizing your transactions under sub-categories within income, expenses, assets, liabilities and equity.
Track income and expenses
You can use one of Amaka’s accounting integrations to automatically sync data from your e-commerce platform to your accounting software. You can use a default set of accounts created by the integration or map your transactions into your own chart of accounts. This means your income is automatically tracked and recorded in the right categories. You will need to track invoices and receivables as well.
Popular accounting integrations for e-commerce platforms:
- Shopify + QuickBooks Online
- Shopify + Xero
- BigCommerce + QuickBooks Online
- WooCommerce + Xero
- Square + QuickBooks Online
- Squarespace + Xero
On top of tracking your revenue, you need to keep a record of all expenses and payables. This is necessary for tax compliance purposes and will help you claim tax deductions. You will need to track inventory and receivables as well.
Bank reconciliation and auditing
Bank reconciliation involves going through your business bank account statements and matching transactions to those in your accounting software. This process will help you identify discrepancies and ensure your records are accurate. Amaka’s accounting integrations will automatically match transactions from your e-commerce platform to those in your bank feed, saving you time and resources.
On top of reconciling transactions, it’s important to regularly audit your financial records. This will help you safeguard financial information, maintain compliance, as well as rectify any discrepancies or potential issues.
The tax regulations in each region are different and you need to stay informed. In general, you will need to keep accurate records, charge and pay sales tax, and comply with tax filing deadlines. Ee highly recommend B2B e-commerce businesses at all stages to work with a tax accountant.
How is B2B marketing unique?
Compared to B2C, B2B marketing is often more complex and happens over a longer sales cycle. Decision-makers tend to do more research meaning in-depth, informative content needs to be available. Reaching potential customers through the right channels is crucial. Your target audience may be on LinkedIn or industry-specific publications rather than on Facebook.
Additionally, B2B marketing often requires more personalized and targeted communication. Since each business is so different, decision-makers will want to see that you can help with their specific needs. Building long-term relationships and ongoing contracts is a great way to overcome this challenge.
Key takeaways on starting a B2B e-commerce store
Ultimately, adaptation and strategic foresight are the keys to succeeding with growing a B2B e-commerce company. From the pivotal role of e-commerce platforms to crafting effective business plans, selecting the right tools, and addressing financial and marketing challenges, the path to thriving in B2B e-commerce requires a holistic approach.