Are you a B2B business that is thinking of selling direct to consumers?
As retailers gain more customers they inevitably demand lower costs from their suppliers to increase their own margins. Unfortunately the internet has made it more difficult to maintain a B2B business because consumers are now clicks away from ordering any product. Luckily, B2B sellers can also take advantage of the internet and sell directly to consumers. You might be wondering, how B2B business can switch to B2C eCommerce model.
How To Sell Direct To Consumers
There are two ways for a B2B businesses to switch to a B2C model without upsetting your B2B clients:
Maintain MAP Pricing
Minimum Advertised Price (MAP) pricing is when a B2B business sells to consumers at full retail value. This is the most transparent way where B2B clients know you are selling to consumers. They don’t feel threatened because you are selling at full retail whereas they can discount their items if they want to. This method works best for business that have a strong brand reputation both from consumers and resellers. In this approach you would use one website domain where B2B clients would have registered accounts that grant them access to special pricing and potentially products. Depending on the eCommerce platform you choose, you may be able to offer customer specific pricing as well as support advanced shipping logic based on B2B vs. B2C orders.
Create a Flanker Brand
For sellers that do not want their B2B clients to find out they are selling direct to consumers a flanker brand makes the most sense. A flanker brand is when a company creates a new brand to enter into the same existing market that they already service, but the new brand focuses on targeting a different set of customers (e.g. B2C instead of B2B). This way your B2B clients will just think the new flanker brand is another new competitor instead of their supplier. Creating a flanker brand can be tricky depending on how willing or unwilling a company is to getting caught by one of their B2B customers. For example, a true flanker brand would typically want to fulfill orders from a separate location. That way a B2B customers can’t look at the return address and realize it is actually shipping from the same address as their supplier. Flanker brands make a lot of sense when a business may have a strong brand reputation among B2B customers but not the general B2C consumer.
I’ve had a good amount of experience running both types of eCommerce businesses. Neither is better than the other, they both have their pros and cons, it really just depends on the situation. If you want help converting your B2B business to a B2C eCommerce business (or a B2B and B2C eCommerce business), feel free to contact me.