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Business to Business (B2B) Ecommerce can be defined as the buying and selling of goods and services between companies (wholesalers, distributors or any other) online. B2B companies are of two types - Vertical and Horizontal. Vertical companies work within an industry and usually make their money through advertising or from ecommerce web host fees. Horizontal companies are a completely different class and operate at different levels across numerous verticals.

Let us now understand how B2B ecommerce can help your business save and make money.

a) Reduced purchasing cost: Remodeling the way you purchase raw goods is one of the easiest ways to cut costs. The process of locating goods needed and then filling out the necessary paperwork is very labor intensive. According to the National Association of Purchasing Managers, the average manual purchase order costs a company around $79. But if the same is done online, it takes much less time and money and also streamlines the ordering procedure. If your business involves complex and repetitive sourcing processes, like the automotive components industry, then automating the activity is absolutely essential. Apart from generating the savings we talked about earlier, it reduces errors and facilitates data management.

b) Increased market efficiency: B2B ecommerce will help your company get price quotes from numerous suppliers easily and quickly. Also, growing competition among buyers and sellers in the electronic marketplace has served to drive down prices. B2B ecommerce has helped create the most open market environment ever. For example, eBay has created an efficient and transparent market for everything, from consumer electronics spare parts to Barbie dolls!

c) Greater market intelligence: B2B ecommerce makes available invaluable market information such as demand, prices, supply and more at the click of a mouse, enabling faster and better decisions. Gone is the uncertainty of unknown markets, and the need to deploy a field force in every territory.

d) Decreased Inventory Levels: B2B ecommerce also enables better utilization of inventory and raw material. It allows firms to use less working capital to turn out the same output, freeing funds to be invested elsewhere.