Going from B2B to B2C: the online sales movement



LEE-ANNE TOBIAS

There has been a lot of noise on digital platforms in the past weeks about the sale of 11.11.

Admittedly, only a small segment of the population has been able to escape the ubiquitous online and billboard advertisements about it. Filipinos used their breaks to research the best deals and register their finds in time to verify the date itself. Others were constantly comparing notes on their planned purchases the previous week as well. The sales promotion of 11.11 already seemed successful even before closing on that date.

While this type of promotion has been rolled out on a regular basis, other local retail stores were expected to roll out their own 11.11 promotions to capture some of the sales spurred by the ensuing frenzy. One of the glaring differences that e-commerce platforms like Lazada offer small retailers and startups, however, is an opportunity to inflict brand awareness during these “sale parties”.

Through the design of the website, consumers can see a selection of other brands available in the categories in which they shop. The offers are usually too good to pass up. For example, brands that are cheaper than proven brands or private labels would be more likely to be purchased through an online platform.

If you are a small or medium-sized business (SME) owner, but also target business, you may have thought about expanding your products and services to capture the end user as well. Selling through online platforms won’t necessarily increase your sales, but it can definitely build awareness for your brand.

Know the difference before making the switch

Should B2B (business-to-business) companies make the switch? If this is the best option to scale and a business is able to grow to meet the needs of the consumer market, then it would be a good risk to take. Of course, you have to evaluate the details to make a good, informed decision.

Typically, both models require great customer service, but the focus of communications is different. Marketing to businesses would be more direct and targeted because they know the industry better and the products or services you offer. When it comes to selling what you offer to consumers, you have to be prepared to be emotional. This means that instead of delivering functional benefits to your B2B customers, consumers need to be “wooed” to capture their minds and hearts. It’s not just the functional benefits that appeal to consumers that are generally more fickle, but the intangible benefits that also target their psyche and emotions. For example, buying valuable meals from a fast food chain not only helps those on a budget (functional benefit of saving), but also achieves an emotional benefit like friendship goals (an intangible goal for the youngest market in terms of integration).

Providing regular communications to consumers can also be more expensive when it comes to planning and executing marketing goals, but if done right, it could unlock great potential for SMEs.

Another very relevant point of difference concerns the terms of payment between a business and a consumer market. Companies that buy wholesale have the privilege of paying on a longer term (30, 60 or 90 days), depending on the industry and the agreement between the buyer and the supplier. Many B2B SMEs have noted that the struggle they face whenever they encounter negative cash flow spikes is due to late payments. These may be unavoidable and SMEs, in turn, try to improve their current financial capacity for such events.

However, most fail to do this, especially when faced with multiple purchase orders or business opportunities during such times. The consequences of not paying on time have a direct impact on the ability of SMEs to accept new projects due to lack of capital expenditure. So instead of earning more income and evolving, they have no choice but to give up the business opportunity.

Sometimes B2B SME owners run into clients who just aren’t paying off their debts. Some would even go so far as to file cases simply to recover from their customers. When it comes to late payments, B2C businesses are more protected, as small purchases require cash payments.

For credit card terms, they are also usually shorter than B2B payment terms. Indeed, it allows smoother operations for SMEs thanks to a shorter receivables cycle.

The advantages of selling on an online platform for SME owners

Offhand, if a small business owner decides to go to consumers, selling through online platforms introduces the brand to a larger market, which is the essence of B2C (business-to-consumer) marketing. Sales might not perform as well as popular brands, but they sure live up to their name, so when the budget calls for trying something cheaper or if a bad experience calls for trying a new brand, it could. fall into the next possible option.

Partnering with online platforms also resolves logistical limitations, as they are better equipped with shipping logistics. If your business is only able to deliver to specific locations, this is another great way to market your brand to more cities and provinces.

Support for capital expenditure

Time is important. Your competitors in the sector with the same B2B model may already be considering the same movement. It is better to anticipate more competition when it would be easier for consumers to stifle too much noise.

The important things to remember when planning for change and its success are the benefits that the change provides to your business and whether your business is capable of it, both financially and logistically.

If you think your cash flow is too thin at the moment, you may want to consider help from financial technology (fintech) companies like First Circle. First Circle offers fast, convenient and reliable financing. The Philippine government trusts us and we are a financial partner of the Ministry of Commerce and Industry. First Circle is one of the financial technology companies licensed by the Securities and Exchange Commission.

To learn more about First Circle’s financial solutions, visit our website at www.firstcircle.ph.

Lee-Anne Tobias is the Senior Communications Associate for First Circle Growth Finance Corp. She has 10 years of experience in digital media, corporate communications, corporate social responsibility and qualitative research in the energy and market research sectors. Email him at [email protected] To learn more about First Circle and its fundraising services, visit www.firstcircle.ph.


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