The power of Magento B2B: A marketplace story
As B2B transactions increasingly shift to online platforms, Magento B2B ecommerce features have earned a strong reputation. Among these features, the payment options are particularly noteworthy. With the recent addition of Balance on Magento, B2B merchants now have a new and flexible way to manage their payments.
Our latest guide takes a closer look at Magento B2B ecommerce payments, and how features like a B2B checkout and embedded financing can bolster your ecommerce channel.
In this article, we’ll share highlights from our latest guide. We’ll explore how B2B merchants can benefit from using the Magento B2B ecommerce platform and the various options and tools available to them to maximize their reach.
We’ll also preview a real-life example of a marketplace that tackled B2B payments using Balance’s Magento integration to power the online chemical supply for its entire industry.
Setting the stage: Magento B2B ecommerce overview
In 2008, Roy Rubin and Yoav Kutner founded Magento, an open-source ecommerce platform. The company was acquired by eBay in 2011, and Magento became a division of eBay Inc. In 2015, eBay spun off Magento as a separate company, and the company went public in 2018. In 2018, Magento was acquired by Adobe.
Magento has always focused on providing ecommerce solutions for businesses of all sizes. The company offers both a cloud-based and on-premises version of its ecommerce platform, giving businesses the flexibility to choose the solution that best meets their needs.
In addition to its ecommerce platform, Magento also offers a range of complementary tools and services to help businesses succeed online. These include payment gateway integrations, marketing and SEO tools, and shipping and fulfillment solutions. Magento also offers a range of partner programs, which allow businesses to access the expertise and resources of third-party companies to help them build and grow their online stores.
In 2021, Magento launched Magento Commerce 2.4, which included a range of new features and enhancements designed specifically for B2B ecommerce. This, along with the Balance's integration, is enabling more B2B merchants to succeed in the ecommerce space.
But what does building and selling on the Magento B2B ecommerce platform truly look and feel like: What challenges arise? When? Is there success on the other side? What does success really look like? We’ll answer these questions and more in the following sections.
The hard truth of selling B2B online
Getting started with a new commerce channel or business model is complex. At the most basic level, merchants are up against a number of challenges, including navigating new technologies, high costs, change management as well as lack of expertise.
All of this amounts to what can be an overwhelming process. And when it comes to payments, the process isn’t any easier. Merchants must think about the following features when considering how to move B2B transactions online:
- A user-friendly and efficient online experience, similar to that of a B2C transaction
- An instant credit check that requires minimal information and utilizes machine learning technology
- Financing options that can reach hundreds of thousands of dollars per transaction through real-time application processes. Customers should have the option to pay with net terms ranging from 15, 30, 60, or 90 days
- The ability to pay invoices through various methods including credit card, debit card, ACH, wire transfer, or physical check
- Quick payouts to suppliers while managing financing risk, servicing, and collections
- Automated back-office capabilities such as invoice reconciliation and AP automation
Merchants who aim to address all of the above challenges have three choices: developing an in-house solution, accepting a disjointed payment infrastructure, or collaborating with a solution provider. However, it's evident that with the growing need for companies to go digital and cater to a growing number of digitally-savvy customers, doing nothing is not an option.
The benefit of customization for Magento B2B merchants
For B2B merchants, customization is a top-of-mind feature that they look for in an ecommerce platform. So much so that companies often face the "buy vs. build" decision when it comes to choosing a platform that meets their unique requirements.
Magento strikes a balance between the two options by providing a platform that enables merchants to build easily, without all of the overhead. Being an open-source platform, Magento allows developers to customize the code to create a unique and tailored solution for the customer. Moreover, with Magento's vast ecosystem of extensions and integrations, merchants can easily add new features and functionalities to their store without the need for extensive development work.
Ultimately, buying is faster and cheaper than building. If merchants aren’t careful, they can end up with a two-to-three-year project with a double-digit million dollar spend. Moreover, if there are deficiencies in the homegrown system, it will require additional staff and resources to bridge tech stack gaps.
This is especially true when it comes to payments. According to a PYMNTS report, the two most-cited hindrances businesses have in adopting digital B2B payments solutions are having a lack of human resources and tending to avoid risks.
If merchants partner with fintechs toward payments digitization, the time, resources, and risk can be greatly reduced.
This makes Magento an ideal choice for B2B merchants who are looking for a platform that is both customizable and scalable, while also being cost-effective and efficient. Furthermore, Magento merchants who leverage Balance can benefit from a customizable payment solution that enables them to provide the exact experience they want for their customers. With Balance, merchants can easily customize the look and feel of their checkout process, providing a seamless and intuitive experience for their B2B customers.
This level of customization can help increase conversion rates and improve the overall customer experience, ultimately driving revenue and growth for the merchant's business.
Case Study: How one marketplace doubled down on ecommerce growth
Leaning on technology providers and platforms can make all the difference and allow businesses to focus on their core competencies and strategies, rather than the technological hurdles. ChemDirect, an all-in-one chemical marketplace founded in 2018, built their store on the Magento B2B ecommerce platform.
The platform quickly became the backbone for ChemDirect's rapid growth. In 2022, ChemDirect saw significant growth in digital sales, tripling booked revenue and doubling active buyers compared to 2021. Further, they established a robust chemical logistics and payments network with $17M in monthly buying power and 99% of orders fulfilled within 3-7 days on average.
"The significant spike we’ve seen in online procurement across the chemical market shows a clear need for real-time transparency alongside search, financing and logistic capabilities — to capture new high-margin opportunities without upfront costs or operational headaches," says Dave Haase, President of ChemDirect.
Ready to learn how they did it? Download the full guide here to get the story.