Wholesale etailers prefer B2B over B2C model

In April, a B2B ecommerce report by Frost & Sullivan suggested that the global online B2B market could reach $6.7 billion by 2020, with B2B accounting for 27% of the total manufacturing industry. It also explained the complexities of the model.

Groceries, stationery and unbranded goods are high on the priority list for small & medium sized enterprises who count on wholesalers to provide the product list efficiently and effectively, whilst also offering good savings. Online wholesalers are now also favouring the B2B model over the B2C model.

Advantages of online B2B model for wholesalers:

• Sourcing firms is inexpensive
• Assured revenue from re-orders
• High customer loyalty

Indian start-ups are also jumping on the online B2B bandwagon. To hear their testimonials read on:

GrocNation

Grocery provider, GrocNation which kicked off its operations barely six months back, reportedly has just 5 institutional customers but is achieving monthly sales of over 6 Lakhs. It serves companies in Ahmedabad, but is now venturing into 3 more cities in the next 1 year.

“In B2B grocery business, one can lock-in the customer through exclusive contract, which is never possible in B2C. With several B2C players, the customer acquisition cost is high owing to several marketing promotions, discounts and offers being made. Further, the customer loyalty is also low. Also, the average order size of a retail customer is low, which puts further pressure on margins in the B2C business,” said Vivek Singh, Cofounder, GrocNation.

Wholesalebox

Wholesalebox is less than 3 months old, but already distributes women’s apparel to over 600 clothes shops, after purchasing and picking up the merchandise from Jaipur, where it is based.

“Small traders nowadays have a leaning towards convenience and cost saving. Usually, a trader travels to various markets to source unbranded products, negotiate price on his own, involves multiple middlemen that increases his procurement cost 20-30% and takes all the trouble to transport the product. We get them their local unbranded product at their doorstep, with easy return policy and bring cost down by at least 20-30%,” said Chandan Agrawal, co-founder, Wholesalebox.

Zoffio

Zoffio which is headquartered in Bengaluru, provides stationary for small and medium sized companies. It believes it has an advantage over B2C and offline options, because better pricing transparency exists in online B2B.

“Bulk ecommerce players are providing a certain level of financial hygiene in the entire process of business transaction for the corporates, SMEs (small and medium enterprises) and traders,” said Abhishek Kamani, founder and CEO, Zoffio.

Are you a wholesale etailer? Which model works best for you?