As the online channel becomes more developed, there are options for producers and processors in food and beverage categories. Similar to any sales strategy, it is important to consider all of the options and find the best opportunity for success. Given the rapid growth of the channel, it is beneficial to search regularly for new options as they gain traction in the marketplace.
When selling online, your target market will impact the strategy you pursue. The first decision to make is whether you want to sell your products primarily to businesses or consumers. It is possible to pursue both markets and you would need to list your products in different places to ensure they are found by businesses and consumers.
Many B2B options have emerged. Often these transactions will be for higher volume orders and with a sophisticated buyer.
Options to consider when pursuing a B2B e-commerce approach
If you want to sell your products to businesses, you can pursue a B2B strategy. Within this channel these are options to consider:
- Selling consumer packaged goods online to wholesalers, distributors and retailers
- Selling food service products online to wholesalers, distributors and restaurants
- Selling ingredients online to processors
Selling consumer packaged goods online to wholesalers, distributors and retailers
If you want to sell your products to businesses, there are different marketplace websites to consider. Similar to pursuing a retail strategy, it is important to find the right fit with your products, the geography you want to sell into and the pricing that you need to charge.
If your customers are distributors, wholesalers and retailers, there are a number of marketplace sites where you can list your products for sale. These websites provide the opportunity for producers and processors to create company profiles and list products. The more products available on the website, the more enticing they are to the buyers; distributors, wholesalers and retailers. The following websites are examples where you can sell consumer packaged goods to distributors, wholesalers and retailers:
- BlueCart connects food service wholesalers to customers.
- Local Line
- Farms and Farmers Markets can connect with customers on Local Line.
- A global trading network for manufacturers in many categories including food and beverage.
- Processors can sell to retailers, franchisees and restaurants on WeGoTrade.
The largest B2B marketplace website in the world is Alibaba.com. This online selling platform was started in China in 1999 and has grown to become one of the largest online sellers of goods with 2020 revenues exceeding US$70 billion, according to their December 2020 quarterly earning results.
Some retailers encourage suppliers to list their products on specialized B2B sites. This provides them with an opportunity to understand which companies are interested in selling their products in their stores. They can investigate the products when it is convenient for them. For example, a number of large retailers such as Metro and Whole Foods Market encourage producers and processors to list their products on RangeMe.com.
If retail buyers are interested in the products, they will contact suppliers and arrange for samples to be delivered along with any other information they require. The home page for RangeMe.com states that more than 700,000 products are listed for buyers to review.
Selling food service products online to wholesalers, distributors and restaurants
If you are interested in selling food service products to distributors, wholesalers and restaurants the following websites are examples where you can list your products:
- ChefHero connects food service distributors to customers.
- Local Line
- Farms and Farmers Markets can connect with customers on Local Line.
- Access to over 1,000,000 potential customers in the U.S. food service industry.
- Saladplate provides a one-stop solution for brands in food, beverages and hospitality to connect with buyers across Asia.
Selling ingredients online to processors
If your strategy is to find customers to purchase your products as ingredients, the following websites are examples of this opportunity:
- Fieldcraft is an ingredient marketplace for food and beverage companies in North America.
- Ingredients Network
- Ingredients Network is an online directory of food ingredient suppliers and products. The site targets professional buyers of food ingredient products and services.
Selling on B2B marketplaces
Most B2B marketplaces will provide a profile of their buyers. This is important research to ensure the buyers on the website are a good match to the people you believe are most likely to buy your products. Once you have found the right B2B e-commerce marketplace(s) to reach your target market, there are a number of steps to follow to create awareness and generate sales:
- Develop your company profile
- Create your product listings
- Sell your products
Develop your company profile
Each website requires you to create your company profile. Your company profile is something buyers will focus on because they want to understand the capabilities of your business. They use this information to determine if they want to do business with you. Your products are what they are buying, but your business will get more focus in a B2B relationship. Often these transactions are conducted through email and video conference, so developing a company profile that builds confidence in your ability to execute can differentiate your offering from others. Some websites provide the opportunity to post photos of your production facility and even videos to help the buyer understand your capabilities.
Once you create your company profile you need to determine the level of participation you want to enlist for the website. Most B2B marketplaces offer free listings to companies for a limited number of products. This is to encourage participation and increase the likelihood of this being a destination for buyers. The free listings can get noticed and if your products are in demand, buyers will also search for them.
These websites do need to generate revenue to operate. They each have their own economic model. Some of them offer a premium listing for sellers where products can be promoted to buyers or the chances of being found will be increased by listing your product along with similar products. Other websites will offer e-commerce capabilities and will charge a percentage of the total transaction. Similar to selling in any channel, it is important to investigate all of the potential fees and benefits to find the best solution.
Create your product listings
After you determine the right level of participation for your business on each of the websites, the next step is to create your product listings. There are three components to a good product listing:
- Great product descriptions
- Clear photos from all angles
- Researched keywords so you are found in searches
Your product description is your opportunity to explain the benefits of your product. You can include any certifications (e.g., certified organic or certified gluten free), points of differentiation, special ingredients, unique production process or other reasons consumers would want your product.
Buyers look for good quality photos that illustrate your product. They expect the delivered product to look identical to these photos. Most often, product photos are on a white background with photos on all sides of the product included.
With most websites listing thousands of items, buyers will have to search for your products. To improve the possibility of buyers finding your products, proper keywords can be the difference. Consider what words your buyers will use to describe your products in their search. These are the words that can be entered first.
Some websites provide the opportunity for you to create an online storefront. This is a destination within the website where you can include branding, a listing of your products and a company profile. There can be extra fees to create the online storefront.
Sell to informed B2B buyers
When selling B2B, your customers will expect a quick response to their inquiries. Including the right contact information on the website and keeping it up-to-date is essential. Most websites provide the opportunity for you to include pricing information, case pack, volume discounts and other metrics your buyer will need. There are a number of common terms on B2B websites:
- Freight on Board (FOB) pricing is the price you are charging to a certain point in the distribution chain. For example, if you produce your products and ship them from a warehouse in Vancouver, B.C. you would list your price as FOB Vancouver.
- Minimum Order Quantity (MOQ) is the lowest number of products you will ship to the buyer at the price you state. Often this can be a full pallet of product(s). When you are selling B2B, your buyers expect to see larger quantities and in some cases a discount for them if they buy higher quantities.
- Request for Quote (RFQ) is a term used by sellers if they want to generate a price for the buyer. Often this can be used when there is some customization required or if there is a wide variation in quantities ordered.
- Request for Samples (RFS) can be an option for some products. Online sellers usually have a process in place to provide samples to prospective buyers for a fee that covers costs and shipping. These fees can be negotiable if there is the possibility of large orders and the seller is reasonably confident the sale could happen.
Once you have created your profiles and listed your products, you are in a position to start selling products. When selling B2B, your buyers will usually be informed and expect action. Within your business, the right process will ensure proper communication with online buyers to begin the sales process.
Payment for B2B orders can be through the website where your products are listed or direct between the two businesses. Regardless of the payment method, there should be a well documented transfer of ownership for the product and payment terms should be defined. It is possible in B2B transactions you are entering into a business relationship with a company you have not done business with before. Due diligence is important to ensure the best chance of a successful transaction and business relationship.
B2B transactions take longer than B2C because there is usually more money involved and there can be several decision makers from the various buyers and sellers. This is to be expected, especially in the initial transactions with other businesses. A lot of B2B transactions were conducted at trade shows. This is shifting to online platforms as buyers and sellers gain confidence in the opportunities and see more and more volume shifting to this channel.
Understanding Business-to-Business-to-Consumer (B2B2C) e-commerce and how your products will be sold to end consumers
As e-commerce evolves, retailers and other businesses delivering value are developing relationships with consumers. Bricks and mortar retailers want to maintain their sales to their existing consumers, so they are improving their online presence and platforms. Some consumers are also interested in having their food and beverage products selected in the store and delivered. There are different options for B2B2C in this sector:
- Your products sold on a retailer's e-commerce website
- Third party shopping service providers
Your products sold on a retailer's e-commerce website
If your products are sold on a retailer's e-commerce website your business is not directly involved in the transaction with the consumer, but there are opportunities for you to grow sales and improve your relationship with the retailer. Many food and beverage retailers have experienced growth in the e-commerce segment of their business. Usually, if your products are listed in the store they will be available on the retailer's website. Some retailers have adopted the "click and collect" model where consumers order online, an employee in the store selects the items and the consumer drives to the store to collect the order. Other retailers such as Sobeys have invested in a dedicated distribution network to fulfill and deliver online orders.
For all of the items you have listed with a retailer you can check their website to confirm your items are in the correct department, include the correct photos and are priced right. In the past, you might have been checking stores; now you can include retailers' e-commerce sites as well.
Once you know your items are in the correct department, check to ensure they are available in any ads, themes, special promotions or specialty areas of the site. Most of what you see on e-commerce sites is system driven and retailers might not notice if one Stock Keeping Unit (SKU) is missing. When they see a hole on a store shelf, an "out of stock" is visible and usually will result in someone ordering the product. The listing of items in other areas of the website such as ads or themes is dependent on information in the retailer's system. For example, if your product is lactose free, you know many consumers will search this specialty section looking for your item, you should check regularly to ensure it is there.
Managing a listing base with many thousands of items is a challenge and now retailers need to do it in store and online. You can set up a process within your business to check photos, prices and descriptions regularly to ensure your items are correct. It is your customer's job to present the items properly, but if you want to maximize your sales it is always good to review these websites.
Any time you find an issue with an item or the links, share this with the retailer. Most retailers' websites include a section for the weekly flyer and other promotions. Consumers are likely to review this section and click on items from the flyer for their cart. If the link does not work, which does happen, they are not likely to search and the sale is lost.
If you do find issues with a retailer's website, approach it from the point of view you are both losing sales. Often you will have to work with a different part of the retailer's organization who can impact the online display. It is beneficial when you communicate directly with the person who can change the product listing information to ensure you are in, for example, the lactose free section or to update your product photo.
Your products sold through third-party e-commerce shopping service providers
There is one other method how your products can be purchased online - through third party shopping providers. Companies such as Inabuggy and Instacart have relationships with retailers where consumers order products and they are delivered to their house. You are not involved directly in the transaction but your items will only be purchased if they are available through the third party shopper's platform.
Third party shoppers have an established relationship with a retailer to access their item and price data. When consumers log into the third party shopper's platform they have access to order products from a number of different retailers. Once the order is complete and they select a delivery time, third party shoppers visit the stores and select the items for delivery. Consumers pay a fee for the shopping and delivery service, over and above the prices for the products. Often these third party shoppers offer services to a number of retailers, including food and beverage. Food and beverage are important to their business model because they are higher volume and more frequent purchases.
It is beneficial to review these websites for your products for the same reasons you are reviewing your retailers' websites. Most of these platforms rely on data from the retailer so if there is an issue with an item or a photo they will not always know a change needs to be made. If consumers cannot find your products, they will move on to an alternative. If you find a pricing error with one of your products on a third party's website, you will probably have the best results if you start with the retailer where there is an issue. They are supplying the data so you will have the best chance at a resolution when you contact the appropriate person to rectify the issue.
There are many different ways your products can be sold to customers and consumers online. Regardless of the B2B or B2B2C channel, they are most effective when you have great listings, keywords and photos. It is also important to check to make sure these listings, photos and keywords are in place and do their job to help sell your food and beverage products.
Summary snapshot: Business-to-Business (B2B) e-commerce for food and beverages
Options to consider when pursuing a B2B e-commerce approach
- There are online marketplaces for selling consumer packaged goods to retailers and distributors
- There are online marketplaces for selling food service products to restaurants and distributors
- There are online marketplaces for selling ingredients to processors
Selling on B2B marketplaces
- Create a company profile that will build confidence in buyers
- Develop product listings with the right keywords, good descriptions and quality photos
- Your online storefront can be a destination
- When selling to B2B buyers the right terminology will build confidence
- Payment terms should be clear
- B2B transactions can take longer
- Transactions are shifting from trade shows to B2B marketplaces
Understanding B2B2C e-commerce and how your products will be sold to end consumers
- Your products can be sold on a retailer's website to their consumers
- Third party shopping service providers can select and deliver your products to consumers
- Check to ensure your items are listed and priced correctly on retailer's websites
- If you are participating in any special themes or sections of the store check the same theme or section of retailer's websites for your products
- If there are discrepancies, communicate directly with the person at the retailer who can solve the problem
- Third party shopping services receive their data from retailers
- If there are discrepancies on the third-party shopping website, communicate directly with the person at the retailer who can solve the problem
- Regular review of retailer's and third-party shopping service websites is similar to visiting stores to check out your products