B2B & B2C Fulfillment – What is the Difference? 

Although ecommerce merchants and manufacturers for the most part have different target markets, there are certain expectations that both types of companies share. One such expectation is that of reliable order fulfillment by their 3PL (Third Party Logistics) provider. 

It would help to review the meaning of the two terms and fulfillment in general, before one can take a deep dive into the differences between B2C (Business to Consumer) Fulfillment and B2B (Business to Business) Fulfillment.

What is Fulfillment?

The question really should be what is order fulfillment? Order fulfillment, also known as order processing, is the supply chain process that involves all the steps needed to fill a customer order. A customer’s order triggers a response mechanism which then proceeds to an order request as notated in the inventory system. This sets in motion an order request at the warehouse where a worker locates the product, picks it, and packs it for shipping. The package is then shipped and delivered to the end-user. 

Why is Order Fulfillment Important?

Whether it’s B2B or B2C, the fulfillment process steps of a supply chain deal most directly with the customer except for say, a salesman or customer service representative. A customer who receives an order that is complete, correct, undamaged and on-time is usually a “happy camper”. A satisfied customer is more likely to order again and even refer the company or products to other purchasers.

So, the consequences of a poor order fulfillment system can be far reaching and

devasting to a company, particularly small to mid-sized businesses. This is why so many merchants and manufacturers now outsource this crucial step of the logistics supply chain to 3PL service providers.

A smooth-running order fulfillment center within a supply chain can:

• Boost repeat sales
• Enhance the brand reputation
• Increase customer satisfaction

What is B2C Fulfillment?    

Business to Consumer Fulfillment involves processing the orders of goods that are placed by individual customers, not companies. The scale of consumer orders is most often smaller than those of B2B orders, as companies will order in bulk if discounts and usage warrant it. Businesses also have larger storage areas than do consumers, which is another factor that allows companies to make high volume purchases.

B2C fulfillment is usually easier to accomplish because packaging is simpler. Pricing is easier, too, as bulk or dealer discounts are not involved.

The most problematic portion of B2C fullfillment can be the delivery process. B2C orders are usually delivered to a consumer’s residence. This involves less regulation than some B2B shipments, but many consumers now expect free shipping, or want expedited shipping. Merchants can offer free delivery and offset the shipping costs by requiring a minimum cart value threshold in order to qualify for free shipping. This also helps merchants to raise AOVs (Average Order Values).

But when it comes to expedited delivery, higher customer expectations have resulted in B2C logistics companies’ use of real-time order tracking and other technologies to ensure customer satisfaction. Many merchants offer not only Standard and Next Day delivery options, but Same Day Delivery as well. These B2C shipping choices, if completed reliably, can positively impact the customer experience.

The problem is the cost and reliability of the final portion of the delivery process, known as “the Last Mile Delivery, or Final Mile Delivery”. Challenges in this last step of the order fulfillment process flow chart make it the most time-consuming and expensive step, accounting for almost half of shipment costs. These challenges include traffic density, limited parking areas, driver shortages and other delivery problems.

What is B2B Fulfillment?

B2B or Business to Business fulfillment concentrates on the fulfillment of orders from companies rather than from consumers. The orders may occur between manufacturers or distributors and merchants, or manufacturers of components and OEM (Original Equipment Manufacturers) product manufacturers.

On the component side, manufacturers are often referred to as Tier 1 or Tier 2 suppliers (or even Tier 3). Tier 1 manufacturers create components for OEMs. Tier 2 companies supply components for Tier 1 component manufacturers, Tier 3 supply Tier 2’s, etc.

On the merchant side, orders usually involve a large number of SKUs (Stock Keeping Units) whether in single SKU pallets or mixed SKU pallets.

B2B order fulfillment is likely to be a more complex process than B2C fulfillment and rarely consists of a single unit. B2B logistics companies, or 3PL providers commonly deal with the international shipping protocols, customs rules, hazardous material regulations, and other cross border issues that bulk orders often entail. Large volume or bulk orders can necessitate the palletization of goods and frequently are shipped via freight.

JIT (Just-in-Time) deliveries and smaller scale orders are also becoming more common in many B2B orders now as demand-driven manufacturing is easier to implement.

Is There a Difference Between Logistics and Fulfillment?

B2B or B2C fulfillment is a part of the end-to-end logistics supply chain. 3PL logistics companies provide outsourced logistics services to merchants or businesses. Besides order fulfillment, 3PLs can implement warehousing and distribution services for their clients.

What is the Difference Between B2B and B2C Logistics?

One of the main differences between the two types of logistics fulfillment is that of scale. B2C orders consist of fewer SKUs, while B2B orders are generally for much larger quantities such as truckloads, LTLs (Less Than Truckloads), or for cross border deliveries, ocean freight, air or railway shipments.

Delivery time was once a determining factor between the two types of fulfillment, but as previously noted, consumer expectations of quick delivery has matched that of businesses.

Delivery complexity is still more of a factor of B2B orders, because of the tighter regulations that for the most part govern bulk shipments, especially international shipments.

What are B2B Fulfillment Best Practices?

Customer Service – is key to successful B2B fulfillment. Businesses require the same level of customer care and support as consumers. It is vital for companies or their 3PL providers to keep their manufacturing and retail clients well informed about their order status and to thus build strong business relationships. Real-time tracking and management of orders is essential in order to avoid production line stoppages and inventory shortages.

Inventory Tracking – B2B customers usually need daily order updates, as the staffing and planning of warehouse activities and production lines are dependent on the arrival of materiel.

Supply Chain Forecasting – this element of supply chain logistics is crucial in B2B fulfillment. A flexible supply chain requires accurate forecasts and today’s B2B supply chains must be flexible so that their customers get the product they need when they need it.

Warehouse Management – State-of-the-art B2B fulfillment centers call for clear inventory visibility and efficient storage options that are specific to a customer’s products.

Transportation Management – The determination of efficient shipping methods, such as LTL (Less Than Truckload) freight and Zone Skipping (sending shipments directly to businesses) can reduce shipping costs and eliminate delays.

Transit Damage Prevention – B2B fulfillment companies utilize special techniques that can help to ensure the order is safe and secure while in transit.

Effective Returns Management (Reverse Logistics System) – This is essential to both B2C and B2B fulfillment processes. The scale of B2B returns can make it a more challenging prospect.

Cutting Edge Technologies – The latest equipment and software systems can automate and integrate technologies that will streamline the B2B fulfillment process.

What are B2C Fulfillment Best Practices?

Personalization – Obviously the basics of B2B fulfillment best practices apply to B2C orders as well, but they differ in a few instances. One instance is Personalization. For consumer orders, personalization definitely increases customer satisfaction.

Delivery – Consumers don’t have set delivery hours, logistics staff or warehouse receiving areas, as most businesses do, to deal with any delivery issues, so a positive Last Mile delivery experience is important in maintaining customer satisfaction. Indeed, repeat business with consumers often relies on a great customer service.

Damage Prevention – Damaged goods is the most often cited reason for consumer returns. The prevention of damage in transit, particularly during the final mile phase of the logistics supply chain, will mean that a customer is not disappointed during the “unboxing” experience. Also, having to replace a damaged product from inventory unnecessarily reduces inventory and puts more stress on the reverse logistics portion of the supply chain.

Ensuring that packaging and packing materials are appropriate to the size, shape, and value of an article will help to keep products safe and secure, even with rough handling. And packing labels that note the fragile nature of an item let employees of last mile delivery services know which packages need special handling.

Order Accuracy – A complete, undamaged, and accurate order is important in both B2B and B2C fulfillment, but the redundancy of paperwork that surrounds a B2B order is more likely to prevent the shipping of an incorrect order unless special steps are taken.  B2C fulfillment companies have the technologies and trained personnel to avoid the picking and packing errors that result in customer dissatisfaction.

When Does a Company Know That It Needs to Outsource Its B2B or B2C Order Fulfillment?

• The existing supply chain is becoming too complicated – When current supply chain logistics systems are unable to handle changes in volume, materiel, workforce adjustments, shipping regulation changes, etc., then outsourcing becomes a consideration that could reduce costs and streamline the process.
• Shipping costs are rising – B2B and B2C 3PLs specialize in the reduction of shipping and delivery costs. They can suggest options to lower costs and improve transportation processes.
• The business is running out of inventory and fulfillment space – Rather than renting or leasing additional space (particularly when it cannot be adjacent or conveniently located near existing facilities) outsourcing is indicated.
• Current order fulfillment is no longer on-time or is inaccurate – This can be a result of a fast-growing client base or increase in orders from existing customers. Either way, the customer experience and brand reputation will be affected if allowed to continue.
• Employees are getting stressed by fulfillment tasks – When employees skilled in core duties are being assigned picking, packing, shipping and other fulfillment tasks on top of their regular duties, it can be stressful and a waste of their talents.

What Should a Business Look for in a 3PL Fulfillment Partner?

Whether the company is an eCommerce merchant or a manufacturing parts provider, it is vital that they consider the following factors when evaluating a B2B or B2C fulfillment company:

1. Experience – Look for 3PL providers with the depth of experience and know-how to accomplish transactions on a local or global scale.
2. Technologies – Consider fulfillment companies that utilize the latest and best equipment and technologies that are industry standards.

3. Reliability – Favor companies that have a proven track record and customer recommendations.
4. Economies of Scale & Worldwide Facilities – Look for 3PL companies with high-volume and global capabilities.Where to Start When Looking for a B2B or B2C Fulfillment Partner?

Start with a recognized leader in end-to-end global supply chain solutions – ModusLink.  If the meaning of B2B vs B2C logistics is something that you are already too busy to explore in detail, consider how we can give you the options you need to grow and scale your business. With an adaptive approach to eCommerce and manufacturing supply chain logistics, ModusLink uses integrated, omnichannel solutions to get what you need, where you need it, and at a price that will keep you competitive.

Contact ModusLink today for a private consultation with one of our knowledgeable agents.