If you are fulfilling order requests for a retail store or a single end customer, the B2B and the B2C will seem a very similar concept for you. It may seem to you that is not much of a difference between the two concepts. However, many key differences don’t seem to be on the surface. B2B refers to business to business order fulfillments and B2C refers to business to consumer order fulfillment. Both the category of order deliveries is very different and requires different operation and processes to be conducted. Each delivery that your business to do whether to a single customer or an entire business, is required to reflect your brand name, otherwise, you might end up losing potential customers.
- What do you mean by business-to-business fulfillment?
- What do you mean by business-to-consumer fulfillment?
- The primary differentiators B2B and B2C order fulfillment
If you work with a suitable third-party logistics provider that perfectly aligns with your business ventures, then you might be able to navigate the key differences between the supply chain logistic, fulfillment services, inventory management, and warehouse management for the B2B and B2C orders and its respective complexities.
What do you mean by business-to-business fulfillment?
B2B is also referred to as B2R. Here the products are directly shipped to a business or a retail store. Here the average volume of the orders is much higher than the B2C so that the business receiving the orders can have enough inventory to sell from it. When the businesses place orders, they do it in advance and they do it in bulk so that they don’t have order frequently.
Accuracy is one of the major elements in B2B order fulfillment. Businesses will have certain compliance needs like SKU codes, product restrictions, tax rules, parcel labels, particular invoicing structure, and barcodes. As the order volume is large and is much bigger than B2C, it takes a lot more money and time to get delivered. You need to get more familiar with certain carrier information like air freight, sea freight, along with some international trade barriers such as tariffs, taxes, and subsidies, as you will need to ship the orders far and wide.
If you are choosing a third-party logistics provider for your B2B order fulfillment, then you need to make sure that the third-party logistics provider you chose is providing reliable and fast deliveries. As the businesses, also deal with many other companies, they highly expect that these order fulfilments be done with utmost accuracy and efficiency along with cost-effectiveness. The third-party logistics also plays a pivotal role in meeting orders in time. Mismanagement and delay by the third-party logistics providers can affect the reputation of the organization and this may incur certain penalties and losses that they have to provide.
What do you mean by business-to-consumer fulfillment?
As the term suggests, the B2C orders are directly delivered to the end customers. As the order comes from a single customer, automatically the average order values of B2c order are much lower than that of the B2B orders. The B2C order deliveries are also much simpler than the B2B, as there are not many rules and regulations that need to be followed while fulfilling a single order. These types of orders always have a pre-set price that appears and will display the same to every customer. The only exception to this is certain promotional or seasonal activities due to changes in demand or pricing. The payment process of the B2C orders is also very streamlined, as the online transactions are very advanced and accessible these days.
Generally, you are fulfilling one single purchase from an individual user with B2C order fulfillment. This type of order does not face that much of an entry barrier, as the customers are buying directly from your website. Moreover, in this time and age, everyone seems to be very comfortable with online shopping and even many customers find it more preferable than store shopping.
If you are working with a third-party logistics provider to complete your B2C orders, then they will make sure that your orders are delivered damaged-free to its suitable customer at its suitable location. Some third-party logistics providers also handle refunds and returns of the products.
The primary differentiators B2B and B2C order fulfillment
There mainly three stages that occur in every order fulfillment:
In each of these stages, there is some key difference in B2B and B2C order fulfillment. Let us discuss in brief:
The pricing of the B2B orders is set based on the requirements and needs of the end business. However, the pricing can vary depending upon the recurring orders, size of the orders, the duration of the contract, and payment terms. On the other hand, a B2C order is much more straightforward and does not deal with much complexity like the B2B orders. The pricing set for these orders is pre-set by the company and there is rarely any variation in that.
Revenue received off of every customer
B2B orders mostly include the bulk of raw materials and a large volume of orders, whereas the B2C order fulfillments usually consist of a smaller volume of orders like electronic items or personal appliances, etc. Therefore, B2B orders can be as high as a million dollars and can still be recurring, whereas the B2C orders will be usually in hundreds and will one-off purchase.
Often there is some sort of sales coordinator or account manager who helps in facilitating the exchange of goods for B2B order fulfillment. This lends a lot of help and support around the B2B order fulfillment process and more people are engaging in this interaction. On the other hand, in B2C order fulfillment, there is no need for any extra sales assistance, as the orders that are placed are directly placed by the end customers through an e-commerce business site.
The selling process in B2B order fulfillments requires more time that a B2C order fulfillment, as they need to go through department approval, requests for quotes, negotiation, etc. on the other hand, in B2C order the customers can shop around different websites, or they can just place an order right away. This takes way less time than the B2B order fulfillment.
B2B shipments usually consist of large volumes of products, which is purchased in fewer orders. These products will be sold directly by the retailer through their physical or online store. Therefore, the retailer will place the order only when he has to restock their fulfillment inventory center. On the other hand, B2C purchases are single hand purchases and often come in smaller volumes. These purchases are completed in a single transaction.
B2B payments are usually made within the contracted time duration suing traditional methods like cash on delivery, credit, or purchase order method. In B2C orders, the payment is made immediately via debit card, credit card, cash, or cheque.
Shipping and order fulfillment
As the B2B orders come in larger volumes, the shipment of these orders takes longer, requires sophisticated equipment handling, needs more money to complete, and professional unloading and loading of product pallets. On the other hand, B2C orders are low-cost as the packages are lightweight and sometimes have free shipping to it. Therefore, a single order can be shipped within a few days.
It is very important that you proper personal relationships with the retailers that are willing to sell your product. Often B2B contracts come with large volumes, recurring shipments, and personal partnerships. This contract is mostly a negotiation over a period and requires constant monitoring and follow up. These relationships should not be confused with the customer satisfaction which required for B2C order fulfillment. Customer satisfaction includes customer service, marketing, display of accurate products along with its details, on-time delivery, and proper order fulfillment that gives the ultimate customer experience.
Every business should have a suitable system for managing the returns whether they are dealing with B2B or B2C order fulfillment. The B2C process of return is very simple and straight forward. The B2C orders have direct return policies along with a full refund if the customers are not satisfied with the product and they end up returning it. If the returned item is not damaged and has all its tags intact, then the customer will get a direct return within a few days of returning it. On the other hand, the B2B refunds and returns are very complicated. The reverse logistic process gets way too complicated as they contain a large volume of products and order size, the contract that they are bonded to, and certain obligations that need to be negotiated. All these aspects have to be taken care of, then only a return process in B2B order fulfillment can be concluded.
Depending upon the kind of business you are running, you may opt for B2B order fulfillment or B2C order fulfillment, or maybe even both. Identifying the difference between each can be very difficult and challenging, but now that we have discussed each of its differentiators, you are better equipped to deal with it and make the right choice for your business.