Sales and Fulfillment

Understanding the difference between B2B and B2C supply chain fulfilment

While B2B and B2C supply chain fulfilment share the same goals, the size of the order, delivery specifics, cost, and challenges differ significantly.

How you fulfil the order reflects the reputation of your brand, and working with a Third-Party Logistics (3PL) supplier can help you navigate the complexities of the two scenarios. Between procurement, assembly, storage, delivery, payments, returns, and customer service, if one hoop within a chain breaks, it may lead to significant financial and reputational damage.

This article covers the key differences between B2B and B2C supply chain fulfilment and their key challenges.

Key differences between B2B and B2C supply chain fulfilment

We can differentiate between B2B and B2C orders based on three broad parameters, namely pre-purchase, purchase, and post-purchase:

Pre-purchase

• Building relationships: B2B business is based on building personal relationships where the supplier customises products or services according to the client’s specific needs. This may require setting up supply chains that can meet the time, speed, and volume committed.

In B2C business, order placement and fulfilment are quick with minimal or no customisation.

• Scope of negotiation: B2B business is a long, drawn-out process that takes several months with a higher scope for negotiating the price, product configuration and quality, and terms of service delivery. This may require upgrades in the existing supply chains.

Your existing supply chains can easily and quickly fulfil B2C orders with no need for customisation. There is low to no scope for negotiation. However, companies usually run seasonal promotions to maintain loyalty.

• Product price: B2B pricing depends on the specific needs of the client and may be 30-50% lower than the retail price. It can vary depending on the size of the order, payment terms, recurring volume, and duration of the contract. The B2C price is set up front and remains the same for every buyer.

Larger volumes and the need for price optimisation may affect the supply chain in B2B businesses.

• Inventory management: In B2B orders, one can predict the demand because the client places an order several weeks in advance. As a result, you do not need a dynamic inventory management and prediction system.

In B2C businesses, the demand can change rapidly, and you need AI and analytics technology to predict it and replenish the inventory, impacting the way supply chains are designed.

• Revenue per customer: B2B transactions are bulk orders, whereas B2C are smaller transactions. Due to this, B2B business can stretch up to millions of dollars per order whereas B2C is limited to a few hundred. On the other hand, B2B orders may have lower frequency compared to their B2C counterparts.


• Sales assistance: There is often much higher coordination and communication between parties in a B2B order. It may need a dedicated customer service team. However, a B2C order is quick and without any interaction with a sales representative.

Purchase

• Buying/sales process: The B2B sales process includes quotes, approvals, and negotiation and is significantly longer. Negotiators may need newer supply chains, negotiate bulk rates, and maintain an ongoing partnership with the supplier. B2C buyers can explore a few places and buy from wherever they like.
• Order size: B2B shipments are large-scale but fewer in frequency. B2C orders may be more significant in volume but small in scale. Product stocking and ordering varies as per the nature of the order.
• Payments: B2B orders have a set payment schedule agreed within the contract whereas B2C ones use a one-time payment through cash-on-delivery or credit card. This impacts the way you pay your suppliers and, thus, the supply chains.
• Packaging complexities: B2B clients have specific packaging requirements that the supplier must adhere to. This may include labelling, branding, packaging material, coding, etc. There are no such mandates in B2C orders. This may impact the agreement with the downstream supplier and lead time.

Post-purchase

• Order fulfilment: B2B shipping may take longer, be expensive, and require sophisticated technology to track inventory. You may also need heavy machinery to load and unload crates/pallets. B2C orders also require technology for tracking, but their delivery cycle is quick and costs less, and you can also consider including free shipping.
• Customer service: Customer relations are essential in both B2B and B2C businesses, but the way you manage them is different. In a B2C business, you can depend on digital communication for relationship building and service. However, in B2B, you may need more personal interaction.
• Item returns: B2C orders have a clear return policy that is quick and easy to execute. In B2B orders, due to the volume, returns and order cancellations can become complex and expensive.

How can Infosys BPM help with order fulfilment?

Infosys BPM offers a Supply Chain Visibility (SCV) solution that introduces standardisation, optimises operations, identifies trends, and utilises investments efficiently. The SCV solution also incorporates a dashboard that facilitates end-to-end visibility and enhances root-cause analysis, proactive and collaborative decision-making, and resolution tracking.

Read about the B2C and B2B order fulfilment at Infosys BPM.