How Drop Shipping Works for B2B Ecommerce

CommerceHub

In case you missed it: digital transformation is now mission-critical in the world of commerce. While B2C retailers and brands definitely have a head start using drop ship (the shipment of goods from a manufacturer or wholesaler directly to a customer on behalf of the seller that took the order), B2B businesses are starting to catch on to the competitive edge that comes from implementing a strategic drop-ship program.

Today’s B2B buyer has expectations for a consumer-like experience. In fact, 1 in 3 B2B buyers purchase half of their products online. The success of digital businesses of B2B companies like Grainger, Fastenal, MSC, Watsco, Medline, Cardinal Health, illumina, Johnstone Supply, and many others prove that making it easy to order online is critical to achieving growth and increasing customer satisfaction. For many of these B2B companies, they’re leveraging drop ship to make digital channels a success.

Three major benefits of drop ship for B2B:

  1. Strategic assortment expansion opportunity. Drop shipping allows B2B firms to offer broader inventory and selection, eliminating customers’ need to look elsewhere as new supply requirements emerge. Expanding product assortment through drop shipping enhances loyalty and drives incremental revenues.
  2. Save millions in capital costs. By adopting drop shipping, B2B sellers effectively create an extended network of suppliers, which enables them to quickly adjust as market conditions and demands change. This reduces both the risks that come with the inability to physically stock adequate inventory to meet customer needs or being caught with overstocks when demand drops.
  3. Manage inventory risk. Working with more suppliers also offers the potential of broadly distributed inventory, placing products closer to the delivery destination. With multiple suppliers on tap via the drop-ship model, distributors are ready for spikes in volume, while keeping the customer experience intact. This is all done without the risk of inventory ownership and the associated capital outlays and operating expenses.

For more about the benefits of drop shipping for B2B, check out this BECK Ecommerce infographic: How Drop Shipping Works for B2B Ecommerce.


About the Author
CommerceHub

CommerceHub

CommerceHub is a leading ecommerce enablement platform connecting supply, demand and delivery that helps retailers and brands increase sales by expanding product assortments, promoting products on the channels that perform, and enabling rapid, on-time customer delivery. CommerceHub helps its robust network of thousands of retailers, brands, and distributors achieve over $30 billion in Gross Merchandise Value annually.