The retail consumer electronics market was valued at $1 trillion in the US in 2019. The estimate of the wholesale trade for the same time period was $301 billion. In addition to working with tight margins, simply managing short product lifecycles, fluctuating consumer demand, and unpredictable supply chains make every day a new challenge for B2B electronics wholesalers and distributors.
There’s irony in the need for these businesses to undergo a digital transformation in their traditional sales channel. Electronics wholesalers and distributors need to make the move to B2B eCommerce. Companies that have already made the move are seeing revenue growth 5 times that of their peers. Here’s what’s holding some companies back and how they can move forward.
Internal Forces Slow Adoption
Electronics wholesalers and distributors face several barriers to entering eCommerce. Some of them are external but many of them begin within the company itself.
Internally, management is comfortably with a distribution system that was built on relationships and an Excel spreadsheet doubling as a CRM. As new products hit this very niche market, sales hit the phones and the pavement pitching and placing orders. Marketing created email campaigns and orders came in.
Just maintaining an ERP and WMS with complex pricing and product variation is enough of a challenge. Adding eCommerce requires an investment in new technology and that technology must integrate with the existing stack. When overhead costs are rising and prices are falling (as is the norm with electronics), capital investments get deferred.
But all forces slowing adoption don’t come from within. External forces are at play as well. See, many vendor-based eCommerce platforms are just repurposed from B2C and they are incapable of handling the complexities of B2B electronics wholesaling and distribution.
Why B2C Solutions Don’t Work for B2B
One of the key reasons wholesalers of all stripes stay out of B2B eCommerce is the inability to source a solution that works. Most eCommerce solutions were built for B2C and repurposed for B2B. They just won’t work for B2B. Here why.
Everything about B2B sales is complex. An electronics B2B wholesaler can handle 500 or more brands. Those brands generate thousands and thousands of SKUs. Not every retailer is paying the same price much less buying the same product lines. One customer may be interested in only electronic toys such as drones while another only purchases home office or theater equipment.
Trying to force an eCommerce platform that was built so that every customer sees the same products at the same price just isn’t pretty.
Need for quoting
B2C eCommerce platforms aren’t built for quoting. A static website built with this type of solution may at best offer a Contact Us feature for product researchers to request pricing. This barely digitizes the process of writing an email or picking up the phone to make a call about product availability and pricing. Why bother investing in software with so little automation payoff?
Customers are companies
B2C eCommerce solutions aren’t built to recognize that the customers are companies. And each of these companies has their own internal purchasing approval limits and workflows. They also may have their own preferred eProcurement methods. To make matters even more complex, these customer companies may need orders shipped to different warehouses or stores. Most have shipping preferences when it comes to carriers. B2C solutions just aren’t a solution when the problem is customers are companies.
The standard B2C eCommerce platform provides a gateway to a payment processing vendor for processing credit and debit cards or maybe even PayPal. If only getting paid when you’re a B2B electronics wholesaler or distributor was that easy.
Those customer companies want to buy on terms, and you need to decide whether or not to extend credit. B2C eCommerce just doesn’t understand this workflow and the workarounds usually end up being offline procedures. That’s not digitizing, that’s just adding more complexity.
Picking a B2B Wholesale Electronics Platform
The B2B wholesale electronics industry needs a B2B platform built for the way they do business. It needs to be flexible, highly customizable, and able to scale infinitely. Here are some key features that must be included:
Your eCommerce platform should be able to handle an unlimited number of products. You should be able to personalize products and prices by customer. When a customer logs in, your website should provide them with a completely customized experience. This self-serve customer portal should serve up the products they purchase and the pricing structure they’ve negotiated. Cross sell and upsell promotions should be customizable as well. And for the casual browser that is not logged in, all products should display at retail or MSRP pricing to support brand integrity.
The entire reason for digitizing is to automate the routine and free sales to use their time more productively. An automated RFQ workflow is a must-have for any B2B eCommerce platform. A robust workflow engine working in concert with a powerful pricing engine allows you to completely digitize the quotation process. Requests for quotes and pricing receive faster and more accurate responses. Look for the ability to customize the quoting workflow to conform to how you do business.
User-based permissions and workflows
Speaking of workflows, remember that because your customers are companies, the online purchasing process must conform to how they do business. Look for a B2B eCommerce platform that allows users to identify permissions, approvals, and specify workflows. When you make it easier for companies to do business with you, they will.
Flexible checkout workflows
A B2B eCommerce platform should provide you ultimate control of the checkout process. Look for solutions that allow you to personalize by customer. A rich API to integrate with partners for factoring or offering terms is crucial. Make reordering easy with quick reorder forms and one-page checkout workflows. Once again, you’re evaluating the solution’s capability to adapt to how you do business with your customers.
If They Can Do It You Can Do It
Petra Industries sells over 800 brands to tens of thousands of customers. They are a leading distributor of consumer electronics.
Petra and their technology partner created a B2B eCommerce site that allows them to quickly onboard new customers and enhance their marketing efforts. The multistep customer registration process is automated and integrated with Bectran for credit authorization and receivables processing. On-boarded customers can upload CSV files, use quick order forms, or utilize the traditional shopping cart process to make a purchase.
Integration with a PIM ensures that all product information displays accurately. And because they picked a solution with a native CRM, they now have complete visibility into each customer and transaction.
So, What’s Holding You Back?
As an electronics wholesaler or distributor, what’s standing in the way of your success with B2B eCommerce? Is it internal resistance to change or the inability to find the right solution?
Identifying the barriers, whether internal or external, is the first step in creating a digital sales channel. Next research B2B eCommerce solutions, knowing B2C solutions won’t work.
The B2B wholesale electronics industry is growing. Future-proof your company with an eCommerce platform will grow with you.