B2B Online Business is a vastly different ballgame than a simple B2C Store. Perhaps the biggest difference is the factual and logical buying process of a business compared to the emotion-based buying process of a consumer. So, in order to cater to these buying behavioral traits, your B2B store needs to be adaptable to provide a complete and seamless solution to the B2B business process.
In B2B a Business/Company has an account within the portal and typically multiple contact persons associated with that organization will have access to the portal to continue their business operations (essentially a purchase cycle). So in a B2B Store, who requires the product and who pays for it are mostly two different employees of the same organization. So not necessarily the employee who is paying for the purchase will agree with the product, quantity, agreed price, etc. Therefore an Order Review and Approval is necessary to satisfy the needs of both users.
Let’s see how the Order Approval System can boost your online B2B Business.
To describe in detail, let’s continue through a business case:
1. ABC Pipes is selling different sizes of PVC Pipes. Its Customers are Builders and Large Construction Companies. This B2B Business mostly happens on Quarterly Credits, each of these Builders and Construction Companies has Quarterly Credit Limit which they can use while purchasing items. Once this Credit Limit is exhausted, they need to pay the excess amount.
2. ABC Pipes has an Online B2B Portal (might be on Magento/Orocommerce) where each of these customers has their accounts and accesses
3. XYZ Builder is a similar customer of ABC, they have their details within the Portal as follows:
- Company – XYZ Builder
- Address – 20/B Park Avenue, New York, 10018, USA
- Portal Access to Users – Thomas (Purchase Employee), Mark (Purchase Manager), Nancy (Financial Manager)
4. Within the B2B Portal of ABC Pipes, there is Role-Based Access available against each company’s Contact Persons, so Thomas, Mark and Nancy have slightly different operations to perform as per their roles within the portal.
5. Thomas is managing the daily Purchase Operations, he is aware that there are 3 ongoing projects and for which XYZ Builder requires 500 Pieces of 5” Pipes. He accesses the portal, selected 500 Pieces of 5” Pipes and created a Quotation with his preferred price.
6. ABC Pipes’s Back Office Employee reviews the Quotation set an intermediate price on that Quote which is acceptable to them and saved it.
7. Quotation Review and Negotiation can happen in 2-3 Cycles, but ultimately Thomas accepted a Quotation and converted that Quote into an Order. He uses the Credit Limit of 500,000 USD Per Quarter set against XYZ Builder to place the Order where the Order Value is 50,000 USD.
8. Mark (Purchase Manager) will be notified through an email to review this Order. Mark will now Login to the portal, review the Product, Quantity and Price. He finds it within an acceptable range so he approves the Order.
9. Once the order is approved by Mark (Purchase Manager), then only ABC Pipes will accept the Order within their Production and Sales Cycle for fulfillment.
10. Thomas (Purchase Employee) also places another Order of 2.5” Pipes of 5000 Pieces considering XYZ Builder’s upcoming Plumbing Fittings in 3 ongoing projects which will possibly be needed after 6 Months. Order Value becomes 600,000 USD exceeding the Credit Limit of XYZ.
11. Mark (Purchase Manager) receives an email to review and approve the Order. While reviewing Mark finds out that the Order exceeds the permissible Credit Limit by 1,50,000 USD which needs to be paid through Credit Card. He approves the Order.
12. Since the Order Value is more than 100,000 USD and it also requires a settlement of payment of 1,50,000 USD through Credit Card, so Nancy (Finance Manager) will receive an email to review and further approve & pay. Nancy will log in to the portal to review the Order, considering the Order Value and immediate payment required she will consult with Mark (Purchase Manager) and Thomas (Purchase Employee) before approving/disapproving the Order.
Order Approval Rules:
- Approver Level 1: Mark (Purchase Manager) has to approve Orders <=100,000 USD and not exceeding the Credit Limit. Order Status will be set approved and ABC Pipes will accept it. If an Order not meeting these conditions, then upon Mark’s approval this will go to next level approver
- Approver Level 2: Nancy (Finance Manager) has to approve Orders > 100,000 USD and/or if it exceeds Permissible Credit Limit, all Orders with these conditions will need the approval of Nancy and then only Order Status will be set approved and ABC Pipes will accept it.
Thus Order Approval system streamlines Business Operations of both ABC Pipes and XYZ Builders and provides below advantages to both B2B Seller and Buyer:
1. ABC Pipes receives Valid and Approved Orders only from its Buyers, helps them to transform their Production Cycle to be more efficient, eliminates the chances of Order Cancellation, eliminates the discrepancy in Payment Cycle.
2. XYZ Builder saves the valuable revenue by eliminating Overstocking/Understocking, close cooperation between Purchase and Finance where each party aware of their responsibilities, review, checks, and edits on Orders to continue their operation without any unnecessary delay and difficulty through Online Approval.
In this way, the Order Approval System can boost your online B2B Business.
Get started with your B2B eCommerce store and gain a competitive edge in the market!
