eCommerce brands looking to scale will consider ordering inventory in bulk or even sourcing directly from manufacturers.
Whenever you are sourcing from a business, it’s called a B2B transaction, or business to business. On the other hand, if you are buying inventory directly from manufacturers and reselling to retailers, you are on the other end of the B2B fulfillment process.
Today, we will take a close look at the B2B fulfillment process and how it works.
As explained, B2B fulfillment is the process of fulfilling bulk orders (generally) to other businesses. For instance, you can bulk fulfill orders to a retailer, who will then sell it to customers for profit (B2C).
Alternatively, you can source products from manufacturers who will fulfill the orders to you, which again is a B2B supply chain.
In either of these scenarios, B2B fulfillment is different from B2C fulfillment because it’s not a one-to-one transaction. It’s a process that needs to be managed and coordinated effectively.
B2B fulfillment entails large quantities of inventory, international barriers, customs rules, compliance, taxes, currency conversions and of course delivery. It’s a different beast altogether as compared to B2C fulfillment.
So, how does it actually work?
Large volumes of inventory or raw material are shipped – B2B order fulfillment involves shipping large quantities of inventory or raw material to the customer, who in this case is a business themselves. This is generally done through ocean freight, air or railway for cross-border deliveries. Many a time, it is pallets of single or mixed SKUS that are shipped. In some cases, businesses will rely on a mix of freight forwarding services and a CEP provider or Courier, Express and Parcel provider.
Distribution on-demand – Many B2B businesses redistribute the inventory to a chain of retailers. Sometimes, fulfillment entails shipping inventory to a central location, from where it is then redistributed. In such cases, it is often more efficient and cost-effective to use a 3PL provider that has a network of warehouses in strategic locations. Some B2B fulfillment may also be about redistributing the orders to their end customers directly.
Customs & compliance – B2B shipments are subject to the same customs regulations as B2C shipments, with a few additional considerations. When dealing with multiple countries, businesses need to take into account the various trade agreements, Embargo and Sanctions, Quotas that may be in place. It is important to have a clear understanding of the customs regulations for each country involved in the supply chain, as this can help avoid delays and additional costs.
Taxes – Businesses may be required to pay taxes on the import and export of goods, depending on the country or region. It is important to have a clear understanding of the tax laws for each country involved in the supply chain, as this can help avoid delays and additional costs. Some B2B fulfillment companies offer a tax-paid delivery model which can take care of all the tax paperwork for you.
Delivery – Delivery is one of the most important aspects of B2B fulfillment. The delivery process needs to be coordinated and managed effectively so that goods arrive at the correct destination on time. This is often done through a combination of freight forwarding services, CEP providers, and local delivery partners.
B2B fulfillment can be a complex process, but with the right planning and execution, it can be an efficient and cost-effective way to ship large quantities of goods. When done right, it can help businesses save time and money, while ensuring that goods are delivered safely and on time.