Purchase channels today are in a state of flux, putting the onus on sellers to cater to all relevant buyers and end-users, including wholesalers, retailers, and e-commerce customers. It’s called B2E–or business to everyone–and it necessitates that companies diversify their distribution channels to optimize selling potential.
What a company stands for and what it provides don’t need to change, but proper supply chain management varies dramatically by distribution channel. These are some of the key differences between B2B and B2C supply chains and some of the tools and tactics that are helpful in managing a dynamic operation.
1. Sales volume.
Because business clients are usually making bulk purchases for production needs or to resell in retail, B2B purchase orders are naturally larger than in a B2C supply chain, which involves consumers purchasing only for their own personal needs. This creates significantly different inventory planning needs. Assuming the supplier relationships is favorable, many B2B orders are repeated, making volume more predictable and inventory planning easier than with B2C.
Whoever is overseeing your fulfillment operations should be employing inventory management software to allow for total visibility and planning optimization.
2. Supply chain lengths.
While B2B orders typically outweigh B2C orders, they often involve only the two organizations participating in the transaction, resulting in a shorter supply chain. The B2C supply chain generally moves through multiple stages, including producers, wholesalers, and retailers.
3. Negotiating power.
In a B2C supply chain, there’s little to no negotiating. The business has the bargaining power because it’s a larger entity and no one is brokering each sale. In a B2B supply chain, the absence of negotiation between both parties would be rare; in fact, it tends to be a recurring event, including factors such as payment terms, pricing, quantities, and various performance indicators.
B2B supplier negotiations are not just about price; they’re about maximizing performance and fostering mutually beneficial, long-term relationships. These conversations should be approached with a holistic outlook, with the end game being to foster agreements that meet everyone’s objectives.
4. The seller-buyer relationship.
The B2B supply chain generally has fewer customers with sales historically being relationship based. In a B2C supply chain, there are vast numbers of customers, with much emphasis placed on gaining new customers, increasing average order value, and maintaining brand loyalty. Both types of customer relationships are immensely valuable but must be managed differently. The common thread that runs through both is personalization.
E-commerce has made B2C transactions fast, easy, and seamless, and that’s permeated the B2B world. While B2B customers are making decisions based on business needs, they have no doubt experienced the convenience of B2C supply chains in their personal lives and are probably seeking some level of that in all e-commerce interactions. Business customers today expect to be able to do everything from perform supply chain research to make transactions online. To that end, a company’s digital offerings must be tailored to the expectations and behaviors of both B2B and B2C customers.
5. Delivery time: speed vs. punctuality.
B2C buyers are typically more interested in fast delivery, whereas B2B customers prioritize reliable delivery based on a predetermined schedule. But there are consequences for late deliveries in both instances.
With consumers, the inconvenience can result in bad reviews, customer service calls, and lost business. In the B2B world, missing a delivery window–and that means being early or late–not only harms the seller-buyer relationship, but can cost suppliers a flat rate penalty or percentage of the cost of goods.
B2B packaging is much simpler. The buyer isn’t concerned with the emotional experience packaging can create; they need it to be on time, complete, and undamaged. For storage purposes, it also helps if boxes are easily stackable.
Consumers are a different story, for two main reasons. First, the emotional impact that aesthetically pleasing packaging can have on a customer has been proved time andagain to improve brand perception and increase repeat purchases.
Then, there’s the product safety. B2C orders are shipped in individual parcels, with one or several items, unlike B2B packaging, which is often tightly packed, with the density serving as protection in transit. Especially if packaging is not the right size–whether the box is too big, the void fill is flimsy, or a polybag was mistakenly used instead of a box–the items may not be adequately protected. Because B2C orders are often more vulnerable to damage in transit, it’s worth exploring customized B2C packaging options.
Advancements in e-commerce technology have created both opportunities and expectations for the variety, availability, and purchasing methods of products and services. Catering to all possible customers allows each business to measure its success with various models and customer types, and scale its overall sales approach–its B2E strategy–accordingly.
The post 6 Ways to Optimize Your Supply Chain for Every Customer appeared first on Inc. and is written by Maria Haggerty
Original source: Inc.