B2B eCommerce: Fighting channel conflict

Across all different industries, B2B companies are expanding their eCommerce abilities and creating new direct-to-consumer business models to enhance the experience of their end customers. As companies look to create these systems, though, they must ensure all stakeholders and actors within and outside the company are addressed when creating the requirements of the new eCommerce system.

For a manufacturing or industrial company to achieve profitability, it has to achieve large, volume-based sales to justify its R&D costs and take advantage of economies of scale. To accomplish this goal in the pre-internet world, companies would build-out a distribution network that would quickly allow the company to reach a much broader marker of customers in a cost-effective manner without the upfront costs of hiring and training a full sales staff.

While distributors or resellers are considered “middle-men” by many, they provide many value-added services, such as purchasing-in-bulk, sales and marketing support, customer service and support, and even product delivery and order fulfillment.   Depending on the agreements between a distributor and a company, the distributor will manage, create, and view customer quotes or orders and might require specific visibility and notifications of activities in the system.

In launching these new business systems or models, it is important that companies ensure that they don’t alienate existing third-parties such as distributors or resellers. Making the transition to an eCommerce portal will be a long journey for customers to learn and adopt to a new sales process, and by engaging with existing vested partners such as distributors and resellers, companies can set themselves up for success. Engaging partners earlier in the process, developing specific requirements for distributor roles, and explaining how the new online systems can reduce costs and increase revenue for distributors helps to align parties around a common goal of success for the new eCommerce system.

While distributors and resellers play a role in account and order management, their most valuable characteristic is helping drive revenue for the company. If your distributors or resellers don’t have adequate information or knowledge about the new eCommerce sales channel, then the result could be lost revenue.

While designing your eCommerce system around the needs of multiple actors not only is the system being designed for success, but by including distributor or resellers in the requirement process it can reduce the risk of alienating a key set of users of a system. Similar to how a business will devise a communication and organizational plan to inform customers or internal employees of new platforms, companies need to develop similar action and communication plans for distributors and other external users.

Important questions and answers to consider when building B2B eCommerce systems

• What type of third-party users will be using the eCommerce Portal?
  • Distributor or reseller users would need access to create and assign quotes to end customers as part of the sales process.
  • Companies might also have specific users from a partner network that are involved in the management and implementation of a contract.
  • These distributor and partner types of users would need to have different administration views, contract visibility, and overall functionality in the eCommerce system.
• What are the key actions or responsibilities that distributors or other third parties have in the sales process?
  • Generating quotes, setting-up or requesting temporary/demo product for the customer.
• Does the pricing differ between distributors and customers? What type of discounts should each group view?
  • Because of existing agreements, distributors will have existing revenue splits with companies. Customers will also sometimes have negotiated discounts with companies that were included in offline quote process.  The pricing calculation on the eCommerce channel will have many different factors in determining a final price.
• What type of factors determine the distributor for an order?
  • Possibly determined by geography/location or based on historical/previous relationship. Would want to ask if there are existing tools/resources that are available to leverage in the eCommerce channel or if this functionality needs to be built.
• Do distributors have their own eCommerce systems that require integration?
  • This will probably be a yes, but the technical sophistication of the different distributors could vary greatly. Integration development and capabilities should be focused on lowest common dominator.  (Example: Instead of developing a full API to push pricing to distributors, maybe develop currency specific pricing they can download into a CSV from a website URL)
• Do distributors have access to the entire product catalog or just specific product types?
  • Certain products might be excluded from distributors or only available via distributor network. Because of acquisitions and mergers and existing legacy agreements a company might even have multiple distributor networks that handle different products.
• Are distributors or re-sellers involved in the fulfillment or delivery of the product?
  • Depending on type of product (electronic or physical) there are many different possible outcomes for this question.
• What type of visibility or specific functions should distributors have in the eCommerce system?
  • The data model and functionality of the site will need to handle different visibility rules of contracts for customers, distributors, and employees.