A few weeks ago, on my way to the office, I heard the surprising news that pallets are running out in Germany. “The market for used pallets is virtually swept clean,” a radio announcer proclaimed. What may sound like a joke at first is the bitter truth – and is becoming a serious problem for some companies in this country. The economy, and export in particular, is booming, so there are enough orders. But what good is a great order situation, if logistics put a spoke in your wheels and you end up sitting on the goods?
For many entrepreneurs, bottlenecks like these are associated with risks. In the short term, the relationship with the distributor suffers; in the long term, their business may even be at stake. If their product is absent from the shelves for a prolonged period, consumers may opt for a competitor’s products that they can get in-store or online. Confidence in the brand decreases as much as customer loyalty – and all simply because the economy is experiencing an unexpected boom. How absurd.
However, the risk of losing consumers can easily be eliminated: rather than relying on distributors and transporting products across the country on pallets, companies can simply supply directly to their customers. A nice side effect is that the margins previously achieved by the intermediary distributor will now be included in the company’s own balance sheet.
And then there is the customer data, which was previously left to the distributor, but will be in company hands after a switch from B2B business into the B2C market. This not only allows a targeted customer approach, but much more effective marketing management as well.
Of course, a B2C business also faces challenges, which companies should not underestimate – anything else would be surprising, when they now have thousands of end users instead of a few retailers as customers. Incidentally, this has an immediate effect on distribution. Goods are no longer despatched on large pallets a few times a week, businesses now have to deliver their products directly to consumers. But as soon as the automated process is set up and running, this challenge will quickly be forgotten.
The complex financial processes behind the business may cause another headache. Thousands of customers mean thousands of invoices – and that quickly entails a slew of tasks. Accounting payments received, arranging reminders or collection all require time and human resources which many companies, especially start-ups and SMEs, don’t have.
Therefore, most companies switching from B2B to B2C need a helping hand to process the accounting and payments – and that’s exactly the helping hand we can lend. With Aqount, businesses no longer have to worry about linking different payment methods, debtor management or debt collection, so they can focus on their core business – the product experience and customer service that should always be the focus of a successful online shop.
Find out which strategies a B2B retailer can apply when entering the B2C market and which five points should absolutely be observed, in our interview with e-commerce expert Stefan Mrozek.
Director Operations | Arvato Financial Solutions