Challenges in B2B e-commerce

Digital sales channels are vital for all companies today. There’s a great need in the business-to-business (B2B) sector today to adopt private purchasing practices in business and to take advantage of the same opportunities and benefits of e-commerce that exist in the private consumer sector.

In Switzerland’s B2B sector, there are still lots of companies, mainly SMEs, that do not use e-commerce yet. This means they still rely on traditional sales based on their field and office-bound sales forces, and still produce huge amounts of paper catalogues and brochures. Digitization means face-to-face customer relationships are becoming less and less significant. Customers expect maximum flexibility for orders and when using e-commerce systems to place orders. 

Lots of B2B companies have yet to recognize the potential of e-commerce or see major challenges in its implementation. The fear of cannibalizing the sales channels, IT dependencies, new pricing systems and changing organizational structures also represents a major hurdle which must be understood and tackled before launching sales via an online shop. 

A further challenge for retailers is that more and more manufacturers are shifting towards direct-to-consumer (D2C) sales. This means they sell their products directly via their own online shop or bricks-and-mortar stores. A recent example is Lego, which opened its first Lego Store in Switzerland at the Glattzentrum in autumn 2022. Manufacturers benefit from higher margins in D2C sales, they can decide on product ranges themselves and respond more quickly to customer feedback. 

B2B marketplaces

What’s now established practice in the B2C sector is becoming increasingly important in B2B.  That’s the marketplaces. A growing number of buyers are purchasing their products via marketplaces in B2B. The benefits of marketplaces are their extensive reach, the opening-up of new markets and target groups and the simplicity of sales. SMEs with little capital and limited resources can penetrate the market quickly and without major investment in an online shop system.

But there are downsides to marketplaces too. The fees and commissions charged need to be looked at closely. A marketplace may not be suitable for the entire produce range. Retailers present on marketplaces also face direct price competition from other providers, and sometimes even the marketplace itself, which can also act as a retailer. Marketplaces sometimes even manufacture and stock bestseller products themselves (e.g. Amazon Basics). But such scenarios are the exception as marketplaces depend on retailer commissions and the variety of products achieved thanks to the presence of retailers.

What are the major B2B marketplaces?

While Amazon Business and Alibaba lead the field in terms of B2B marketplaces at global level, few have really made their mark in Switzerland so far. In Switzerland, the B2B marketplace generating the highest revenue is Pistor (bakery/confectionery, culinary and care products). The other marketplaces of importance internationally and for Swiss business customers include the German Mercateo (now Unite) and Wucato (Würth).

While B2B is lagging behind B2C in e-commerce in Switzerland, the potential of marketplaces is huge and shouldn’t be underestimated. As an additional sales channel and to reach new customer segments, it may well be worth selling products via a marketplace.

Conclusion

E-commerce can ensure the survival of your B2B company in today’s competitive and distributive age. That’s why reflecting on the right approach is crucial. First of all, a sound, comprehensive strategy is needed that’ll receive the constant support of the entire workforce and management. As markets are so unpredictable and agile, the strategy needs to be continually reviewed and tweaked. This isn’t an easy path and calls for extensive change management projects in many companies.