B2B e-commerce is bigger than ever: The landscape leapt to $1 trillion in U.S. sales for the first time in 2018, according to Forrester Research, accounting for 13 percent of all U.S.-focused B2B sales. And it shows no signs of slowing down anytime soon. By 2023, in fact, studies predict employee-generated e-commerce transactions will be close to $2 trillion. A strong economy, low unemployment and a shift in B2B purchasing to e-commerce from traditional forms of buying are all contributing to the boom.
For retailers and suppliers in the gifts and housewares space, though, tackling B2B e-commerce is just one of a host of daunting industry challenges. Global retail is transforming to meet consumer demands for seamless customer experiences, no matter whether they buy products online, in-the-store or on-the-go. There is ever-growing fierce competition from behemoth retailers such as Amazon and Wal-Mart. Possible changes in tariffs are keeping businesses on their toes.
Trends are shifting faster than ever—including sustainability, private labels, and personalization—which means gift and housewares companies must be flexible and agile enough to keep up.
B2B e-commerce picks up speed, but payments can hold business back
As B2B e-commerce picks up speed, however, gifts and housewares companies must figure out how to deal with both the opportunities and the obstacles of this growing, global market. Buyers and sellers of all sizes, from small businesses to larger brands, have to contend with complicated transactions, price negotiations, delivery discussions, and multiple decision-makers.
Traditional B2B commerce has long been constrained by the delays and asynchronous transactions caused by paper checks, invoices and inefficient risk profiling based on traditional credit models, while cross-border payments add even more bureaucratic layers of fees and taxes.
For both sides of the gift and housewares industry, it’s easy to see how these payment challenges can hobble businesses looking to grow. Buyers typically want or need extended time to pay to scale growth, but they also want goods and services delivered promptly to meet seasonal needs.
However, delayed payments mean that B2B gift and housewares sellers may become financially stressed, unable to properly invest in new inventory or prepare for the latest design and style trends. This is no minor issue: Late invoice payments affect over half of small businesses, according to Fundbox customer data.
The new win-win equation in B2B e-commerce payments
What if both buyers and sellers could get what works for them in a B2B e-commerce transaction, including in today’s popular B2B e-commerce marketplaces?
The right business credit solution can solve the B2B e-commerce payment conundrum so that everybody wins. That is, qualified buyers receive access to credit within minutes to finance B2B payments at the point of transaction—that is, at checkout. Payments go to merchants right away, while buyers can apply for Net 60 terms or, in some cases, pay a flat fee to get even more extended terms.
This is a brand-new way of addressing B2B e-commerce payments is a particularly important development in an industry such as gifts and housewares, which is filled with small firms providing specialized offerings.
For example, take an online wholesale B2B marketplace such as Fitzroy Toys, that connects small toy brands with retailers. The average toy store using the marketplace deals with hundreds of vendors for everything from trains and dolls to puzzles and plush, in order to fill their shelves and tempt customers. Traditionally, handling payment terms for so many suppliers would be mind-bogglingly complex, with a vast paper chase of PDFs or faxes to set up payment terms for each one.
With a technology-driven business credit solution, these toy retailers can stock the products they love without sacrificing their ability to spread out their payments. Toy brands can get their products into stores using their own wholesale policies, while accounts receive payment deposits into their account as soon as the next business day after receiving a confirmation.
The gift of credit
The credit crunch is due to disappear for hundreds of thousands of gift and housewares buyers and sellers across the U.S., thanks to a new era of B2B e-commerce payment platforms.
For brands, suppliers, and retailers, these better digital credit offerings are a B2B e-commerce game-changer. It will help unlock the potential of small businesses who cannot take on big credit risks.
Now, both buyers and sellers can enjoy the freedom to bloom, grow and thrive, and do what they do best: Meet the needs of their customers with the best products and services possible.
To you navigate an evolving B2B payment landscape, read our Ultimate Guide to B2B Payments.