Selling to businesses is quite different from selling to customers. While a lot of blog posts and articles share e-commerce advice for businesses that sell to customers, the challenges of selling to businesses are not always tackled.
The B2B Equation
Businesses that sell their products to other businesses are known are B2B companies, and businesses that sell to consumers are known as B2C companies.
When pricing for customers you have to analyze market demand, find out how much customers would be willing to pay based on brand value, check the competition, work out your costs, think about taxes and shipping charges.
In B2B, the purchasing process is complex. The price of your products may vary per customer. Large orders might warrant lower prices. Partners might negotiate special payment terms based on order frequency, a long-standing relationship, or lifetime benefit.
As a B2B business owner, you have to implement the right strategies and systems to support such transactions and payments.
Dynamic Pricing for Wholesalers
Pricing your products is critical for the success of any business. When it comes to wholesale business, pricing can affect not only affect profits but business relationships as well. With dynamic pricing, you can set different prices for certain buyers, a group of buyers, or based on your membership levels. You can offer specialized pricing per product or product categories.
Wholesalers, nowadays, are moving towards dynamic prices as it offers several advantages. You can:
#1 Curate products
The great part about being able to price products differently is that you can use this in your favor when picking or manufacturing products. You can analyze demand, work on stocking products of different categories and adjust your pricing to gain the maximum revenue.
#2 Set prices by the buyer type
As a wholesaler, you work with different buyers. You deal with manufacturers, distributors, foreign importers, drop shippers. Each of these businesses has different buying capacities and profit margins. By being able to adjust your pricing for different buyers, you can secure better prices and favorable payment terms.
#3 Explore new marketing avenues
Trade shows, marketplaces, trade publications, or online avenues are great platforms to showcase your products. But if they aren’t avenues you’ve tried out before, you might worry about going on them with a rigid pricing structure. Having the flexibility to work with personalized pricing means you can explore new marketing opportunities while minimizing losses.
#4 Negotiate pricing
When it comes to establishing contracts with vendors, you need to take into account shipping costs, payment terms, credit margin, shipping frequency, and fulfillment duration, among other things. By being able to set prices dynamically, you can negotiate costs and close difficult contracts.
#5 Build long-term business partnerships
Most important of all, being able to set different prices per buyer help you make the buyer feel special and build solid partnerships that can give you recurring business.
Setting and Managing Dynamic Prices on WooCommerce
Managing different prices for different retailers can be a major problem for wholesalers. They need an equally competent system to handle different pricing rules.
Ideally, a B2B or wholesale e-commerce system should support bulk pricing, bulk quantity discounts, quantity based pricing rules, vendor-specific pricing, among other features. Such features can help them automate purchases and avoid manual errors.
Although WooCommerce allows prices to be set per product, dynamic pricing based on quantity, product, or category is not inherently supported. B2B business owners using WooCommerce need a dynamic pricing extension to manage their pricing rules.
A dynamic pricing extension can make it easy to:
#1 Attract Buyers with Bulk Quantity Discounts
Wholesale buyers want a good deal when making a purchase. Given that they are looking to purchase a higher quantity of products, they want the price of each product to be negotiated to a lower value. Quite understandable. While buyers would expect larger discounts on higher orders, there isn’t one rule that suits all. You’d have to consider past orders, shipping location, repeat orders, and your history with the client to decide on a discount.
Ideally, the discount percentage or rate would depend on the buyer. The more the buyers difficult it is for you to maintain discount percentages manually. A dynamic pricing plugin helps maintain and manage bulk quantity discounts by allowing pricing rules to be set per vendor and purchase quantity. You could advertise these discounts to attract more buyers.
#2 Reduce Losses with Different Prices Per Category
As a wholesaler, you deal with products belonging to different categories. And you know that not every category of products is high in demand. The profit you make on certain categories might be affected by lowering the price of the product.
Hence, different categories of products need to be priced differently. With different prices or discounts per category, you can cater to different buyers and maintain revenue.
#3 Create Unlimited Pricing Rules with Per Product Pricing
With a dynamic pricing plugin, you have the flexibility to add personalized pricing per product. For each product, you can set a different price per customer. This helps when you want to extend special discounts only on certain products and not on all your goods.
#4 Highlight Savings with Regular Prices
If you want buyers to immediately notice the savings you’re offering, you can do so by displaying the sale or discount price alongside the regular price of the product. You’ll have noticed this on several e-commerce sites. The regular price is strikethrough and the discounted price is shown.
What this does is that it entices buyers to avail the discount by clearly showing the amounts saved. An ideal dynamic pricing plugin goes beyond the simple functionality that WooCommerce offers, and displays personalized discounts for your buyers.
#5 Control Product Purchases by Toggling Product & Price Visibility
A dynamic pricing plugin is not just used to set custom prices, but can also be used to control the product and price visibility. Leading dynamic pricing plugins for WooCommerce offer the option to show or hide a product to certain customers or show/hide product price through the plugin’s settings.
#6 Reduce Manual Errors by Setting Global Pricing Rules
While it may not be always feasible to add rules per product and per person, you can use the options to set global pricing rules that are applied when no special rule is set. This lets you manage pricing and discounts for new buyers.
#7 Make Users feel Special with Group Based Pricing
To make pricing rules easier to manage and to award special discounts to a group of users or a special user role, you can set pricing for roles or groups. Group-based pricing can help you manage prices for multiple buyers at once by adding them all to a group.
Optionally, you can set wholesale prices as percentage discounts for any role you create. This can be a great strategy if you have membership levels as user roles.
When setting up a B2B store online with WooCommerce, you’ll need the help of several plugins to let you effectively manage your wholesale business. When it comes to pricing, you need a dynamic pricing plugin to set bulk discounts, manage quantity discounts, set prices per category and a whole lot more.
Are there any specific pricing challenges that you’d like to tackle? What are the plugins you use on your wholesale store? The comments section is open for discussion.