Business-to-Business Web Transactions

The Web has proved to be an excellent transaction medium for business-to-business dealings. Some companies selling memory chips for computers, for example, have registered sales of several hundred million dollars per year. For a few, these transactions represent more than 85 percent of their total revenue. Their sales are to companies that buy computer components to install in units for sale or to upgrade their own equipment. This type of Web transaction will continue to grow in the years ahead.

How do customers find out about these transaction sites? About a third of them comes from advertisements placed in print magazines, a third comes from Web ads on technical sites, and the remainder comes from search engines. Many have established premier pages for their best customers. On these pages, their best customers have established accounts, so that their employees can order the units charged directly to their company accounts.

Business-to-business Web transactions continue to register success in a wide variety of fields. Why are they more successful than consumer Web sales? There are several reasons:

• The average order size of business transactions is much greater than the average consumer order size.

• The universe of business customers is much smaller. It is less expensive to reach them through direct mail or print or Web advertising than to reach average consumers.

• Premier pages work well here. They don’t work at all with consumers.

• Business customers have a continuing and predictable need for most of the business products sold through the Web. Consumer purchases cannot be predicted as easily.

• Business-to-business transactions on the Web are conducted during the day, when buyers and sellers are in their offices working at their company PCs. Consumers, on the other hand, if they are employed, have to do their Web shopping after they get home at night. There are competing demands on their time. It is more fun to go to the mall with their families or to watch television. That is why about 80 percent of all sales on the Web are business to business.