B2B Is Unique

If you want to succeed in B2B ecommerce, then your strategy needs to involve customization and versatility across all aspects of your business model. No two B2B customers want the same thing so you need to adapt to keep them happy. One place where this becomes a major issue is with pricing. You'll find that different B2B customers will expect specialized pricing based upon their total purchasing history. Having a smart pricing plan is the key to success. You need to adapt to customer buying habits, volumes and requirements. 

One effective way to keep your B2B customers buying is via custom pricing models. You apply different pricing based upon various purchasing criteria. Providing customized pricing shows your customers that you understand their needs and value their business. You're building a stronger personal relationship with your clients when you work with them on price. This approach allows you to accommodate the varied budgets and demands while encouraging repeat business.

Let’s explore different custom pricing strategies for your B2B store. 

What is B2B Custom Pricing?

When you’re running an ecommerce store, you will probably have a B2B segment that purchases items in bulk quantities. This segment typically expects a better negotiated wholesale price. This unique business relationship expects specialized pricing and benefits since the overall value is much greater than a typical B2C order. This type of relationship can also be beneficial for your bottom line. B2B commerce typically involves larger orders and recurring business. Providing price breaks is in your own business best interest.

Here’s where custom pricing makes a big difference. Instead of charging all your B2B customer the same price per unit, you adjust the price and offer discounts based upon their purchasing habits and needs. For example, the more they purchase, the less they pay per unit. Or you offer a 30% discount across the board. The obvious benefit to your store is moving more merchandise and making more money. Tailoring your prices to the needs of your B2B customers makes it more appealing for them to buy in bulk. That means more money, more quickly for your store. You can now invest in more marketing and products for your business.

How Does B2B and B2C Pricing Vary?

It may seem like the price of a product is the same for all scenarios, but this isn’t always the case when you’re dealing with B2B versus B2C customers. B2B orders often involve larger transactions and the hopes for recurring future sales. Therefore in a B2B model, it benefits you to negotiate prices to fit customer needs. 

Setting prices for a B2B or B2C audience lies in understanding the dynamics of each market. For example, B2B pricing revolves around building long-term relationships, while B2C focuses on more immediate needs.

In B2B transactions, your relationship with the customer doesn't end with a sale—it begins there. Volume discounts provide incentives for businesses to order more.

For your B2C customers it’s all about simplicity and transparency. Your B2C customers are often buying single units, so you need to provide the best possible price to stay competitive.

Custom B2B Pricing Strategies

When you implement a custom pricing model, you’re showing your B2B customers that you understand their needs. It’s a great way to build trust and loyalty. They are more likely to stick with you since you’re offering them a good deal. All customers want the best possible price. This is the same no matter where you're doing business. Offering customers a discount, is a great way to get them to buy. It’s a win-win scenario where you’re expanding your market reach while helping your customers save money. But what type of pricing strategy should you implement? Let's break down some effective strategies for your B2B store.

Global Discount

A basic global discount strategy involves applying a uniform discount across all your products. This strategy is straightforward and can be a highly attractive offer for most B2B customers. It’s simple to understand and everything is on sale. This straightforward approach can encourage more browsing and more buying. This is the most typical strategy you see.

Tiered Pricing

Tiered pricing works by establishing price brackets or tiers, with each tier offering a progressively better value for purchasing in larger quantities. Unlike a global discount, tiered pricing only applies the discount to units within or above a specific tier. For example, you might charge $100 per unit for 1-10 units, $95 for 11-20 units, and $90 for 21-30 units. These tiers encourage customers to purchase more to reach the next tier for a better unit price.

Penetration Pricing

Penetration pricing is when you provide a much lower price point compared to competitors. You can provide this exceptional pricing on certain items to help draw attention to the rest of your products. This approach is effective when you’re trying to establish yourself against competitors. The main goal is to attract customers away from competitors based on key discounts and then provide your greater catalog. The low price is designed to make the offer irresistible to new B2B customers thus encouraging them to switch to your store. Once a significant market share is captured, you can gradually increase prices.

Key Features and Benefits of Custom Pricing:

• Flexibility: Allows your store to cater to both small and large buyers efficiently, without alienating any segment.

• Incentivization: By offering better rates at higher volumes, businesses can motivate customers to increase their purchase size.

• Scalability: Support growth by accommodating different customer segments and adapting to market changes.

• Profitability: Offering discounts lets you maintain and improve profit margins through increased sales volumes.

• Customer Loyalty: B2B Customers are likely to return for the perceived value, enhancing lifetime value and loyalty.

The best strategy for B2B custom pricing involves a blend of understanding your customers’ needs, flexibility, and looking at the data. Start by really understanding your business customers and the challenges they face.