B2B (Business-to-Business) or B2C (Business-to-Consumer), that is the question. Betckey, known as one of the top sellers of direct thermal labels on Amazon in the B2C sector, has ventured into the B2B business, and we've found a different answer.
The answer is simple: Don’t make choices, take them both.
As we mark the first year of building our first B2B business, I would like to share the insights we've gained about how our B2B business and B2C business mutually benefit each other.
1. How is B2C Business Beneficial to Your B2B Business?
Our B2C Business Increases the Credibility of Our B2B Business.
As a brand new entrant in the B2B sector, all of our bulk order customers are engaging in business with us for the first time. Consequently, our brand, Betckey, lacks a significant credit history with our customers. Another drawback of our B2B business is that my general manager insists on 100% prepayment. This policy may raise further doubts about our credibility among some of our customers.
Are you going to conduct business honestly?
Will you consistently deliver products of decent quality on time, rather than subpar items?
How can you ensure that there's no risk involved? T
These three questions are frequently asked by customers and are entirely reasonable and understandable.
So I will always tell our customers, 'We won't jeopardize our $20 million a year B2C business reputation for a single B2B order.' This statement effectively addresses the concerns of most customers with doubts.
In this scenario, our B2C business, with thousands of customer reviews and high ratings, is our most valuable asset in gaining our customers' trust. We are not an unknown company with an uncertain reputation; our brand continues to compete on a highly competitive B2C website.
However, some of them still don't favor our 100% prepaid policy, whether it's due to their cash flow constraints or their own vendor policies.
To be honest, offering Net30 terms can be a competitive advantage compared to us. So, how can we leverage our strengths to overcome this challenge? The answer lies in our B2C business.
Our B2C business enhances our fulfillment diversity in the B2B sector
In today's highly competitive business world, it's challenging to achieve complete competitiveness. However, you can strive to be more competitive than businesses that primarily focus on customer markets. Our B2C business, which requires us to maintain a large inventory, offers us the advantage of shipping substantial quantities of stock within North America in just 3-7 business days. In essence, if any of our customers run out of direct thermal labels due to underestimating their usage, which often occurs during expansion, we can replenish their inventory in a week, eliminating the time required for production and ocean shipping.
To be honest, not all customers are willing to accept a 100% prepaid policy, regardless of our competitiveness in other aspects. I'm currently working on a solution for this issue, but that's a topic for our next article
What if you're new to the B2C business, just like us? In that case, your existing B2B business can also support your B2C business.
2. Your B2B Business Helps Your B2C Business.
When you browse a brand's website, you often come across the names and logos of the brand's business partners on their homepage. Many brands dedicate a significant portion of their homepage to showcase the numerous brands they collaborate with, particularly well-known ones. But why do they do this?
Once More, Increase credibility!
Just as your new B2B business customers may have doubts about your product and service, your new B2C customers may also have some reservations, although the pressure isn't as significant as in B2B. However, when they see that you are a vendor for numerous brands, their trust is likely to be bolstered.
Our current website, Betckey, does not mention brand names and logos of our partners because most of them prefer to keep it a secret. Still, based on my previous experience, the conversion rate increased from 9% to 12%. I'm sure I don't need to emphasize how significant a 3% increase or a 33% boost in conversion rate can be.
What if your business doesn't have well-known partner brands? No worries, it can still work. This is because most people are only familiar with a handful of top brands that are closely related to their lives. Unless your primary customer segment consists of individuals like consultants who analyze top companies from all industries daily, displaying your partner brands on your homepage can still be effective. It's a matter of more or less. However, remember that having a few partner brands is always better than having none at all. Just ensure not to post them on your Amazon store, as it would violate Amazon's policy.
Expanding Product Variety And Strengthening Brand Recognition
If a company is matured in the B2B business, it's more likely to offer a diverse range of products rather than just a single product. This is because B2B customers often prefer to source multiple categories of products from one or several vendors to reduce fixed costs associated with mass production and logistics, thereby lowering the cost per unit. Interestingly, this preference also applies to B2C customers
Many customers tend to buy multiple products within a single category from one website or brand. This preference is driven not only by considerations of logistics costs but also by the value of time. Just think about how few hours remain in your day after working hard for 8 hours, spending an hour making a meal for your family, and another 1 to 2 hours dealing with traffic. Trust me, only a small proportion of people are willing to compare prices and quality across multiple websites.
Furthermore, customers often hesitate to trust websites or companies that sell only one or a few products, as it may come across as unprofessional. You wouldn't want to take chances on a website like that. Establishing trust with your customers is fundamental to building your brand identity. Brand identities are founded on the quality of their products and services, whether they are well-known giants like Apple or small startups. I've never come across a company with a strong brand identity that offers terrible products or services
Let's assume that everything else is the same. Would you prefer to order from a website with a wide range of products or a website with only one or a few?
I understand that it's common for start-up companies to face the challenge of having only a few products listed, but successfully sustaining a business under such circumstances is an achievement in itself, especially considering that 90% of businesses don't make it past their first three years.
If you have the ability to launch both your B2B and B2C businesses, don't make a choice—opt for both. We understand that budgets, manpower, and other resources are often limited. You don't necessarily need to fully commit to both of them. Simply start both and don't pass up opportunities as they arise. Your B2B and B2C businesses can mutually beneficial to each other.