B2B online sales of goods and services
Internet has completely transformed the way customers interact with their service providers. Now the consumer is able to make smart decisions due to the plethora of information available online. They have many choices in front of them and can judge on a variety of basis including candid reviews of past customers of the same business. Further, the online shopping spree has made trade very convenient as anything ranging from hockey tickets to hunting gear can be purchased by a click of the mouse. The concept of local markets has been very effectively replaced by virtual global market.
It has also made a tremendous difference to the ecommerce between businesses. The process of business to business dealings has been completely altered. Many companies are now converting their managerial processes from physical to online. It has been accepted by research that companies that perform buying and selling on internet are potentially more effective in managing their inventory. Their goods can get to the market faster, their paperwork costs reduce tremendously and they can get much lower prices on several supplies.
Although the media is focused on the retail sales through ecommerce, however, the majority of profits earned through it are based on increased B2B sales. An illustration of it can be seen in the proportionate online sales which were $26.5 billion in 2004, among them the B2B sales were 75%, about $19.8 billion.
Still for many, it seems rather unlikely that companies can sell their products to each other online but that is complete contrary to the actual case. It is becoming an increasingly accepted business process all over the world. Big online shopping brands like Alibaba are now venturing into the arena of business to business sales and are experiencing a great increase in profits in the process.
Rather than doing business through traditional methods, the online B2B transactions make the processes much faster, cost friendly and efficient. Now the openness of online markets has caused downfall to monopoly and legacy building of local businesses. The internet platforms have triggered a rapid growth in manufacturers and other service providers as the B2B models work on the convenience of both the buyer and the seller. In fact the retail segment of the online B2B market has been predicted to reach double the size of online Business to consumer market by 2020. Currently, US and China lead the online B2B market with a predicted revenue of 25 trillion USD and 1.2 billion USD respectively by 2020.
As the cross industry online public platforms become popular across the world, the B2B online interactions are expected to shift from a one-to-many to a many-to-many business model. The difference it will make is that in the former model, the companies have to invest and build an online platform to facilitate its customers and suppliers, not the focus will shift towards finding a platform which provides solutions for anybody who wants to integrate the e-procurement system and ease the process of buying and selling online.