Month: February 2023

The U.S. Census Bureau News reported that the retail ecommerce sales for the first quarter of 2022 crossed $250 billion, an increase of 2.4% from the fourth quarter of 2021. It represented 14.3% of the total retail sales. The B2B2C model is the latest addition to the ecommerce scene. Let’s learn some more about the B2B2C model.

You have seen businesses that operate on the business-to-business (B2B) model. You have also seen companies that work on the business-to-customer (BTC or B2C) model. Both the models have been successful in their own ways. Now, a new model is creating waves in the ecommerce market – business-to-business-to-customer (B2B2C). If the B2B and B2C models were successful, why should you involve another business between you and the customer? Let’s talk some more and find out about the B2B2C model.

 

What is a B2B2C commerce model?

A B2B2C commerce model is where one business (B1) involves another business (B2) to sell goods or services to its customers (C). If any of the involved companies use the internet to sell goods or services, it is called the B2B2C ecommerces model. In the B2B model, the businesses sell their goods or services to other companies. And in B2C, the organizations sell their wares directly to the end consumers. The B2B2C commerce model is the culmination of both these models.

So, what was the need to involve another business in the channel?

The market was limited when business was done mainly through physical channels. But with the development of ecommerce, suddenly, the markets became wider and the possibilities for business unlimited. However, it was not possible to have it all without a little bit of assistance. If one company had the product and the other company had the means to reach the consumers, they could join hands to increase the business multifold.

The following figure shows the concept of the B2B2C commerce model:

The first company provides the goods under its brand name, whereas the other company provides additional services, including lead generation, transport, credit, maintenance, and digital payment services.

In Figure 1, you can observe the following steps happening:

1. The manufacturer provides goods to the network seller to sell.
2. The network seller provides customer information and sales platform to the manufacturer in return for annual fees.
3. The network seller uses the services of a payment gateway to receive payment securely.
4. The customer buys the goods from the network seller, fully aware that the seller is not the manufacturer.
5. The customer makes payment and receives goods from the network seller.
6. The network seller makes the payment to the manufacturer.

This is a classic example of the B2B2C ecommerce model. You might have gone through a similar process when buying goods from sellers, including Amazon, Flipkart, or eBay.

 

How are B2B2C and white-labelling different?

One shouldn’t confuse B2B2C with white labelling. White-labeling is a process where the company manufactures the goods without its brand name and sells them to other businesses. These companies sell the goods under their own brand names. So, basically, the consumers are unaware of the origin of the goods. On the other hand, in B2B2C, the customers know the goods’ origins well.

For instance, some drug manufacturers provide generic medicines to other organizations. These organizations pack the drugs under their own brand name and sell them to consumers. Consumers are unaware that the drugs of two or more brand names come from the same manufacturer. They purchase goods trusting the brand name. This is called white-labelling. And in turn, the brand holder ensures the quality of the goods. On the contrary, if you are buying Nike sneakers from Amazon, you know that Nike is the manufacturer, not Amazon. This process is called B2B2C ecommerce.

 

Examples of real-life B2B2C commerce models

If you think that B2B2C is a concept in its initial stage, you might want to rethink it. Many organizations use B2B2C ecommerce in today’s market. Here are some of the examples:

Intel Inside

Intel manufactures computer processors. Intel has teamed up with original equipment manufacturers (OEMs), including Dell, HP, and Lenovo, for marketing/branding purposes. The synergy brings trustworthiness among the customers and thus increases sales.

Amazon

Amazon is an online platform for trading any type of goods. The sellers can retain their brand name while using the network base, logistic facilities, and payment gateways provided by Amazon. This increases their turnover. In return, Amazon gets fees for the facilities they provide.

App Store

Apple has devised a plan to help its customers download reliable applications and games from an Apple-approved space. It is called the App Store. It ultimately allows Apple to earn more revenue.

Affirm

The US giant Affirm is a financial organization that facilitates the customers in buying goods at present and paying later. Affirm collaborates with men’s and women’s fashion, sports and fitness goods, jewellery, electronics, and furniture brands to assist consumers in buying.

UberEats

UberEats partners with the local restaurants to deliver food to the customers. The customers can enjoy the food served by any restaurant from their homes. The restaurants make more sales than they can do remotely. Uber Eats gets a commission from every delivery they make.

 

What are the advantages of the B2B2C commerce model?

Many companies are morphing their businesses with others to reap the benefits of the B2B2C commerce model. Every organization has something to offer to the other and two organizations would merge depending on their strengths and weaknesses. Although the advantages of the B2B2C model vary in every synergy, here are some of the common ones:

Scaling

The primary goal of any business is to maximize profits, and scalability is a way in which they can achieve their goal. Scalability represents the ability of an organization to increase the output by adding resources. Instead of trying to do everything on their own, companies can adopt the B2B2C model to achieve scalability. They can partner with an existing company already providing the given services to increase growth.

Digitalization

Digitalization is the way to scale your business. You can widen your customer base by taking your business online. However, going online needs additional setup and management capabilities that are not available to everyone. Partnering with other companies specializing in these fields is a way to go forward. For example, instead of selling on your website, you can start selling on ecommerce platforms like Amazon or eBay to test whether you receive a good response. They can give you access to a client base you didn’t have before.

Brand recognition

In the B2B2C commerce model, you can sell your goods with your brand name. As your customer base grows, your brand image grows too. More and more people will recognize your products, and their reviews can bring in more customers. You can take on any competition when your brand value increases.

Cost control

Scaling begs for massive investment. Instead of starting an in-house unit, if you collaborate with another team to provide the facilities you require, you can save on setup and maintenance costs. Moreover, the cost of consumer data collection can be shared by all the relevant parties. Start-up costs, marketing costs, distribution costs, and customer acquisition costs can be controlled drastically by employing the B2B2C model.

Time management

When the manufacturers team up with the maintenance companies, the customers can get faster services. This will encourage the customers to buy from a company that provides faster after-sale services. The same principle applies to the companies that can deliver the products faster.

Customer satisfaction

The customers benefit significantly from the B2B2C models financially and otherwise. The companies can transfer some of the cost-saving to the customers as discounts. The customers also get the facility of dealing with just one company for their multiple needs. So, it becomes more accessible and more straightforward for them. For example, if a customer buys a television from a store and gets the facility of paying in installments from the same store, they would prefer it. Some banks and financial companies provide such facilities to customers in association with the stores or manufacturing companies.

 

What are the challenges to set up a B2B2C commerce model?

If you are a B2B business or a B2C business transitioning to the B2B2C model might take some time and effort. However, once you are done, the benefits are numerous. Marc Benioff, the chairman, and CEO of Salesforce.com Inc. said, “We really see every B2B company and every B2C company becoming a B2B2C company.” Some of the challenges faced by the businesses in setting up B2B2C commerce or B2B2C ecommerce model are as follows:

Identification of area for B2B2C partnership

As a business owner, you should know whether you can benefit from the B2B2C model. Some products are not suited for such models. Secondly, you should determine whether you can cope with increased demand. If you cannot produce more to keep up with the increased demand, you might face embarrassment in your business circle.

There are mainly two types of business integrations – horizontal and vertical integrations. Horizontal integrations mean increasing the capacity of the pre-existing unit and producing more of what you are already manufacturing. On the other hand, vertical integrations involve taking up one or more stages of the supply chain in addition to the existing one.

One of the significant decisions you should be making is the area where the other business can help you. You should identify the area in which your organization needs support. For instance, if you can sell your product with an extra warranty, or you can sell more if you have a logistic partner, or if you need access to customer databases to identify your customers. By identifying a particular niche, you can narrow down on potential organizations that can help you achieve your goals.

Management of inventory

When you sell on multiple channels, it becomes cumbersome to manage inventory in real-time. Imagine a scenario where you have a brick-and-mortar store and sell your goods on multiple ecommerce platforms. If you run out of stock while simultaneously operating on all, and the stock on ecommerce platforms is not updated, you might find yourself in some soup. You might actually sell more goods than you have on hand. Therefore, inventory management is one of the crucial challenge areas of the B2B2C ecommerce model.

The solution – adopt a reliable inventory management software that will help you maintain real-time inventory of all your products. An inventory management software can help you keep real-time stock of all your goods in your locations.

Brand credit

Sharing the advantages always comes with sharing the limitations. When you adopt the brand name, it might also lead to the issues it faces. And, you don’t want yourself marked ‘guilty by association.’ It is advisable to check every aspect of the company before entering into a contract for B2B2C. If the company’s goals are not in sync with yours, you might want to reconsider the association as your brand image is online.

Software compatibility

When two businesses merge, they both must have IT systems compatible with each other to transition without any hindrance. If not, you should hire an IT expert who can assist you in morphing the two systems seamlessly.

Individual contributions

Both the companies should agree on and lay out clear boundaries of contributions towards the achievement of the common goal. The agreements should be reached with mutual consent and followed by all the parties involved.

Legal agreements

In the case of B2B2C commerce, the businesses involved getting access to private information about the other business. There should be clearly defined legal agreements to protect the stakeholders’ privacy and sensitive information. Legal teams representing both parties can work out solutions that are to be adopted for more robust security.

 

Final thoughts on B2B2C commerce model

B2B2C commerce models are the way forward in today’s economy. If the businesses want to tackle competition by expanding their prowess, B2B2C models are the perfect solutions. These models provide customer satisfaction akin to B2C models and growth like B2B models. B2B2C ecommerce models can help you elevate your profitability and margins by combining the best of both worlds.

Automating the B2B2C ecommerce model on Cin7 can help you maneuver the process in a simple way. You can click here to know more about the Cin7 software.

In today’s fast-paced world, convenience is everything. Consumers want to shop when and where it’s best for them, and retailers are looking for ways to meet those demands. One method retailers use to give their customers what they want is “Buy Online, Pick Up In Store” (BOPIS). This strategy, which is gaining in popularity, is being offered by more and more retailers as part of their omnichannel fulfillment process. Let’s examine what BOPIS is and how it’s changing retail.

 

What is BOPIS?

BOPIS is a shopping method that allows customers to purchase items online and then pick them up at a physical store. It is, in fact, a great system that helps retailers streamline their operations while giving their customers a seamless shopping experience. When implemented correctly, BOPIS can facilitate flow as customers go from online to in-person shopping channels, allowing them to have the best of both worlds. By synchronizing and integrating these different channels, retailers can attract more customers, something that will give them a competitive advantage.

In addition to BOPIS, there are three related strategies retailers can adopt to improve their customers’ experience:

1. Buy Online, Pick Up At Curb (BOPAC) – meaning that customers can collect their online purchases outside a physical store, often without needing to leave their vehicles.
2. Buy Online, Return In Store (BORIS) – goods purchased online and delivered to a home can be returned to a physical store.
3. Reserve Online, Pick Up In Store (ROPIS) – items can be ordered online but paid for as they’re picked up at the physical location. The advantages of this method are (a) the customer can put a hold on an item before it sells out, and (b) they can inspect the item before actually paying for it.

 

Impact on retail and ecommerce

It’s fair to say that BOPIS has had a significant impact on both retail and ecommerce. First, it brings more shoppers into the physical store because online shopping has a much wider reach; second, the collection method allows retailers to move inventory faster, a factor that improves the bottom line; and third, the pick-up option is good for order management and inventory fulfillment. It’s a faster process that makes stock turn over in a shorter period of time, and as a result, there’s less chance of items sitting in stores for a long time and becoming obsolete and less chance of stock running out.

 

Benefits of BOPIS

1. Increased sales

One of the main benefits of BOPIS is convenience for the customer. The pick-up option means they can get their item right away without having to wait days for a shipping service to deliver it, something that’s especially important when they buy perishable goods like groceries. For the retailer, BOPIS expands the reach of their physical stores, bringing many more customers into them and increasing sales.

2. Improved inventory management

When shoppers pick their items up directly from the brick-and-mortar store, inventory moves through the system quicker. This increased speed helps retailers keep a closer eye on their stock levels, enabling them to anticipate stockouts or predict obsolescence. Another benefit of inventory moving faster is that it creates room in storage for new products and styles, keeping the store fresh and relevant. All in all, the result is better inventory management.

3. Increased customer loyalty

BOPIS builds loyalty because it provides a positive and convenient shopping experience. Customers can examine items before they take them home, ensuring their satisfaction with the product and trust in your service. Plus, when customers are at the store for their pickup, they could be enticed to look around inside and get something else.

4. Reduced shipping costs

When customers pick up their purchases themselves at a store, there are fewer shipping costs for the business. While they may need to ship the item to the store, moving items in bulk is less costly than individually shipping items to the customer’s home. These savings are increased even more when it comes to large or heavy items since they can be really costly to ship.

5. Improved online and in-store integration

When retailers offer BOPIS, they can integrate their online and in-store operations, creating a seamless shopping experience for customers. By integrating their channels in this way, retailers can also give customers a better selection of products more efficiently at a lower cost. A cloud-based order management system can be a great asset when implementing this personal pickup system. It offers a unified ordering and tracking system, which in turn streamlines the whole process and reduces errors. This helps retailers to keep track of their inventory, manage their orders, and secure payments more efficiently.

 

Challenges to implementing BOPIS

Some retailers may find it difficult to coordinate their online orders with the inventory they have in their stores. Alternatively, a company might find it difficult to find a convenient pickup location for a customer, one that can fulfill the order quickly. Roadblocks like this could be stockouts and delays.

One way around this is to have a dedicated employee, or employees, take care of BOPIS orders. Another is to create a designated area in the store specifically for the pickups, somewhere that’s easy for customers to find and has room for them to line up without getting in the way of anyone else. It’s also important to have an inventory management system that works in real time. The Cin7 Omni system does this as it tracks your inventory in every storage facility you manage and across each one of your sales channels.

 

BOPIS in action

Despite these challenges, many retailers are turning to BOPIS to meet consumers’ needs and boost their bottom lines. Walmart and Target are two of the biggest retailers offering the service, and since doing so they’ve seen their online sales increase. These chains have also introduced technology that makes the process even more efficient for customers, technology that gives them online notifications when their order is ready for pickup and facilitates mobile check-in when they get to the store.

 

Conclusion

There’s no question that BOPIS is revolutionizing the retail industry. It gives consumers a convenient and personalized shopping experience they like, while boosting sales and reducing shipping costs for retailers. The BOPIS method can present challenges for sure, but with the right tools and software, any challenge can be overcome.

If you’re thinking about introducing BOPIS to your online retail business, consider Cin7 Omni software. It’s an all-in-one platform that offers a number of useful features, many of which you’ll find helpful when you introduce these in-store pickup options.

If you’d like to know more, schedule time with one of our experts and be given a demo.

Guesswork plays no part in today’s business world. Every decision that’s made, every action that’s put into place is based on verifiable needs, and this verification comes from precise data. When manufacturers order raw materials for the products they make, they do so with a knowledge of the quantity they’ll need to complete their orders. And when retailers get items from their suppliers, they do so using models that tell them the number they’re expected to sell. In other words, they plan.

Unforeseen circumstances aside, this planning eliminates the chances of being left with unwanted inventory – overstocking – or finding out too late that there isn’t enough of it – stockouts. If the latter happens, the ramifications could be damaging. When orders can’t be filled, reputations are put on the line and customers could go somewhere else. A retailer that sells on Amazon could even have its ranking lowered if it can’t fill orders. On the other hand, being stuck with too much inventory is a wasteful use of resources, including financial.

Companies get the data they need for this planning from software that oversees and manages their supply chain. When it comes to getting the right inventory levels, this information is used to make predictions about upcoming needs — that’s demand forecasting; and when actions are taken on these predictions, we have demand planning. These are the areas that we’re going to look at today. And we’re going to look at them with an emphasis on how the combination of these two impacts the supply chain and overall profitability of the company.

 

Demand planning overview

As outlined above, demand planning is about taking the expectations for future inventory needs gleaned from forecasting, and acting on them. In other words, if forecasting predicts that x number of a particular product is going to be needed, planning will issue the sales orders for them.

To parse that out and explain it more, forecasting gathers data from the company’s historical sales, consumer buying patterns, and market trends, and then combines that with variables like weather conditions, shipping issues, and lead times to get an accurate picture of future needs: which items they should order, the amounts they should order, and when they should order.

Demand planning, then, is putting this forecasting into operation. It’s putting in the sales orders for the right items in the right quantities to prevent overstocking and stockouts; it’s making sure there’s enough space in the storage area for them; it’s making sure there are enough cardboard boxes in the shipping department to get them out the door; it’s making sure every section of the supply chain is ready and can process orders with as little downtime as possible and with the least amount of waste.

When demand planning is done right, the supply chain is humming. Inventory is at optimum levels and orders can be filled in good time, efficiently, with the least amount of expenditure.

 

Components of demand planning

1. Analyzing sales data across multiple channels and locations

Analyzing the sales history across sales channels tops the list. However, when you sell on multiple online platforms and have your physical stores at various locations, gathering and analyzing all the sales data can take time and effort. And it’s also not productive to do it manually, as you have other important things like your business expansion and customer satisfaction that need your attention.

Cin7 Omni’s inventory and order management software connects your online and offline sales channels, enabling you to access all the sales data at your fingertips. You can view the sales history of each customer from every sales channel on Cin7 Omni’s homepage dashboard. Thus, you can understand the customer’s purchasing behavior, buying pattern, best-selling products, and slow movers and target the customers with relevant products.

2. Calculating inventory turnover ratio

The inventory turnover ratio indicates how efficiently your company uses its inventory and your overall business performance. With Cin7 Omni’s insight tools and precise inventory and sales data reports, you can accurately measure Cost of Goods Sold (COGS) and inventory turnover ratio. You can intervene earlier if you find any excess inventory or lag in your sales and put things back on track the earliest. You can also derive competitive price offerings to stand out from the competition to meet existing customers’ demands and attract new customers.

3. Independent Demand

The demand here refers to the end product. For manufacturers, this means finished pieces; for retailers it means the items shipped out to customers. Knowing the quantity of end product needed is the first step in demand planning.

4. Dependent Demand

This is about the components that make up the finished, or end, product. Basically for a manufacturer, the planners have to make sure they have all the bits and pieces and raw materials needed to put whatever it is they’re producing together, and they need them in the right quantities to satisfy the independent demand.

Cin7 Omni’s inventory and production management software is a useful tool for dependent demand planning. It can generate a detailed Bill of Materials (BOM), which is an itemization of the raw materials needed to put particular goods together and the quantities they’re needed in to fill a particular order. It can also produce weekly reports on both materials used and the progress production is making, statements which allow you to check that your demand planning is on target. As a bonus, the digital system can even instruct the machinery on the shop floor to start up, and it can do this as soon as it detects that there’s a predetermined minimal amount of orders in the works, a predetermined level set by you.

5. Monitoring the production process

If you’re a manufacturer, monitoring the raw materials, tracking the finished goods, and keeping the production time down is mandatory to run a successful business and meet the customers’ demands on time.

6. Monitoring, tracking, and managing inventory

Stocking the right inventory levels across your sales channels is mandatory to meet the customer’s needs on time. Besides stocking right, having optimal inventory control is crucial — preventing inventory from turning obsolete, maintaining goods at optimal conditions, and ensuring no discrepancies are all a part of managing inventory.

With Cin7 Omni’s inventory management software, you can readily conduct regular stock takes to ensure your stock is in optimal condition. You can also assign a batch or serial number to track the goods and dispatch the old stock first. Thus, you can minimize the risk of your inventory turning obsolete and sell goods on time at better profits. The right inventory at the right levels at the right place at the right conditions ensures a smooth supply chain.

The software also supports product bundling, enabling you to bundle relevant products and sell them at a competitive price. To top it all, you can rely on Cin7 Omni for managing your returns as well.

7. Internal processes demand

Here, we’re talking about demand planners making sure there’s no hitch in the supply chain. It’s about ensuring there’s enough space in the warehouse or storage area to place items for those projected orders as they come in from the suppliers. It’s about ensuring that everything is in place to move items from the warehouse to the end consumer — the right equipment, the right level of packing materials, the right shipping services. And it’s about having enough spare parts on hand to cope with machine breakdowns along with enough staff to keep everything flowing smoothly.

8. Managing product portfolios

Demand planning requires businesses to understand their products and lifecycles from introduction to phase-out. Product portfolio management is a part of demand planning that involves maintaining the entire portfolio of products you sell. Products are often interconnected, and the sale of one product affects the sales of another. Maintaining a product portfolio is helpful, especially when you add new products to your portfolio, as it helps you understand how the new product impacts the sale of existing products.

9. Analyzing current trends

Besides internal factors, external factors like weather, health, or economic crises impact business performance. Thus, apart from analyzing sales data and other internal factors, considering these external factors are also vital. Having a dedicated team to acquire external data on current events like health crises or natural disasters will help your business to promptly adapt to market volatility and prevent possible supply chain disruptions. A transparent system like Cin7 Omni will help you stay connected with your suppliers and track your goods during uncertain times. Therefore, you can efficiently manage the supply chain and ensure the timely delivery of products to your customers.

10. Managing trade promotions

While marketing and promotions may seem tangential to demand planning, arranging for advertising, discounts, and giveaways is an actionable part of the sales cycle and so should be included. The same goes for trade shows. In effect, this is because publicity attracts interest and helps sell the products and goods a company offers.

Cin7 Omni can be a great help in this area. It can set up discounts and set start and end dates of a particular promotion, and it can apply those promotions to whatever of your products you choose.

 

Demand planning and supply chain management

Demand planning affects supply chains in the following ways:

It streamlines inventory management.

• It puts relevant sales strategies in place.
• It makes sure all resources are used efficiently.
• It encourages companies to negotiate with suppliers for better deals.
• It results in high levels of customer satisfaction.

Wrapping up

Having the right amount of everything in place in the right quantities when it’s needed is at the heart of a well-run business, and why getting demand planning right is so crucial.

Cin7 Omni is a great way of maintaining flow from one stage of the process to another. It has features that can make supply chain management hassle free, and the data it produces can be put towards forecasting and, as a result, better demand planning.

To find out more, click here to schedule a demo with one of our experts today.