Ecommerce businesses are often associated with selling directly to consumers—a model built on providing transparency, convenience, and personalization. But as online ordering becomes the norm across industries, more ecommerce companies are conducting or expanding into business-to-business (B2B) sales, too.
While B2B and business-to-consumer (B2C) models differ in many ways, customer expectations are comparable: In fact, 73% of B2B buyers expect the same effortless online retail experience they enjoy as consumers, with features like one-click ordering and real-time tracking. Meeting these expectations requires a tailored fulfillment process, so businesses can handle the complexities of bulk order processing, warehousing, inventory management, and shipping to other businesses with ease.
Learn more about the ins and outs of B2B fulfillment, including key differences from B2C fulfillment and best practices for streamlining your operations for the evolving world of ecommerce.
What is B2B fulfillment?
B2B fulfillment refers to the start-to-finish process of getting your products into the hands of other businesses. Your fulfillment strategy impacts every aspect of your supply chain, such as receiving, storing, managing, processing, and delivering orders. For example, a clothing importer might use B2B fulfillment to acquire and distribute goods to business clients such as wholesalers, distributors, and online and in-person retail stores.
B2B fulfillment vs. B2C fulfillment
Unlike B2C ecommerce fulfillment, which tends to be high-volume but fairly straightforward, B2B fulfillment may be lower volume but more complex, due to the size, price, and volume of goods. Here’s a breakdown of the key differences in the fulfillment process for B2B versus B2C ecommerce companies:
| B2B fulfillment | B2C fulfillment | |
| Order size and volume | B2B fulfillment often involves fewer but larger orders, since businesses make bulk orders of materials or goods. | B2C fulfillment involves shipping products to individual consumers, which typically leads to frequent small shipments. |
| Pricing | Shipping costs and operations can range widely depending on the size of the shipment, and upfront expenses are often higher. | Shipping costs to consumers are often lower and more consistent, since direct-to-consumer businesses typically standardize shipping prices for customers. |
| Complexity | With larger orders and comprehensive paperwork, B2B fulfillment involves complex logistics due to custom packaging, compliance, shipment sizes, and client requirements. | Order fulfillment is typically more straightforward for individual consumers due to small shipment sizes, standard packaging, and fewer industry regulations. |
| Lead times | Fulfilling orders can take days, weeks, or months as businesses negotiate terms and rates for shipments. | Businesses can often start to fulfill customer orders as soon as they are placed with fast or expedited shipping options. |
| Compliance | B2B fulfillment may be subject to more strenuous compliance regulations and paperwork, especially when shipping bulk orders. | Individual shipments sent directly to customers require less paperwork and regulations than bulk shipments. |
How B2B fulfillment works
These are the basic steps behind B2B fulfillment:
1. Inventory storage
Whether you manufacture your own products or source them from third parties, the first stage of B2B fulfillment is recording inventory and storing it in a secure, organized way. This often involves choosing one or more strategically placed warehouses and using warehouse logistics software to track inventory levels, storage layouts, and the flow of goods.
2. Order processing
The order processing stage involves receiving orders from clients, generating invoices, negotiating rates and terms, and finalizing contracts. The order management process can differ depending on a company’s systems and offerings, but it often involves multiple stakeholders, including warehouse staff, sales teams, lawyers, and accounting departments.
3. Picking and packing
The picking and packing stage refers to how products are retrieved from storage and prepared for shipment. Once the right items are picked for orders, they move to a station to be prepared for delivery. The packing phase may include custom packaging for different businesses, such as specific labels, in addition to general packaging like boxes, plastic wrap, packing tape, and shipping information. Bulk shipments may also use materials like shipping pallets, crates, and freight boxes.
At this stage, warehouse workers should confirm that outgoing shipments include all the necessary paperwork—including a commercial invoice, a packing slip containing details about the shipment, and a bill of lading document that outlines the agreement between the shipper and carrier during the transportation of goods.
4. Shipping
Shipping refers to transporting orders to customers using shipping carriers and courier services. You can handle this process in-house or outsource the task to fulfillment partners like third-party logistics (3PL) providers who handle fulfilling orders. Compare options for transportation providers based on shipping costs, time, and reliability—such as choosing between ground, sea, or air freight.
5. Delivery
After shipping orders, monitor the delivery process to make sure shipments arrive on time at the intended business address, so the customer can then receive, store, or resell the products to consumers. The deliveries might arrive at other warehouses, distribution or fulfillment centers, corporate offices, or brick-and-mortar stores, based on your agreement with the client.
6. Reverse logistics
Reverse logistics refers to managing shipment returns. Depending on a company’s return policy, clients may request a return after receiving incorrect orders or damaged items. To improve your odds of earning repeat business from clients, establish clear systems for processing returns or exchanges, facilitating the return shipment, and receiving returned goods. Depending on the reason for the return, businesses may repair the defective items, return functioning items into their inventory for future sale, or recycle materials into their manufacturing processes.
4 tips for streamlining B2B fulfillment
- Choose the right software to organize your fulfillment process
- Find reputable logistics partners
- Ensure EDI compliance
- Track your B2B fulfillment process with quantifiable metrics
Here are some best practices that can help you streamline your B2B fulfillment process:
Choose the right software to organize your fulfillment process
Software systems give B2B companies the tools they need to organize complicated fulfillment processes. Three of the most important software tools to consider investing in are shipping software, effective inventory management software, and warehouse management software.
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Shipping software helps you track and manage orders through the outbound shipping process. For example, merchants with a Shopify Plus account can access the built-in software tool Shopify Shipping. It offers a comprehensive suite of features for B2B companies, including pre-negotiated discounts from major shipping carriers, customization options for which shipping methods are offered to different customer segments, and the ability to create shipping labels.
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Inventory management software tracks the stock levels of products you have on hand and generates valuable insights about future demand based on historical sales data and industry trends. Many businesses use inventory management software and shipping software in tandem—with the former focused on managing your in-house inventory levels and the latter designed to monitor your shipping process.
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Warehouse management systems (WMS), on the other hand, help coordinate the warehousing, order processing, picking, packing, and shipping of wholesale orders. Using a WMS, you can gain real-time visibility into where each stock keeping unit (SKU) sits in your warehouse, minimize errors with the picking and packing process, and make more informed decisions about warehouse organization.
Find reputable logistics partners
Late or lost deliveries can cost you future business. If you use an in-house direct shipping model, work with reliable shipping carriers or courier services to transport your goods. Third-party logistics providers can also handle storing, picking, packing, and shipping your products in their fulfillment centers, which can save you the cost of developing your own in-house fulfillment infrastructure.
To select a fulfillment provider, look into their track record, client reviews, pricing structure, and how well their services fit your specific business needs. Shopify merchants can use the Shopify Fulfillment Network to connect with trusted third-party logistics providers (including Flexport, ShipBob, and GoBolt), and oversee outsourced B2B fulfillment operations directly from the Shopify admin dashboard.
Ensure EDI compliance
Electronic data interchange (EDI) refers to technology that automatically shares digital documents between business partners with specific EDI codes for different types of documents. Without EDI, every stakeholder along the supply chain has to process inventory separately, which can result in incorrect data entries, delayed shipments, and a frustrating customer experience.
Shopify merchants can connect EDI tools directly to Shopify’s built-in order management system to automatically share necessary B2B documents once an order is processed—increasing operational efficiency, reducing errors, and storing all of your B2B order data in one location for reference.
Track your B2B fulfillment process with quantifiable metrics
To enhance customer satisfaction, monitor your key performance indicators (KPIs) related to your B2B fulfillment process. Here are some relevant ones to keep an eye on:
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Supply chain cycle time. This measures how long it takes your business to deliver an order with no existing inventory. This factors in the time it takes to source raw materials and manufacture products. You can use this KPI to identify potential supply chain disruptions and evaluate strategies to speed up your sourcing process.
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Order fulfillment cycle time. This measures how long it takes customers to receive their purchases. Order fulfillment cycle time (OFCT) can help you manage customer expectations by offering a realistic time frame for deliveries.
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Perfect order rate. Also known as the perfect order index, this KPI measures your percentage of error-free orders. This provides you with a metric for how frequently your fulfillment process delivers your orders with no hiccups—from start to finish.
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Inventory turnover rate. Inventory turnover rate measures how often your inventory sells out over a specific time period, which can help inform your stock replenishment strategies.
B2B fulfillment FAQ
What is B2B fulfillment?
B2B fulfillment involves all of the systems used to handle, store, and ship materials or goods from one business to another.
What does B2B stand for?
B2B is short for “business-to-business,” which is an operating model where companies sell products or services to other businesses rather than directly to customers. Business-to-consumer models are known as B2C.
What’s the difference between wholesale and B2B?
B2B is a broad term for any type of business-to-business transaction. Wholesale is a type of B2B model where a company buys inventory in bulk and resells it to customers in marketplaces, online stores, or brick-and-mortar retail stores.
