Starting an organization is a tremendous task. All prominent businessmen are attracted to the B2B model due to the associated economics of transactions in large volumes. Integrating inventory management system software boosts revenue and market share even further. The overall marketing budgets are rising to 9.8% of the company’s revenues, whereas the growth rates for B2B product firms are 8.6% and 15.6%, respectively. Since the B2B wholesale business is competitive, many established and aspiring companies are interested in learning more about it. So, here in this article, we will study the meaning, Key advantages, features, and challenges of B2B Wholesale.
Overview of the B2B Wholesale Model
A business-to-business model of selling goods and services is referred to as B2B. Any producer will sell their goods to wholesalers, distributing them to other shops. The B2B market is categorized as B2B retail and B2B wholesale. Any B2B model’s primary partners are the manufacturer, wholesaler, and retailer. B2B wholesalers market and sell the goods to various enterprises. The purchasing businesses can use the products in their operations or resale them for profit. The enormous order sizes and long-term contracts make B2B wholesale transactions frequent and complicated.
B2B wholesale eliminates the need for a middleman because, thanks to technological improvements, wholesalers may assist producers and retailers worldwide. With wholesale deals, the products are simple to move and distribute, and these transactions efficiently transport many goods at once and have high order values. Therefore, sellers and buyers benefit in many ways from each B2B wholesale transaction.
Benefits of a B2B Wholesale System
In 2020, the market for B2B wholesale e-commerce was estimated to be worth 6.64 trillion USD. The major participants in this business model are drawn to its many benefits. The following are some of the primary advantages of the B2B wholesale model:
- Boost AOV and order volume: Compared to other business models, B2B wholesale has a higher average order value or AOV. Therefore, with long-term contract structures and high order quantities, the value of the custom-life time increases.
- Enhance brand awareness: Since B2B wholesale may sell their products to retailers in huge quantities, there is no need for mediators. Brand recognition that B2B wholesale enterprises unintentionally establish makes it simple to grow your organization.
- Maintain a fixed margin of profit: Every B2B wholesaler is eligible for a predefined profit margin between 3 and 10%. A fixed amount of items are sold to merchants for a profit, generating excellent development potential.
- Improve control over the supply: Retailers’ and manufacturers’ supply and demand changes are entirely within the control of B2B wholesalers. The issue for retailers is purchasing in huge quantities when manufacturers need a lot of capital. The wholesalers who provide better supply management successfully address these issues.
Major Challenge for B2B Wholesalers
We all know that nothing is absolute, so, like other platforms, B2B wholesale has some limitations. Around 25% of B2B businesses are using their actual digital quotient of the wholesale platform, and there is much more to consider in B2B inventory management system software. So, some of the significant challenges that B2B business platforms faces are:-
- Technology Transformation: Retailers and manufacturers are trying to eliminate intermediaries from the distribution chain. Therefore, any B2B wholesale needs to provide affordable prices while keeping up with technical improvements. B2B wholesale may not be able to take advantage of the new market’s advantages without technology.
- International Competition: It is challenging to compete globally, particularly for B2B wholesale enterprises that must balance their pricing margins. The increased strain from the worldwide competition hurts these companies’ thin profit margins. Therefore, companies must maintain cost management while recovering from the effects of global competition.
- Retail Consolidation: There haven’t been many B2B wholesalers available to supply supermarkets, office supply stores, and retailers of home electronics and DIY products. Therefore, any B2B wholesale company must consider this retail consolidation, which involves providing for the clientele and concentrating on niche markets.
Leading eCommerce Platforms for B2B Wholesale
From 2021 to 2028, the annual growth of the B2B eCommerce market is expected to expand at a rate of 18.7% as the B2B Wholesale business is looking for automation and digital technology to fulfill the existing gaps in revenue and sales. So, here we will discuss the best eCommerce platforms that cater exclusively to the demand of the B2B Wholesale business model.
OroCommerce is an open-source multichannel inventory management software for large and midsize companies. It enables users to set up multi channel ecommerce stores. It consists of key features such as user authorization, rule-based workflows, content management and account management. It offers you the multi-website potential that enables retailers to operate throughout the globe in various languages and take payments in multiple currencies.
Any large-scale online retailer can choose Shopify Plus from the technological giant Shopify, which has produced many technical solutions. As a result, B2B wholesale businesses frequently employ the highly scalable and dependable Shopify Plus e-commerce platform.
BigCommerce is an all-in-one eCommerce platform that can cater to big and small companies. It provides you with an extensive option of reporting, personalization without knowledge of technical skills, and pocket-friendly prices.
So, hope now you are well aware of the B2B wholesale platform, its benefits, and its features. It is all about performing business with other organizations after understanding the needs and challenges. The penetration of the B2B wholesale Industry is currently limited, but it has a significant probability of expansion in the future. Improving digital technology using a leading B2B order management system could be a game changer for your organization. Selecting the best Wholesale platform can be the primary catalyst for your organization.