• B2B E-Commerce – Are Promises of Profit too Costly for Businesses?  

B2B E-Commerce – Are Promises of Profit too Costly for Businesses?

E-commerce continues to become more and more important in the B2B sector. In April of this year, Forrester Consulting put 100 U.S.-based B2B companies operating in e-commerce during the past seven years.

According to the study, more 90% of the 100 selected U.S. companies surveyed certified that they achieved higher order values and ultimately increased profits due to their e-commerce channel. In addition, the internal costs for handling an order was also reduced.

  • 89% of all companies surveyed reported annual income had increased
  • 81% said that the average value per order had increased
  • 84% of these companies were able to lower processing costs incurred for each order

More than half of these companies, namely 52%, stated that e-commerce had actually become an entirely new business, since more than 30% of their e-commerce sales were not at the expense of other sales channels. In fact, according to the study, only two percent of the companies surveyed reported low or no growth in business due to their e-commerce channel in the past seven years.

The Forrester study also focused on how the individual companies had set-up and established their e-commerce channel. Nearly half of the respondents, 42%, said they used a third-party software vendor to build the initial online store application using a SaaS model. However, 24% of the companies surveyed are planning to rebuild the application and online store themselves, using their own IT infrastructure, data, and internal resources. 17% have done this right from the beginning of their e-commerce activities, while another eight percent, although they originally launched their online trading platform using a third-party solution, have long since integrated the application into their own IT infrastructure. Only six percent are planning to have their e-commerce services managed by a third-party service provider in the future. Another three percent that first built their own internal solutions have already since moved to a third-party service provider.

Finally, in this study, the market researchers also wanted to know how much these U.S. companies invested in their entry into the business model of e-commerce. The largest proportion of companies surveyed, with 34%, said that they invested between one and three million dollars, while 33% invested between three and seven million dollars. Only about eight percent of the companies surveyed had spent more. On the lower end, 19% of companies said they invested between $500,000 and one million in their e-commerce technology, and only six percent got along with lower investment costs.

The results are loud and clear. E-commerce continues to grow in importance in the area of B2B, and is proving to be a profitable new channel based on all the financial metrics. However, the cost and complexity of establishing an e-commerce channel can create a certain level of fear and hesitancy, and thereby impeding progress for companies considering this channel for their customers. This is a massive barrier of entry. To reduce the fear and offset these costs, companies must offer new value-added services and therefore additional revenue streams to reduce their risk. One clear path is to consider how to harness the revenue potential related to B2B payments. Traditional banking, online, or electronic payment methods cannot help you here, but Traxpay can. We’re here to help you take advantage of this seven trillion dollar marketing opportunity, and to ensure faster, safer, smarter B2B transactions.

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