The 9 Questions You Need To Answer When Starting a B2B Store

[JasonH]

Starting a B2B store is a big undertaking that requires careful planning and execution. We spoke with @BSS-Commerce  and dived into the top 9 questions people ask to set your B2B store up for success!

1. What are the key differences between running a B2B store and a B2C store? 

Target markets are the key differences. B2B markets and sells to other businesses through internal decision-makers or purchasing teams, whereas B2C sells to individual consumers.

Target Audience

• B2B stores target other businesses, organizations, or institutions. These buyers are looking for products or services that can help them operate more efficiently or serve their own customers better. However, these buyers are not necessarily B2B end users and they could be intermediary buyers.
• B2C stores target individual consumers. These customers are looking for products or services for personal use, often driven by personal preferences, needs, and desires.

Customer Base

B2B Stores Customer Base

• Size: Typically fewer but larger customers compared to B2C.
• Decision-Making Process: More complex, involving multiple stakeholders.
• Purchase Value: Often higher transaction values.
• Relationship Building: Crucial for long-term partnerships.

Examples of B2B Customers:

• Manufacturers
• Wholesalers
• Retailers
• Government agencies
• Schools
• Hospitals   

 B2C Stores Customer Base

• Size: Generally larger customer base.
• Decision-Making Process: Often individual or small family decisions.
• Purchase Value: Smaller average transaction values.   
• Customer Acquisition: Focus on reaching a wide audience.

Examples of B2C Customers:

• Individuals
• Families
• Students
• Retirees

Relationship Management

• B2B: B2B businesses invest in building strong, long-term relationships with their clients. This often involves personalized service, dedicated account managers, and regular communication.
• B2C: Relationship management focuses on customer satisfaction and loyalty. While personalized service is important, the emphasis is on creating a positive overall experience through marketing, customer service, and loyalty programs.

Payment Terms

• B2B: Payment terms are often more flexible and varied. Common terms include net 30, net 60, or net 90 days, allowing businesses to pay invoices within a specified period. Other terms like advance payments or installment plans may also be used.
• B2C: Payment terms are usually straightforward and immediate. Consumers typically pay at the point of sale using methods like credit cards, debit cards, or digital wallets. Payment plans or financing options may be available for higher-value purchases.

 

2. What is the specific problem your B2B products solve? Who are your target customers?

Identifying the solution provided by your products and your target customer is key to success in starting a B2B store. You must first identify a specific pain point or problem in a particular industry. You then design or source a product or a line of products to solve that problem for businesses in that field. 

List of questions to help identify a problem:

• What industry or industries are you targeting?
• What are the key trends in the industry?
• What are the major players and their business models in this industry?
• What are the most frequent complaints from customers?
• What are the most common challenges faced by companies in this industry?
• Who is affected by this problem?
• What are the current solutions to this problem?
• What are the key features that a new solution should have?
• How can technology or AI be leveraged to solve this problem?
• How does your product or service offer a unique solution?
• What is the go-to-market strategy?
• How will you measure the success of the product or service?

For example, if you’re targeting marketing departments, you might solve the problem of ineffective lead management. Defining your ideal customer or creating a buyer persona will help you tailor your offer and messaging.

How to identify B2B target audiences: 

• What’s their industry?
• What is their role within the company?
• What level of seniority do they hold?
• What is the company's purchasing process?
• Where is their location?
• Which social media platforms do they utilize?
• What are their main challenges?
• What type of online content do they engage with?
• Which influential figures do they follow?
• What kind of companies do they work for?

BSS: B2B Business Example: BSS B2B Wholesale Solution App 

B2B Wholesale Solution app provides a seamless shopping experience for a B2B store, allowing all merchants (both Shopify plus and non-plus merchants) to manage and extract important data from their wholesale customers. One of the key features is the ability to provide personalized pricing for intended products. This level of customization helps to build long term and strong relationships with wholesale customers.

Problems Solved:

• Custom Pricing: Managing different prices for wholesale orders and individual customers can be a time-consuming and error-prone process. BSS Commerce does the work for you and saves you time and resources.
• Price List Management: Creating and managing multiple price lists can be a hassle. BSS Commerce lets you manage different price lists for different customer segments.
• Lock/Hide Functionality: BSS Commerce allows Shopify B2B store owners to control product visibility for specific customers. Perfect for new product launches or restricting access to certain products.
• Customer Portal: BSS Commerce app gives Shopify B2B store owners a dedicated portal to manage their customers, view purchase history and communicate with them.

3. How do you manage pricing structures in a B2B setting?

Main factors that influence pricing strategies for running a B2B store are as listed below: 

Production Costs

• Direct Impact on Pricing: The total cost of producing a product, including raw materials, labor, and manufacturing expenses, sets the baseline for pricing. To ensure profitability, businesses must price their products above these costs. If production costs increase, prices may need to be adjusted accordingly.
• Cost Efficiency: Efficient production processes and economies of scale can lower production costs, allowing businesses to offer competitive prices while maintaining healthy profit margins.

 

Competitor Pricing

• Market Positioning: Understanding how competitors price their products helps businesses position their own offerings. If competitors offer similar products at lower prices, a business might need to adjust its pricing strategy to stay competitive or emphasize unique features that justify a higher price.
• Price Adjustments: Regularly monitoring competitor prices allows businesses to make timely adjustments to their pricing strategies, ensuring they remain attractive to customers and protect their market share.

 

Perceived Value

• Customer Willingness to Pay: The perceived value of a product or service influences how much customers are willing to pay. Products perceived as high-quality, innovative, or offering unique benefits can command higher prices.
• Value-Based Pricing: Setting prices based on the perceived value rather than just the cost can lead to higher profitability. This approach requires a deep understanding of customer needs and the ability to communicate the unique benefits and value of the product effectively.

 

Negotiation

• Custom Pricing: In B2B settings, prices are often negotiable based on factors such as order volume, contract length and customer relationship. Custom pricing allows businesses to tailor their offers to meet the specific needs and budgets of different clients.
• Discounts and Incentives: Offering discounts for bulk purchases, early payments, or long-term contracts can be effective negotiation tools. These incentives can help secure larger orders and foster long-term relationships.
• Flexible Terms: Negotiating favorable terms, such as extended payment periods or flexible delivery schedules, can make pricing more attractive to clients without necessarily lowering the base price.

Here are some of our suggestions for setting up your product prices:

• Flexible pricing: Use variable pricing models based on order volume, customer segment and negotiated terms. This gives you flexibility and caters to different customer needs.
• Visibility control: Control price visibility by hiding or locking prices for specific users or customer groups. This keeps it exclusive and protects margins.

4. How do you handle bulk orders effectively?

Efficiently handling bulk orders and call-offs is essential for maintaining project timelines and impacting your profitability and customer satisfaction. Well-managed contracts guarantee:

• Price consistency: Customers can trust that the agreed-upon pricing will remain steady throughout the project.
• On-time delivery: Adhering to call-off schedules is vital for project effectiveness and achieving sales targets.
• Supplier control: Suppliers must closely monitor their commitments, identify deficiencies, and prevent oversupply to prevent billing and payment complications.

Effectively managing these elements improves the potential for future contract opportunities and reinforces business partnerships. In addition, you can consider another option to handle bulk orders effectively, such as BSS Commerce's Customer Portal App.

BSS: B2B Portal, Quote, Net 30 is a B2B business example to handle bulk orders efficiently for a B2B store. No matter if you are Shopify plus or non-plus merchants, you can use this application. B2B Portal, Quote, Net 30 App aids in streamlining the process for both you and your customers:

Key features of BSS: B2B Portal, Quote, Net 30 App to handle bulk orders effectively:

Simplify B2B purchasing through Net Terms, Quick Orders, and Re-ordering options

• Enable B2B stores to make delayed payments within a specified period.
• Administer purchases with choices for NET 7, 15, 30, 60, and 90-day terms.
• Improve the checkout process by incorporating a personalized Thank You page and automatically tagging orders.
• Offer a comprehensive Shipping and Tax page for all customers

5. How do you manage customer accounts?

Good customer account management usually works with flexible payment options hand in hand. 

• Customer Management: You understand your customers needs, preferences and buying behavior, leading to better service, personalization and long term loyalty.
• Flexible Payment Options: Offering multiple payment methods can cater for customer preferences and financial situations, improving cash flow and reduce payment delays.

Put your customer accounts to work! Track their purchase history and offer custom pricing, discounts, and manage orders. On the flip side, customer accounts provide a hub where customers can manage their shipping and payment information.

• Guest Accounts: Customers can buy without creating a full account. Good for one off buyers but with limited personalization and features.
• Registered Accounts: Personalization, access to order history, custom pricing and more. Good for repeat customers and loyalty programs.

Here's a list of features to consider:

• Order History and Tracking: View previous orders and track current shipments.
• Custom Pricing and Discounts: Offer custom pricing and discounts based on customer profiles and purchase volumes.
• Saved Payment Info: Save payment details.
• Account Management: Manage profiles, addresses and preferences.

6. What payment terms and methods are commonly used in B2B transactions?

In the world of B2B, common payment terms often involve net terms, specifying the number of days a buyer has to pay after receiving an invoice. For instance, net 30 means payment is due within 30 days. 

Common B2B Payment Terms

• Net 30/60/90: Managing orders is easier with BSS: B2B Portal App to select from NET 7, 15, 30, 60, and 90-day terms.
• 2/10 Net 30: Offers a 2% discount if payment is made within 10 days; otherwise, the full amount is due in 30 days.
• End of Month (EOM): Payment is due at the end of the month in which the invoice is received.
• Cash on Delivery (COD): Payment is made at the time of delivery.
• Advance Payment: Payment is made before the goods or services are delivered.

 

Common B2B Payment Methods

• Electronic Funds Transfer (EFT)/Automated Clearing House (ACH): These digital methods are popular for their efficiency and lower processing fees.
• Credit Cards: Widely used for their convenience and the ability to set up scheduled payments.
• Checks: Still commonly used, especially in the US, though they involve more manual processing.
• Wire Transfers: Suitable for large, international transactions due to their speed and security.
• Cash: Less common due to security concerns and lack of automation
• Virtual Cards: Virtual cards offer a secure payment method for B2B transactions. These disposable cards have unique numbers for each purchase, preventing fraud.

 

7. What are the best practices for managing inventory and supply chain?

Striking the right balance between meeting customer demand, minimizing costs, and mitigating risks is a complex yet rewarding challenge. Consider inventory management and supply chain optimization.

Inventory Management

Here are some best practices for inventory management, including tools for real-time inventory tracking and demand forecasting:

Reorder Alerts: Reorder alerts also known as low inventory alerts appear in your inventory management tool to let you know when to restock an item. These alerts are triggered when the stock level of an item reaches a preset reorder point. The inventory management tool can monitor the quantity of each item across multiple locations (warehouses) and tell you when the total stock level is low.

Reports: The report function in an inventory management tool allows you to generate reports. This involves extracting data and information from the system’s database to create reports that contain all the details. Types of reports you can generate:

• Inventory reports
• Sales reports
• Purchasing reports

Dashboards: A dashboard in an inventory management tool is a visual interface that displays information. Users can access data and information from the system’s database through the dashboard.

Barcoding and Mobile Systems: Barcoding and mobile systems are hardware and software components that allow you to assign, scan and manage barcodes in your business. The hardware is the devices (barcode scanners and label printers) and the software is the barcoding process and inventory data.

System Integrations: An inventory management tool system has the capability to integrate with other business management applications, including accounting software, eCommerce platforms, and Electronic Data Interchange (EDI) systems, among others.

Almost all inventory management tools are reasonably priced and cost-efficient, enabling small to midsize businesses to take advantage of their capabilities.

Supply Chain Optimization

A well run supply chain is critical to delivering products on time and at the right cost.

• Supplier Relationship Management: Get product and best price from suppliers.
• Risk Management: Identify supply chain risks (e.g. natural disasters, economic downturns).
• Transportation Optimization: Choose the right transportation and carriers to reduce cost and delivery time.
• Lead Time Management: Work with suppliers to reduce lead times and improve fill rates.
• Supply Chain Visibility: Use technology to track products and get real time visibility into the supply chain.
• Performance Metrics: Set KPIs to measure supply chain performance and find areas to improve.
• Continuous Improvement: Review supply chain performance and implement process changes to drive efficiency and cost savings.

8. How do you support international B2B sales for startups?

Expanding into international markets presents both opportunities and challenges for startups. Consider the following factors to ensure that both your large shipments and small packages reach their destination. 

Customs and duties

International shipment requires complying with customs regulations, meaning paperwork to declare what you are shipping to both the sending and receiving countries. Be aware of the duties that taxes and fees that will apply based on the value and destination of the products. Research the customs fees for the countries you are shipping to so you can map out the cost.

Shipping costs and transit times

Try working with different shipping carriers and packaging to find out the best use of your money and time. When shipping internationally, customs inspections can take longer, especially depending on the value of the shipment.

Regulations and restrictions

Every country has its own rules and regulations on how products are packaged and labeled. This includes language, product information, safety warnings, ingredient listing and national standards.

B2B owners need to do their due diligence on the regulatory environment of each target market. Working with local advisors can guide you through the packaging and labeling requirements of each country.

9. What are ERP and CRM systems, and do I need one for my B2B store?

Enterprise Resource Planning systems (ERP) which all-in-one software platforms that manage and integrate all the core business processes of an organization. These processes include inventory management, procurement, supply chain, financials, HR, and more. By centralizing data and automating routine tasks, ERP systems help B2B stores streamline, reduce errors, and improve overall efficiency.

Customer Relationship Management systems (CRM) manage a company’s interactions with current and potential customers. B2B stores use CRM to track customer data, manage sales pipelines and customer service. CRM is key to understanding customer needs, improving customer satisfaction and driving sales growth.

Factors to Consider When Choosing ERP and CRM Systems

• Business Size and Industry: Is it sized for your business and industry?
• Scalability: Can it grow with your business?
• Integration: Does it integrate with other business apps (eCommerce platforms, accounting software)?
• Cost: What’s the total cost of ownership (licensing, implementation, maintenance)?
• Data Security: How will you protect customer and business data?
• User Experience: Is it user friendly for all employees?
• Vendor Reputation and Support: Who are you buying from?
• Implementation and Training: How long and complex is the implementation and what training resources are available?

The Final Verdict: Should I consider implementing CRM, ERP, or both for B2B stores?

Most growing companies, regardless of size, will eventually require both an ERP and a CRM system, or a unified platform that combines both functionalities. Companies using basic spreadsheets often transition to an ERP system when they realize the limitations of their current systems are hindering their growth or efficiency.

Similarly, a B2B store managing customer relationships through individual sales reps emailing clients, spreadsheets, or contact management systems will need to invest in a CRM system. Hence, the decision to do CRM or ERP first depends on your business model.

 

Wrapping up

We hope you now feel empowered and confident in planning your B2B wholesale offerings. Share your thoughts in the comments. 

Like what you're reading? Subscribe to our Blog board to get notification for new topics.

Feel like chatting with @BSS-Commerce? Reach out here.