There is a lot to be gained from the B2B market. Business customers usually put in larger orders instead of multiple small orders. This means you can save on overheads, handling, and shipping costs simultaneously, giving you a better margin on every sale you make.
Of course, the B2B market is not without its challenges. Before you start taking orders from business customers, you need to be extra certain that your business is ready for its first business customer. Here are the things you need to check before you get started with catering to business customers.
Cash flow is the biggest challenge in the B2B market. Unlike retail customers, business customers can take more than 30 days to clear a payment for the goods they order. You can offer discounts to get payments cleared sooner, but you still have to wait a minimum of 15 days in most cases.
This type of delayed payment will put some extra weight on your cash flow. Unless you can cover operational costs and expenses while maintaining a healthy cash flow, catering to a lot of business customers can be catastrophic to your business.
There are a few things you can do to prepare for the extra cash flow burden. For starters, you can set aside some business cash for this purpose. You can also turn to short-term financing for orders that you cannot fulfill yourself.
The next thing to look into is your production line. As mentioned earlier, business customers make larger orders instead of small and repetitive ones. Unless you have a manufacturing line capable of handling spikes in orders, you’ll be struggling to fulfill even the most basic request from your business customers.
Thankfully, you now have more options at your disposal. Many outsourcing companies let you offload some of your production needs to third-party factories to speed things up. Since you don’t need to invest in a bigger production line, you can keep your business lean and efficient in the long run too.
There is also the issue of distributing the goods to business customers. The usual delivery methods that you rely on for retail orders is not going to cut it. You need to work with shipping companies capable of moving a large number of goods quickly and efficiently.
It is also a good idea to invest in your own product handling team. You can save a lot of time and money by packing the goods yourself based on the customers’ orders. Pick up new pallets for shipping, develop a team of employees for handling business orders, and you will have the ability to fulfill business orders faster while minimizing mistakes and accidents.
The last piece of the puzzle is sales. Since business customers make their purchases differently, it is highly recommended that you develop a unique strategy for sales (and marketing) for the B2B segment. Since you have covered the three important basics we covered earlier in this article, you can focus your energy and resources on generating sales and venturing into the B2B market at this point.