Published: 5th June, 2023
Imagine the following:
You’re an E-Commerce Manager. Your main responsibilities are increasing B2B sales, improving retention, and understanding what makes your customers tick. Maybe your company specialises in construction equipment, electronics, or even eco-friendly packaging.
Overall you’ve been somewhat successful. But increasing those B2B sales is easier said than done. Pushing average order value over the line is an uphill battle. And if sales move offline…well, it’s a lost sale as far as you’re concerned.
Managing all of this on a daily basis can be a grind. Combine that with the limitations of trade credit and you’ve got one mean opponent on your hands.
There is, however, a better way to sell to businesses. In this article, we'll be taking a closer look at B2B Buy Now Pay Later and how it can be used to send those sales through the roof! Let's get into it.
Table of contents
B2B Buy Now Pay Later
There’s been a lot of hype around B2B Buy Now, Pay Later (BNPL) recently so we should start by clearly defining what it actually is. In short, B2B BNPL enables business buyers to defer payment or divide purchase costs over a certain period by providing the buyer with interest-free trade credit.
For the buyer, that translates to accessible payment terms, increased purchasing power, and improved cash flow. Not to be confused with traditional trade credit though, B2B BNPL really comes into its own when we start looking at the benefits for the seller.
The benefits of B2B BNPL
B2B BNPL solves many of the pain-points involved with offering trade credit. Simply put, it offers a way for sellers to offer trade credit in a much safer, simpler, and more sophisticated way.
What that means for the seller is:
- Upfront payments - the nature of BNPL B2B means that merchants are paid upfront for their invoices, often with help from financial institutions the B2B payment platforms work with. Any B2B payment platform worth its salt will also reconcile payments. That means saying goodbye to chasing late payments on a daily basis.
- No credit or fraud risk - Merchants operating with little fraud knowledge are often left exposed, sometimes with dire consequences. BNPL B2B removes that risk. B2B payment providers perform comprehensive credit and fraud checks then and there for an uninterrupted buying experience.
- Reduced admin time - With B2B BNPL, merchants can simplify operations across multiple departments and save time, making it super easy to stay organised and save multiple hours a week in manual work.
The advantages for E-Commerce Managers
That all sounds great but how does B2B BNPL help you sell more? Thankfully, there are numerous benefits for E-Commerce Managers too.
Increased business sales
If you’re a buyer and have to wait 3 days to get approved for credit, what are you going to do? Wait? That’s not ideal or even likely. Sadly, that means buyers will often try to find someone else who can get it done faster. Say goodbye to that sale.
Checkout friction is your enemy. You want a checkout experience that is smooth, fast, and gets the job done.
BNPL for B2B solutions on the other hand integrate instant ID-verification and credit checks there and then, removing those hurdles and pushing buyers over the finish line.
Take Two, for example. When a buyer purchases through Two, the ID-verification and credit checks can happen instantly* for straightforward B2B sales without the friction.
*Two may not provide the credit or fraud risk assessment depending on certain variables such as market or solution chosen.
Another way B2B BNPL helps to increase sales is by offering a higher acceptance rate. This is the rate a provider accepts sellers for credit. Many 3rd party credit checking companies run slow, outdated processes that may not look at the full picture.
B2B BNPL providers (at least the good ones) can comfortably offer an acceptance rate of around 90%. Simply put, the more customers you can offer payment terms to, the higher the sales.
Two’s unique operating model maximises order acceptance by using multiple credit underwriters to assess the same order, of which Two's proprietary credit engine is one of the possible underwriters.
To learn more about how Two does this, be sure to read our latest news about our Series A funding to fix B2B payments.
Increased average order value
Buyers who don’t use credit cards have to float their working capital by fronting their expenses to make purchases. And the companies who do use credit cards often run into card limits that prevent them from buying what they need.
But BNPL makes B2B purchases seamless. Buyers no longer need to chase down that one employee with a corporate card or expense business purchases on their personal account. This ultimately allows buyers to place larger orders without running into cash flow problems while increasing B2B sales.
Take Purple Planet Packaging, a Two user and happy customer!
Once they started using Two’s E-Commerce Checkout solution, they noticed their customers were placing larger orders. This led to a huge increase of 400% in average order value!
And it’s not just them. Givn, a gift card supplier for the local Norwegian market, saw an increase of 270% in average order value as well!
Increased conversions
Another huge benefit of B2B BNPL is increased conversion rates. Earlier, we mentioned some of the key benefits of B2B BNPL for buyers, and these all contribute to a higher conversion rate for you. Here’s how:
- Enhanced purchasing power: B2B BNPL empowers businesses by enabling them to place larger orders without the need for immediate upfront payments. This flexibility attracts more customers and expands their potential purchasing capacity.
- Simplified buying process: With B2B BNPL, businesses can streamline the payment process by eliminating the complexities of credit checks and approval procedures. This simplification reduces friction and allows customers to complete their purchases quickly and efficiently.
- Increased affordability: B2B BNPL offers businesses the advantage of affordability by allowing them to offer their customers the option to pay for purchases in installments. By spreading out the cost, businesses make their products or services more accessible to a wider range of customers, potentially leading to higher conversion rates.
With all that in mind, the advantages for sellers means they’re simply more likely to complete a purchase, increasing conversion rates for you in the process.
Two - B2B payment solutions for e-commerce
Two offers a range of B2B payment solutions to make it easier than ever to offer integrated trade credit directly at the checkout and boost B2B sales.
E-Commerce Checkout
With support for some of the most popular E-Commerce platforms like WooCommerce, Magento, and CraftCMS, Two’s E-Commerce Checkout gets you up and running straight away. Or you can integrate directly with our API.
Two’s E-Commerce Checkout allows you to offer a frictionless checkout experience for your customers to increase B2B sales and conversion rates. And with a 90% acceptance rate, you can say goodbye to turning customers away. In fact, this apple reseller was rejecting 52% of their potential B2B customers before using Two.
Trade Account
Onboarding customers in the traditional way is manual and time-consuming. The long it takes to get them up and running, the higher the chances they’ll abandon their basket and choose a competitor.
Two’s Trade Account provides you with a frictionless customer-onboarding experience, integrated right into your sign up flow. Customers simply fill in their details, apply for credit, and checkout in 30 seconds. In fact, Trade Account users see an 18x increase in customer retention and 11x more orders per buyer!
Plus, true one-click purchasing makes buying from you a walk in the park. With features like Grouped Invoices, your customers can receive a single invoice per purchase or grouped into weekly, fortnightly, or monthly invoices to drastically reduce admin!
Order Creator
Omnichannel selling has become increasingly popular in B2B. In fact, B2B customers now regularly use ten or more channels to interact with suppliers. But can your field sales or tele-sales team offer instant trade credit as easily as your e-commerce store?
Two’s Order Creator makes it simple to offer invoice purchases to all B2B customers, because sales don’t just happen in one place. Capture offline sales and get paid upfront by harnessing the total power of Two for all B2B sales.
Instalments
Selling B2B rental services or subscription plans can be tough. In fact, only 3.8% of SaaS businesses offer annual plans as a result. Other than creating needless cash flow problems, this means B2B sales suffer.
Let your customers split payments for purchases over 3 to 24 months with Instalments. Boost B2B sales for rental services, subscription plans, and big-ticket items to drastically improve cash flow and increase B2B sales. All while Two handles the admin.
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