B2B Wholesale Technology Trend

Wholesale B2B - Market Projection

Wholesale B2B (Business to Business) refers to selling products to another business, wholesale. This market is huge and is increasing at an exponential rate. Shopify’s studies show that in the US in July 22 alone the B2B wholesale market (inline and online) reached about $700 B, which was an estimate 16.1% year over year (YOY) growth. Online (e-commerce) wholesale had a 15.2% YOY growth.

Per Forrester US B2B e-commerce will reach $3 T by 2027. They also say that “US B2B e-commerce, which will grow at a five-year compound annual growth rate (CAGR) of 10.7%, will also account for 24% of total US B2B sales by 2027 — compared to 16% in 2021”. The Future Of Commerce says that 83% of B2B buyers prefer e-comm.

What does all that mean for B2B Wholesale businesses, especially small/medium ones?

The good news is that B2B is continuing to grow significantly, and more and more wholesalers are moving to online selling and buying. E-commerce, which was already naturally growing by the technology progression, got an additional boost by the pandemic in the last 3 years. Many businesses were forced by the pandemic to adapt technology to survive during the ‘20 - ‘22 period. (Unrelated to B2B wholesale, this is the time-period that also saw services such as Instacart and DoorDash pick up significantly; just to indicate how technology is helping to improve efficiency and convenience)

With technology continuing to evolve rapidly, now is the time for the small/medium B2B wholesale business to get started with wholesale B2B e-commerce, if they haven’t already. If not, they will fall behind their competitors in the next 3 years.

How are the B2B Wholesalers positioned to do online sales in 2023?

Even though business to consumer (B2C) sales have gained a significant technology footprint in the last 5 – 10 years, wholesale B2B is yet to capitalize on the evolution of technology. This is clearly visible in the Forrester study that says only 16% of the wholesale B2B is done online, and probably a lions’ share of the 16% is from the bigger wholesalers which means that the small/medium wholesalers are further behind.

Historically the main reason for this has been the lack of time, money, energy and most importantly the necessity for technological advancement. On the B2C side the necessity was driven by companies such as Amazon and external factors like the pandemic. Now that the pandemic is behind us most small/medium wholesalers are working on catching up with the lost years and sales, which has put technology further behind on their priorities.

What are the risks in not investing in technology right away?

For a business the absolute worst place to be in is to realize that they are several years behind their competitors. How can anyone fall years behind overnight? The reality is that you didn’t see it coming for years as you were focused on running your business. A good example is how Amazon took the whole retail world by surprise. The rest of the world is still working on catching up.

That is the main risk in not investing in technology for B2B wholesalers.

The pace at which technology is evolving is almost impossible to keep up with. That doesn’t mean you should completely shy away from it. Wholesalers should at the very least have an understanding of where they stand in relation to the industry and their competitors in terms of technology. Ideally, they should have a technological vision for the next 5 years. Again, no one likes to be caught off-guard.