M.com Part 1 (Semester 2)

E- COMMERCE

Most Important Question Bank for Current Exam

Q.7 Discuss the
characteristics of B2B model of e-commerce

ANS:

1) Custom
pricing features:

With a B2C e-commerce
website, pricing is usually simple as every customer gets the same price. B2B
ecommerce websites, there might be different pricing for different customers.
It could be because of the volume of business they do with them, the frequency
of orders, or the type of products they buy.

2) Custom Bulk
Discount:

Bulk discounts are a
common feature of B2B businesses. They are a way of encouraging higher order
values and building customer loyalty. They can be based on the quantity or purchase
amount.

3) Minimum order
quantities:

In addition to
policies like discounts for buying in bulk, many B2B stores also operate a
minimum order value for all or some of their products. Minimum order quantities
are often essential for managing margins and ensuring that B2B e-commerce company
remain profitable.

4) Flexible
Payments:

Having flexible
payment options is an advisable feature for any ecommerce store, but it is
particularly important for B2B businesses. B2B E-commerce company can offer
flexible p ayment option along with selected days credit facility.

5) Omni-Channel
Presence:

Scalable, responsive,
and fully customized e-Commerce platform solutions including mobile app and
website for B2B e-Commerce gives comfort and ease to customer at online store.

6) More business
opportunities:

A web store can help
strengthen online presence, letting potential clients and resellers find B2B
e-commerce Company through search engines. This is especially effective the company
chooses to make its catalog pages public. However, even if it decides to keep
catalog private, company can use targeted marketing content (Customers to whom
a company wants to direct its marketing efforts and o sell its products and
services) in web store to grab the attention of new clients.

7) Fewer
customers:

In the B2B
e-commerce, there are fewer number of customers. Although the market is small
with fewer buyers and sellers, but their orders are big.

8) Stability and
Loyalty:

In B2B e-commerce,
there is a very stable relationship between buyer and seller that goes for
years. Before signing any contract, buyers and sellers both plan their budget, revenues,
and rates. When both parties close the deal, then they rely on one another in
terms of supplies and payments. So parties are loyal to one another.

9) Lower cost: In B2B e-commerce, both parties spend a lot of time planning
and working on the details. In most cases, the work is done through automation
(including order entry, client information provision and customer service) that
eradicates the chances of errors and undue expenditure. Therefore, it leaves no
room for mistakes and errors. As a result, everything works out as plan without
costing any extra expenses. This especially true with ERP-integrated B2B
ecommerce.

10) Design easy
order system:

B2B companies selling
online need to put much effort into designing a website and ordering system
that buyers find easy to use. This means presenting product and service information
clearly, offering online demos or consultations and using order forms with
appropriate options for quantities and any special customization needed.

11) Reduces
Distribution Costs:

B2B transactions
reduce marketing and sales costs of the sellers. Eg. A seller need not to
advertise heavily to attract customers. Also, the seller need not maintain a
large number of sales force and support staff.

12) Reduces
Inventory Levels: A
seller need not maintain large inventory levels in anticipation of demand. The
seller can maintain the level of inventory based on the orders received online.
Therefore, the cost of maintaining inventory is less. Also, the buyer need not
keep a large amount of inventory. He can order for inventory as and when
required. The seller can supply the inventory under the just-in-time model.
Therefore, the cost of maintaining inventory is also less for the buyer.

13) Benefit of
Negotiation:

B2B permits
negotiation between buyer and seller relating to price quantity and other terms
and conditions of sale. However, negotiation is not possible in case of B2C
model. Negotiation benefits both the parties and therefore, there is higher conversion
of sales as compared to B2C model.

14) Lower
Rejection Rate:

Under B2B model,
there is lower rejection rate as compared to B2C model. B2B model permits
negotiation between the buyer and the seller. Also the sales representatives of
the seller meet the buyer with samples and also provide clarifications, whenever
required. Therefore, the return of goods is lower in the case of B2B model,
which in turn reduces the cost for the seller.

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