The Future of Ecommerce for Distributors: Understanding the Challenges, Benefits and Requirements

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B2B ecommerce is expected to account for 17% of all B2B sales in the US by 2023, reaching $1.8 trillion. Thanks to Amazon and other successful B2B sellers, distributors are under immense pressure to transform their operations and offer B2C-like ecommerce experiences that meet customer expectations.

At the very least, buyers want to learn about your products and find answers to their questions through familiar search or social channels. In an ideal scenario, they expect to place orders online without talking to a sales rep. In fact, research shows that modern B2B buyers conduct roughly 12 online searches before making a purchase from a chosen brand.

If you don’t want to be left behind as other B2B distributors make a move toward ecommerce, this guide will help you navigate the key considerations and strategies required to grow your business.

Why Ecommerce for Distributors?

B2B commerce is going through an intense transformation. Although highly affected by the changing behaviors and expectations of the customers, the market is expected to hit $6.7 trillion in gross merchandise value by the end of 2020, making it twice the size of the B2C market. The opportunity is immense.

Interestingly, research by Merit found that 73% of B2B buyers are now Millennials. In fact, 44% of millennials are making purchasing decisions and 33% say they are key influencers or recommenders in the buying process.And a whopping 60% of millennials say they are loyal to brands that offer unique shopping experiences.

Why’s that relevant? Millennials engage in the B2B buying process with the same expectations as they have for B2C shopping. As savvy digital natives, they’re not necessarily interested in requesting demos, meetings or sales calls. They want an easy, immediate way to research, evaluate and purchase the products they want.

For distributors, setting up a strong ecommerce channel presents significant growth opportunities. With a much higher number of potential customers and a relatively simple way to draw them in, B2B distributors face a unique opportunity to expand beyond traditional sales channels. 41% of B2B buyers want businesses to provide a self-service experience online, distributors might even save on operating costs.

Common Challenges Faced by Distributors

Despite the overwhelming evidence that supports the wholesale shift to online, some distributors have failed to respond to customers’ demand for digital shopping experiences. What are the roadblocks holding them back?

1. B2B Business Complexities.

B2B businesses think ecommerce is not an option for them due to the sheer complexity of the buying process and a diverse customer base. The most commonly cited concerns include:

  • Contract pricing
  • Customers with special terms and agreements
  • Exclusive products
  • Varying payment and shipping options

While these are compelling considerations to discuss with your ecommerce technology vendor, they are not blockers of your business transformation. With the right ecommerce solution, you can easily jump over these hurdles.

Berlin Packaging Distributor Ecommerce

Berlin Packaging is a great example of how distributors can overcome common B2B ecommerce challenges. This family-run operation that has evolved into a modern glass and plastic container store now leverages the BigCommerce platform to fulfill B2B orders for a wide variety of businesses.

As a fairly complex B2B business, Berlin Packaging needed things like:

  • Specialized item attributes
  • Custom inputs
  • An interface with their existing ERP
  • Custom shipping and handling abilities for their customers that would improve the overall user experience and streamline processes for them, too.

According to Berlin Packaging, they have more than 200 different partner vendor locations and dropshipping to coordinate, so this was no easy task. To make everything work together, Berlin Packaging relied on BigCommerce Agency Partner Americaneagle.com to create unique system integrations via APIs.

And since switching to BigCommerce, Berlin Packaging has seen a substantial lift in conversions, an increase in orders and demand revenue.

2. Team skills and culture.

Launching an ecommerce channel may seem like a daunting task — and one that will require more resources. If everyone on your team is struggling to keep up with their existing responsibilities, who’s going to handle the new ecommerce initiative? Will your team have the skills required to take this project off the ground? How much time will they need to invest in it?

On top of that, you have the whole ‘resistance to change’ problem at hand. Sales reps may feel threatened by a new self-service buying experience. IT is worried the new site will create more workload and disrupt the buying process. And what if it goes down or gets hacked? Yet others may struggle to see the potential ROI.

Managing change and driving the mindset shift will require commitment from the entire leadership team. But if you’re thinking about the long-term success of your business, it’s a risk worth taking.

3. B2B purchasing.

While B2B buyers have consumerized expectations, they don’t buy exactly like B2C buyers. 

”In B2B sales, payments are not as simple as punching in a credit card number or logging into a PayPal account. If I were a B2B Buyer, I’m not going to put a forty thousand dollar order on a credit card. Instead, ACH, or “echeck”, payments are more prevalent.”

 Chelsea Ciardelli, Senior Strategic Business Development Manager at BigCommerce

Some of the technical requirements B2B sellers must accommodate include:

  • Requiring a punchout solution that integrates with the buyer's own procurement application or ERP system
  • Requests to pay via purchase orders
  • Internal manager approvals to place orders with you

Can an ecommerce platform handle all of these purchasing scenarios? The short answer is yes. The long answer is — it depends on the platform and the library of integrations it provides. The BigCommerce platform, for example, makes it easy for hybrid businesses with both B2B and B2C customers to offer different price lists or catalogues to different customer groups.

Advantages of Adopting Ecommerce for Distributors

The potential gain of a strong ecommerce channel more than outweighs the challenges outlined above. Adopting ecommerce for distributors and wholesalers can take the business to the next level.

1. Room for growth and scalability.

In the past, distributors relied on trade shows, ads in trade publications, and salespeople on the ground visiting customers in person. The introduction of ecommerce opened the door to global reach in a matter of a few clicks, making upscaling easier than ever before. 

“It's been a big shift from a company where it was really only done through outside sales, and now bringing the sales in through the website as well through the ecommerce channel. Our goal with our ecommerce experience is to have a seamless user experience from browsing to purchasing, to shipping. The trend that's happening right now is B2B is moving more towards B2C.”

— Rebecca Gummerson, Berlin Packaging

The customisable and flexible nature of ecommerce platforms makes it easy for distributors to tap into new markets. Simply by adding product descriptions in relevant languages or categorizing products by cultural preferences, distributors become globally accessible and relevant. Making it possible for distributors to target markets that were otherwise out of reach, often in the furthest corners of the world, without a huge upfront investment or risk.

2. Endless innovation.

Even if the business is running smoothly and you are not invested in chasing every new trend, adding digital tools to your offering is essential. As people spend more and more time online, businesses will have to consider adding an ecommerce channel if they want to stay relevant.

Buying habits are changing, in fact, More than 70 percent of B2B buyers fully define their needs before engaging with a sales representative, and almost half identify specific solutions before reaching out. Meaning that just under half of all sales happen as a result of the sales team. Most customers consult the world wide web before making a purchase decision, not the sales rep. Adding an ecommerce channel will help you keep up with the changing buying habits and stay front of mind in moments that matter.

3. Improved efficiencies.

It may seem like the ecommerce platform is an additional responsibility that’ll strain your resources and cost you more to run. In reality, it’ll actually help you streamline and reduce the cost of operations through automation. 

Once your ecommerce platform is up and running, you can employ digital tools for analytics, inventory tracking and others to make better-informed decisions throughout your own supply chain. And as your operations become more efficient, your customer’s experience is enhanced, building brand love and long-term sales. In other words, as you work less, you gain more, thanks to digital tools. BigCommerce merchants would agree, as the platform comes with built-in Ecommerce Analytics and Insights reports.

6 Requirements Needed for Distributor Ecommerce

Wholesalers and distributors are experiencing intense disruption. As consumer behavior and expectations shift, B2B ecommerce leaders must rethink their approach to selling online and focus on creating tailored digital experiences that will set them up for long-term success.

1. Advanced search capabilities.

Distributors tend to have tens of thousands of SKUs, making product discovery a modern-day product searchability challenge. And with 43% of online shoppers expecting an intuitive, effective search function on any ecommerce site, distributors have no other choice but to make that happen. The success of their ecommerce strategy depends entirely on the user experience. 

Equipping users with advanced search functionality, such as faceted search, will lead to happier, more engaged buyers and, ultimately, higher sales. When you think about the requirements for a distributor ecommerce platform, make sure search functionality is at the top of your list.

“Shoppers using search are your highest intent buyers. They know exactly what they are looking for, and it’s important that they find just that. So using an NLP based, or natural language processing based search technology, will ensure relevant search results — no matter the complexity of the query.”

 Ford Crane, Strategic Partnerships Manager at Klevu

2. Customer-level pricing.

When it comes to pricing, distributors have a lot to consider and anticipate. The pricing models can get complex when you need to tailor pricing down to a customer level. Taking into account that some products will be available in certain markets only or to some customers only and that shipping costs and options will vary based on location, distributors need an ecommerce solution that supports their digital commerce strategy.

The right technology should allow you to update and tailor pricing down to customer level based on their contract or purchase history. Watch the clip below to learn how Toolstop uses BigCommerce's platform to offer segment pricing for different customer groups.

 

3. Content-tech specs and resources.

To compete with Amazon, B2B distributors will need more than the shopping cart functionality. The only way to build customer loyalty is to provide user-centered experiences that add value throughout the buying cycle. 

Besides technical product information and spec sheets, your buyers may want other helpful content resources that enable them to evaluate the product and better understand how to use it after the purchase. Not to mention the SEO benefits that assist customers in finding your site in the first place.

To keep all your product communications relevant and up-to-date, you’ll need a simple way to modify, replace and share the content through the platform. Choosing an easy-to-use ecommerce solution will help you streamline your online sales and create compelling user experiences.

4. Personalized product recommendations.

According to research, 50% of B2B buyers identify improved personalization as a key factor when searching for online suppliers with whom to build business relationships. Even more importantly, 48% of consumers spend more when they receive personalized experiences. Implementing product recommendations is a great way to make purchasing easy for buyers while driving cross-sell and upsell opportunities. As customers switch from buying offline to online, cross-promotion often leads to buyers becoming aware of products they didn’t even know the distributor offered.

When built with the right technology, ecommerce sites can offer highly personalized experiences, including:

  • Product page optimization with related products
  • Homepage optimization with personalized featured products
  • Shopping cart optimization with similar products to consider

Ultimately, using customer data – such as geo-location or demographic – to provide product recommendations leads to a significant increase in conversions and a decrease in cart abandonment.

5. Account-level controls.

Another important requirement for your B2B ecommerce platform is access to account-level controls. When selling into a business, you’ll likely need to juggle multiple stakeholders, different departments and even different locations. This means having multiple people from the same organisation logging in to see order history or track down other information. 

“Account to contact relationships, or this concept of customer account management, is an area that’s very much growing in terms of consumer demands and the demands of buyers to have this type of structure, especially if you are selling into large corporations or government organisations.”

 Alec Berkley, Director, Business Development at BundleB2B

Additionally, different purchasing needs often dictate different types of purchasing scenarios. Some of your clients may insist on purchasing via 30-day invoices with a sizable credit limit, while others may have to place orders via card payments. A suitable B2B ecommerce solution will enable you to accommodate different payment terms and support account-level controls for the best user experience.

6. A foundation for innovation.

Many distributors know the pains of being on a legacy system. With the weight and additional costs of maintaining the outdated platform, it becomes more and more difficult to innovate, deploy new features and keep up with customer expectations. In the meantime, research shows that B2B buyers are getting pickier: 45% want personalized portal content, 44% are looking for an easy-to-use ROI calculator, 38% seek AR options and 33% want video chat options.

When choosing an ecommerce platform, think beyond your immediate needs. It’s no longer enough to sell products online. Wholesalers and distributors must think about how to create digital experiences that meet customer needs and keep them coming back. Finding the right ecommerce software is a critical step towards laying the right foundation for future growth.

“A really great way to exceed expectations and make your B2B differentiated is to take the learnings of B2C and bring them into your site. There’s a few things you can do, but the most important thing, and the thing that I think is really cool, is showing an estimated delivery date.”

 Quentin Montalto, Chief Operating Officer of ShipperHQ

Steps for Distributors Building an Ecommerce Site

So now that you’re all up to date with how ecommerce can boost your distribution business, let’s see how to set it all up for success. Watch as Salsify’s Head of Product Partnerships Ken Cowan explains how you can approach taking your B2B business online.

 

1. Develop your project requirements.

To make sure your project is a success, you first need to identify your target audience. Are you building an ecommerce channel for your existing, new or both customers? Don’t forget to leave time and space to craft different messaging for each audience you want to reach.

Once you identify who you are talking to, then you can dive deeper into:

Learning from competitors

Take a look at your competitors. What do they sell? How do they sell it? How do they advertise online? Search for your products on Amazon and check out the competition on Amazon Business. Consider how your product compares to others online, and determine your added value proposition that’ll help you stand out from the crowd.

Picking your bestsellers

Uploading your entire catalogue online at once may lead to many complications, especially if you don’t have your ecommerce site set up properly yet. So it’s better to start with a few products you can learn from, and expand over time. Consider starting with products with a high margin that’ll make the sales team's life easier.

Structuring your catalogue

Even before you upload all your products, you need to decide how you’ll structure it to make it easier for customers to browse and find items online. You may choose to narrow the products by size, width, color, brand, shape, price, etc.

Accounting for taxes

You need to develop a sales tax strategy that’ll grow with your ecommerce business. For peace of mind, use services like TaxJar or Avalara, to calculate taxes in real-time at checkout.

Planning for fulfillment

To speed up fulfillment, consider integrating your ecommerce platform with an ERP. It’s the lifeblood of any large cooperation, and when integrated successfully can bring many financial and other benefits.

Considering your payment options

Look for a platform that will support multiple payment gateway options for a smoother user experience. For example, BigCommerce, integrates natively with more than 55 global payment gateway options.

Keep all of these in mind when writing your RFP for technology vendors. It’s the only way to make sure you get as much help, tools and features with your chosen technology partner as you need to get your ecommerce channel off the ground successfully.

2. Identify potential obstacles.

Like with any change, there will be some growing pains to overcome at the beginning. Every business runs differently, and there is no one-size-fits-all ecommerce solution. But there are a few things you can prepare for in advance, that’ll make the transition easier.

  • Account creation: Make sure your team is equipped to deal with scenarios where internal review processes prevent customers from completing orders automatically. 
  • Shipping costs: Sometimes shipping costs are calculated after the order is placed, meaning customers don’t know the order total as they go through checkout.
  • Regulations: There are government industry regulations that may affect how your products are purchased or shipped. List any issues in your requirements, because those should be addressed during the implementation process of your site.

3. Develop goals for your ecommerce site.

Give your site a purpose. Consider how your new ecommerce platform will make your customers’ and sales team’s lives better. Think about what you want to achieve and create tangible targets to measure success.

  • Start with a revenue target for the first year. Clear ROI goals will help you measure the success of your ecommerce channel.
  • Think about your speed of fulfillment. Are you meeting your customers’ expectations and is there any room for improvement?
  • Small orders can take up a lot of time. Your ecommerce channel should streamline those processes, helping you save time and improve the efficiency of your sales teams.

Your goals will be determined by the size of your company and revenue, as well as your commitment to establishing your ecommerce channel.

4. Build your ecommerce team.

You’ll need people on your team that have launched an ecommerce site in the past. Their experience will help you navigate the launch with confidence. You may already have people on your team with experience or you can outsource these roles to your agency partner

Keith Karlick, Principal at Mercutio, a BigCommerce design agency partner advises, "Agencies are well positioned to help brands move quickly through a team approach. Where a company may have the ability to hire a single person with a specific skill set to manage an entire ecommerce business, an agency can bring an entire team with a diverse set of roles and expertise to holistically support the ecommerce business for a similar budget.”

However, if you decide to take on the project in-house, at a minimum, you’ll need a project manager, a developer and a digital marketer, to ensure you’re ready to take on the ecommerce challenge. For best results you’ll need:

Content creator – Content strategy and content creation work hand in hand. You’ll need someone proficient in both.

Designer – With experience in creating wireframes and mockups for both mobile and desktop sites. If you want to save time and money, you could leverage pre-built website themes and templates. But make sure your B2B ecommerce site is optimised for mobile, is easy-to-use and loads fast.

ERP Expert – you’ll need someone on your team to handle the ERP/fulfillment system and ensure it connects with the necessary enterprise systems for smooth data orchestration.

Project Manager – setting up an ecommerce channel will require great project and time management skills. A project manager can help you meet all project requirements in time and within budget.

Digital Marketer – a knowledgeable digital marketer will be a true asset in your ecommerce project. From SEO to paid search to email marketing, there will be a lot of ground to cover and set up your ecommerce site for success in the long-run.

Front-end Developer – skilled in HTML/CSS and Javascript, your front-end developer will be responsible for creating a smooth user experience and aesthetically pleasing store UI designs.

Back-end Developer – working on the backend functionality, this person will look after all system integrations, API calls and other non-user-facing site capabilities.

5. Select your ecommerce technology.

Picking the right ecommerce platform is a critical step in the journey – make sure you leave yourself enough time to investigate the available options and consider what’s important to your business.

  • Examine the costs: How much will it cost to get the site up and running? Are there any pre-built functionalities or integrations that might save you money?
  • Maintenance: How easy or difficult will it be for you to maintain your ecommerce website? Will you need to manage security, patches and other updates yourself?
  • Hosting: is it a hosted or a self-hosted solution?
  • CMS: Does it include or integrate with a content management system?
  • B2B: Does it come with the B2B features you need?
  • Futureproof: Will the platform keep up with marketplace updates, changes and trends?

There are many aspects to consider when it comes to a B2B ecommerce platform. Take the time to educate yourself on the best fit for your business.

When Atlanta Light Bulbs CEO Doug Root decided the company needed an ecommerce platform that would deliver the customer experience millennial B2B buyers expect, he turned to BigCommerce. Because their business is selling lights, not developing software, Root knew that he wanted a platform that was easy to use, but also allow the company to innovate.

“BigCommerce is affordable and easy to navigate. It has training wheels for us non-technical guys. We were able to launch the site out of the box, quickly customise it to make it our own and begin selling products near immediately.”

 Doug Root, CEO at Atlanta Light Bulbs

Alb Distributors

Preparing Your Site to Serve Your Ecommerce Customers

Launching into the ecommerce space means adhering to the industry standards and expectations. It’s not about selling online, but about helping buyers purchase your products in the most efficient, enjoyable way possible.

1. Train your internal team on using your website.

Don’t launch your ecommerce site to customers until your sales reps know it in and out. Training the team in advance will give you enough time to test various purchasing scenarios, catch any remaining bugs and prepare the sales team for a different kind of sale. They should be able to answer customers’ questions and guide them through the self-service buying process, if needed.

2. Plan communication to your existing customer base to introduce them to your new site.

While the primary goal of your new ecommerce initiative is to attract new customers, you don’t want to ignore the existing client base. Get ready to communicate about the launch via your usual channels, such as email or social media. To help with the onboarding, you may want to think about creating educational content like videos, webinars or how-to guides to explain the new processes and opportunities that lie ahead.

3. Make sure your customer service team checks emails frequently.

Timely customer service is one of the most important aspects of an ecommerce business. If you’re just getting started, customers are bound to have questions and concerns. Promptly following up on customer inquiries will boost your brand’s trustworthiness and encourage customers to shift to online processes. BigCommerce prioritizes merchant support to build relationships on trust through fast customer support response rates – merchants get connected to a US-based support rep in under two minutes.

4. Consider setting up live chat on your ecommerce site.

On-demand chatbots have changed the game in ecommerce. Instead of having to arrange a call and wait for an answer, consumers can now ask quick questions and get immediate answers right where they need them. Customers have more freedom to share feedback and voice their concerns, making communication easier and more effective. To really understand your customers’ pain points, look at your site’s search statistics to pinpoint what they’re searching for and not finding. You can also review and consider obvious friction points that prevent users from completing their buying journey or causing frustrations that delay the purchase.

Wrapping Up

The growth of the B2B commerce market does not show any signs of slowing down. For wholesalers and distributors, it provides a unique opportunity to capitalize on a new, effective sales channel to acquire customers and provide value-added service to their current client base.

The risk of not meeting the changing buyer expectations and being left behind is much greater than venturing out into a new field. If you’re thinking about the long-term growth of your distribution business, adding an ecommerce solution to the mix is definitely something to consider.

FAQs

What is a distributor?

In the supply chain, the distributor is the middle party between a manufacturer and a prospective customer for certain products. Distributors often maintain exclusive agreements with manufacturers that allow them to cover certain territories. Distributors rarely sell products directly to consumers due to the large quantities of products they have on hand.

Why should a distributor try ecommerce?

Wholesalers buy large quantities of products from distributors. Sometimes, they can be unaware of other lines of merchandise the distributor carries. Setting up an ecommerce channel helps distributors better communicate about the products they have as well as streamline their sales process and find new buyers.

Are there reasons why distributors shouldn’t have an ecommerce site?

Distributors might have many objections, but there are generally no hard reasons why they shouldn’t have an ecommerce site. While it is an investment that requires time, money and effort, there are strong reasons to embrace ecommerce and multichannel sales.

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How do you build an ecommerce site for a distributor?

Building an ecommerce site for a distributor requires a similar approach to research, requirement planning and project scoping as building a B2C ecommerce store. The most important thing is to focus on the unique needs of your B2B business.

Which ecommerce platforms are best for distributors?

Selling into a business is a layered, complex process. When choosing the right platform for a distributor ecommerce site, you have to consider customer expectations, key B2B sales functionalities and your organisation’s priorities to pick the right technology.

What features should a distributor look for in an ecommerce site?

The most important features for a B2B ecommerce site include integrations and offline order history, marketing automation, permissions management and authorisation, customer-level pricing, payment options, faceted search and multi-currency support.

What key integrations do distributors need in ecommerce?

To achieve success in their B2B ecommerce strategy, distributors will need to integrate with Enterprise Resource Planning & Back Office systems, Point of Sale (POS) software and multiple B2B payment solutions.

What is the difference between a distributor and a wholesaler?

A distributor buys products from a manufacturer and resells them to a wholesaler. A distributor often carries a certain type of products only, while wholesalers tend to acquire all types of merchandise, ranging from bicycles to food.

Is distributor ecommerce expanding globally?

Yes. As customers continue to make purchases globally, distributors are paying more and more attention to their omnichannel sales strategy. With cross-border payment technologies and integrated cross-channel marketing tactics, international expansion is not news for the rising breed of digitally-savvy distributors.

How does BigCommerce support distributors with ecommerce?

The BigCommerce platform offers a range of features to create a modern B2B buying experience. From sleek site designs for large product catalogues to customer and pricing segmentation down to the SKU level. The platform also supports punch out, purchase orders and net payment terms as well as integrations with major ERPs, OMS and CRM systems.

What are the key benefits of B2B ecommerce for distributors?

Digital-savvy B2B buyers want the convenience, speed, personalization and accuracy that ecommerce stores offer. Distributors can meet all of those expectations, tap into new sales revenue, automate key processes and compete with Amazon Business when they add the ecommerce channel to their business strategy.

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