In 2020, global B2B eCommerce gross merchandise volumes (GMV) on marketplaces estimates at 31.19 billion U.S. dollars. Additionally, while the conversion rates of B2C online transactions are only 3% to 5%, B2B online transactions reach between 6% and 8%. These statistics show that businesses nowadays are seeking opportunities in the B2B online market.
Therefore, if you are running an eCommerce business, don’t miss those chances. In today’s article, we’ll discuss the reasons why you should start a B2B eCommerce business and suggest some tips for your eCommerce website to go wholesale.
Reasons why eCommerce businesses should sell wholesale
Selling wholesale means your eCommerce business can sell large quantities of products, leading to an increase in your total sales. In addition, a higher average order value (AOV) and volume of orders may boost your sales faster than orders with lower ones.
Reduce overhead cost
You can decrease your eCommerce costs because selling in large quantities helps minimize shipping costs, transactional costs, and more. For example, when you sell via wholesale, you could deliver your goods as one large shipment, saving more money than sending hundreds of individual packages. Moreover, only a few close relationships with wholesalers or retailers enable you to maintain your income without spending too much on marketing strategies.
Get consistent income
Wholesaling allows you to get a consistent income source. On the one hand, if you sell to a consumer, she may not come back to your website or more luckily, she will but after a long time when she wants to replace the old one. On the other hand, a wholesaler will make long-term deals with you when you build a close relationship with them.
Wholesaling provides an expanded consumer market potential. It even helps you to expand into global markets faster and easier in case you are aiming. Although your selling website can reach consumers from anywhere in the world, not all of them intend to go to your website. They may be more familiar with the merchants around them.
Increase brand awareness
When your wholesale customers distribute your products, more and more consumers can approach the items. Your brand will get visibility wherever your products are. Furthermore, if these distributors or retailers have a good reputation on the market, your reputation may improve.
Tips to start your wholesale eCommerce website
Identify your wholesale target customers
Before selling your products, you need to know to whom you are selling. Because the more you understand your customers, the higher your ability to sell is. To identify your target wholesale customers, let’s conduct market research first. Figure out exactly who your customers are selling to, how they acquire their customers, whether they are selling online or in traditional stores, and how they feature their products.
Some of your target customers could have come to your website or made a purchase. So, collect their data and segment them into different groups, then set up particular strategies to build a close relationship with them. There’s a tip for you to do the work productively, it’s using available online tools that allow you to automatically specify a wholesale group based on criteria such as industry, products, location, scale, etc.
Price your products for wholesale
How to set your wholesale product may be a question for eCommerce owners. Wholesale prices certainly should be lower than retail prices. However, they still need to cover costs such as overhead costs, labor, shipping, transaction, or material if you are a manufacturer, etc.
There is a popular rule that suggests a way to price your products. It’s called the Rule of thumb, which is to set the wholesale price around 2.5 times your production costs. Of course, this is just an additional reference point for you. To identify a suitable price, you should look at your business, the target customers, and the market.
Suggesting your wholesale customer a retail price is a good tactic. If your customers understand how much profit they can make from your products, you’ll be able to persuade them to buy your products more easily.
Manage different prices
Creating different pricing lists for customers in wholesale is very important. The prices you offer to them should be different depending on their purchasing frequencies and volumes.
However, it’s not an easy thing for eCommerce owners to manage different customer pricing. In this case, the best solution is to create a price list for each group of customers. You can easily create a price list and display products distinctively by some supporting apps. Look at Atom8 if you are holding a BigCommerce or Shopify store.
Manage your inventory
When you sell in bulk, it’s necessary to have an effective inventory management strategy to make sure you fulfill large orders and minimize costs.
There are many techniques eCommerce owners can use. Just In Time (JIT) is an inventory management method that helps you reduce costs significantly. What’s more? You can consider modern tools such as an automation inventory tracking app to manage inventory more effectively. Besides, Backorder is good preparation for your business in case you expose a stockout event, especially when you are a small eCommerce company or startup.
Expanding your eCommerce company into the B2B market is a great chance to scale up your business and make more profit. We hope that this article will help you have a clearer understanding of the benefits of B2B eCommerce and be ready to start your wholesale eCommerce website.