B2B for the SME

Your IT staff might only consist of your neighbour’s child who seems to know “everything about computers.” Being a supplier for Wal-Mart or similar corporations is impossible due to minimal margins, lack of the enormous IT investment, and nowhere near the capacity to supply such a demand. So where can small and medium-sized enterprises benefit from business-to-business e-commerce?

Purchasing Indirect Supplies

Indirect supplies, such as office furniture, pens, paper, and general office equipment, are often a first step for smaller businesses to implement B2B e-commerce. Many suppliers offer catalog-based websites for corporate purchases, and are similar to buying online from a B2C website. Corporate accounts can be established online, and organizations can save significant time and money on automating this purchasing process.

Purchasing Direct Materials

Direct materials are any products that go into the production of your goods or services for sale. Establishing a relationship with a vendor that supports e-procurement may reduce costs. Joining an e-marketplace and holding reverse auctions where your suppliers bid on your requirements can lead to a real reduction in the overall cost of manufacturing your product.

Selling Products or Services to New Vendors

Joining an e-marketplace can open up new opportunities to sell your products around the globe. While many private e-marketplaces are restricted to vendors of the particular organization running the exchange, public hubs can allow you to offer your services to all other participants. Hopefully the same e-marketplace where you make purchases can be the same place where you sell your wares, thus increasing your reputation as a valued member of the online community.

Leveraging Your Existing Web Presence

Perhaps you already have a business-to-consumer e-commerce website. Greater sophistication can be programmed into your online store to target business clientele. This often includes adding account registration and per-user price discounting, as well as possibly allowing for purchase orders as payment for corporate clients. You should keep in mind that this additional functionality is not trivial, and could require rebuilding your online store from the ground up at a significant cost.

Investing in Your Own E-Procurement Solution

If your business is a major consumer of various suppliers, perhaps it is you who can lead your whole supply chain into the world of e-procurement. This is not for the faint of heart, and will require considered financial investment. But, hey, if Wal-Mart could do it, why couldn’t you?

Before you start looking into the cost of implementing a full scale EDI-INT system, then expecting your small suppliers to spend significant sums with little or no benefit to them, stop and consider smaller-scale supply chain automation. Perhaps you only have a single supplier. You may communicate via email already, but how about seeing if your inventory databases and purchasing systems could more closely communicate without human interactions. Examine your purchasing process, and identify potentials for automation. With a manageable expenditure you could realize a significant return on investment.