Not all orders are created equal. There is a big difference between the infrastructure you need to fill orders for individual customers and the infrastructure you need to fill orders for retailers. After all, would you ship a single item to a store or a pallet to the home of someone buying from you online?
You need to make sure that your supply chain operations are optimized to handle both types of orders, and this is where knowing the difference between B2B and B2C fulfillment is critical. These terms refer to “business-to-business” and “business-to-consumer,” respectively. They may only be three letters each, but these abbreviations contain worlds of nuance.
There’s far more that distinguishes each type of fulfillment method than the order recipient. Your strategies, approaches, and set up for each process need to be configured to address the specific requirements and needs they bring to the table. Failing to do so could mean that you fall short when it comes to keeping your promises, which could lead to serious problems for your business. Read on to learn more about what makes these types of fulfillment unique and how they function to keep your supply chain moving in the right direction on all fronts.
WHAT IS B2B ORDER FULFILLMENT?
In short, B2B order fulfillment is the process through which your business delivers anything to another business, typically a retailer or distributor. The most distinguishing factor of this form of fulfillment generally is the size of the orders being processed. If you’re shipping goods to another company, chances are you’re sending a bulk shipment. This provides the retailer with a large enough inventory to meet consumer demand on its end. It also ensures that they don’t have to place countless smaller orders that would consume their time and potentially introduce more delays into the process.
Because these shipments are usually sizeable, great care must be taken at every step along the supply chain. Whether you handle fulfillment in-house or rely on a third-party logistics partner, it is crucial that orders are filled accurately, efficiently, and carefully. Any mistakes in terms of packing, labeling, or shipping could mean much more than the loss of a single item — it could mean your entire product line misses its chance to get in front of consumers in a timely fashion. You can also expect some fines. Therefore, the key qualities to look for when choosing a partner should be efficiency and cost-effectiveness.
WHAT IS B2C ORDER FULFILLMENT?
Selling directly to the consumer means each shipment is generally much smaller than those of B2B fulfillment. However, in contrast to dealing with other companies, individual consumers have many different expectations of you. Whereas retailers are ordering with an eye toward meeting demand in the future, shoppers typically want their orders filled immediately.
The rise of e-commerce and giants such as Amazon has raised the bar in terms of what most people expect when they buy something online. This often means next-day shipping, if not same-day. Any delays or mistakes that occur along the way have the potential to seriously damage your reputation.
Because B2C orders are filled as single items most of the time, there’s also a heightened expectation in terms of the condition in which they arrive. Whereas B2B shipments tend to be palletized bundles that feature additional packaging to protect them during shipping, B2C orders must be handled with more care because any damage that occurs during the process will reflect badly on you as a company.
When it comes to selecting a partner to handle this aspect of your logistics, the most important elements tend to be customer support, speed, and value-added services such as free shipping. Offering consumers a means of tracking their orders so they know exactly when to expect them is another crucial feature that can help build confidence in your brand. Providing your buyers a way to communicate if they have questions or concerns about their orders also is another element that should not be overlooked.
HOW THESE TYPES OF FULFILLMENTS DIFFER
There are three main stages of any order, whether you are selling to another business entity or directly to a consumer. These are the pre-purchase phase, the purchase phase, and the post-purchase phase. Although each type of fulfillment goes through these stages, there are some significant differences to each approach. Here’s how these shake out:
- Pricing: It should go without saying that an order consisting of a pallet of winter gloves will cost more than a single pair. In addition to that, however, there is another key distinction between B2C and B2B transactions. Consumers pay a standardized price for items, but the price for B2B orders may be impacted by several factors such as whether the order is recurring, the quality of the working relationship between the manufacturer and the retailer, or the overall size of the order.
- Revenue: Once again, the nature of the transaction makes the revenue per order significantly different between each type of fulfillment. A single B2B purchase may be in the form of a contract that lasts years and totals millions, whereas a single B2C order is typically a one-off that brings in only the revenue from a solitary item.
- Relationship: Brand loyalty may lead consumers to purchase additional items from a company over the years, but typically this happens on a case-by-case basis. On the other hand, B2B contracts are created with the intent to build long-term commitments for the mutual benefit of both companies.
- Instigating the sale: An individual shopper might be inspired to make a purchase based on a specific need or whim. Businesses, however, make orders based on extensive planning and forecasting that estimates expected demand and market trends.
- Making payments: Generally, a B2C transaction is as simple as the customer providing payment information and the vendor shipping the item. B2B sales, on the other hand, are based around credit and involve the issuance of invoices to be collected later.
- Order sizes: As mentioned before, orders made by businesses tend to be much larger and more expensive than those made by individual consumers.
- Fulfilling the order: Because consumer purchases generally involve shipping singular goods, they can usually be filled much faster than those made on a B2B basis. In addition, orders placed by businesses may require specialized shipping and handling methods, such as for perishable items.
- Reverse logistics: If a consumer receives an item that does not live up to his or her expectations in any way, returning it or getting a refund is a straightforward process. In the B2B world, the stakes are much higher. This usually involves the additional wrinkle of insurance and contract language surrounding the process for handling liability and losses.
- Customer service: The relationship between both sides of a B2B transaction is incredibly important, with vendors trying to build successful partnerships that should provide stability and security for years to come. When it comes to B2C fulfillment, all that matters is providing the goods ordered in a timely fashion and leaving the door open to answer any questions or concerns that might arise in the meantime.
THE WSI DIFFERENCE
As one of the nation’s leading 3PL companies, WSI has the capabilities to help your company meet your customers’ expectations. Whether you deal with other companies, directly with consumers, or both, you can count on us to provide reliable service with exceptional efficiency. To learn more about what we can do for you, get in touch with us today.