Year after year online marketplaces and selling platforms generate more revenue and grow in profitability. The U.S. Department of Commerce quarterly retail e-commerce sales report estimates third quarter 2020 eCommerce sales were $209.5 million, amounting to 14.3 percent of overall sales in the United States. This compares to 2019 third quarter sales of $153.2 million, or 11.2 percent of total sales and 37% growth rate. Worldwide, estimates for retail (B2C) eCommerce sales exceeded $4 trillion in 2020.
For smaller companies, selling online helps gain exposure to new markets (both domestic and international) without bearing the typical cost burden associated with physical sales offices and associated support staff required to usher deals to completion. Online marketplaces are not only economically advantageous for B2B transactions but have become financially desirable for vendors to ramp sales quickly and provide revenue growth.
While B2B eCommerce sales lag those of B2C, estimates exceed $1 trillion yearly and are expected to exceed $2 trillion within a decade as B2B sellers continue to grow and expand their online presence. According to experts B2B eCommerce has the most potential for growth and expansion.
Practical ECommerce’s article 5 B2B ECommerce Trends for 2021 states, “In 2021, expect B2B suppliers to use consumer eCommerce technology and practices to attract new business customers and cater to a different sort of purchasing professional. B2B eCommerce shopping experiences will rival B2C with better websites, sales channels, mobile apps, and an appropriate level of personalization, integration, and customization.” The author anticipates that B2B supplier marketing efforts will look more and more like consumer-facing businesses.
The vendor-centric topics below will help you learn new ways to extend your company’s reach, gain new customers and enter new markets.
Exposure to new markets, domestic and international
For new oil and gas suppliers, B2B eCommerce platforms can help reach initial customers and grow beyond a local base. Because they are not tied to a single geographic location, these platforms are open to any potential customer, from anywhere, who visits online. ECommerce helps smaller technology providers increase visibility and grow sales. These companies can introduce products and tools to a global audience in countries and markets where it would be difficult or impossible to have a physical presence.
Level the playing field
Online selling marketplaces offer smaller niche suppliers the opportunity to market products and compete directly with larger international competitors. Through these marketplaces and platforms, regional and specialized suppliers have equal exposure, potentially increasing buyer access to higher quality and more specialized equipment from other regions worldwide.
Lower operational and startup costs
With virtual eCommerce platforms, no physical ‘brick and mortar’ storefront is required. Minimal staff working remotely can easily scale up operations without major sales infrastructure or frontline workforce investments, potentially resulting in higher margins. By focusing only on product development, manufacturing capacity and logistics, financial and time savings can be gained as businesses manage the sales process online.
Opportunity for exposure to international RFQs
Many large international oil and gas operators require a certain number of responses to RFQs. Whether these requests are for a new bit for a single well, or for 100 mud motors for a full-field development, successfully quoting these international RFQs through a B2B eCommerce platform places your company directly in front of the operator’s procurement team.
Secure transaction, payment and automation
Payment gateways are one of the preferred choices for B2B eCommerce transactions as this payment selection option reduces fraud, allows multiple payment types and encrypts buyer data. Other secure payment options vendors may accept include bank transfers and credit card payments. A recent article on profitwell.com explains that “There are more rules and regulations dictating how and when [B2B] payments are made, as well as the payment method being used. Whether it’s contractual obligations or federal oversight, these regulations result in the need for more process standardization that typically wouldn’t exist in B2C payments.”
Whether you have already started your B2B online marketplace or are considering doing so, understanding the guidelines above can help steer your eCommerce strategy. No longer are sellers confined to one region or a specific geographic area but can easily obtain a global presence. From the buyer’s side, eCommerce provides a better selection of products and access to a range of technologies that were previously unavailable.
Run In All is a marketplace purpose-built for the oil and gas industry. This 2.0 digital procurement and supply chain platform is designed to streamline your processes. Our vast product selection and intuitive processes make it is simple for operators to find the right products to support their operations, and for suppliers to extend their reach to a global audience. All transactions are performed on a secure, efficient, and collaborative platform built to help your business succeed.
ECommerce is especially well-suited and beneficial to the oil and gas industry for each stage of the energy supply chain.
For new oil and gas suppliers, B2B eCommerce platforms can help reach initial customers and grow beyond a local base.
Online purchases for business currently lag those of consumers, but market data indicates buying preferences are evolving.