Why is it important to offer flexible payment terms as a B2B marketplace?
September 5, 2022
Buyers are more likely to purchase from suppliers when they offer flexible payment options. Use this to scale your marketplace.
What does 'flexible payment options' mean?
B2B e-commerce is a competitive space. So how can you ensure that your marketplace attracts and retains buyers and sellers? A good start would be offering your customers flexible payment terms – 82% of UK B2B buyers say that they’re more likely to buy online from a business if they offer flexible payment options.
Flexible payment terms allow buyers to purchase a product or service and pay for it over time. It’s a type of on-the-spot financing – once your customers get to the checkout they can choose the option to pay later.
One way to offer flexible payment that’s growing in popularity is buy now, pay later (also known as BNPL). With this model, buyers can choose to pay later, while sellers receive money right away. If you’d like to understand BNPL better check out our blog on the topic.
Before taking on any new additions to your platform you should understand the purpose and possible benefits. This is why we wanted to explore why and how flexible payment terms can benefit your B2B marketplace.
It’s expected in wholesale
Trade credit has been an expected feature of B2B transactions for decades. In the offline world 30 or 60 day payment terms are the norm and many buyers expect to be able to negotiate more favourable terms. The offline world of B2B has typically been based on cultivating long-lasting relationships where this kind of negotiation is normal.
With the wholesale world further embracing e-commerce since the pandemic, businesses still want the same flexibility online as they do offline. In fact, in recent years there’s been a shift in expectations. Businesses want trade credit to act a lot more like buy now, pay later – “real time, digital, fast, easy”. If you can offer it online, you’re getting ahead of your competitors. Whereas failing to provide this service can be seen as impractical and turn away possible customers from your platform.
Keep your customers happy and loyal
Stabilising cash flow is crucial to scaling any business. By offering flexible terms you will be able to empower customers using your platform. In turn, creating stronger relationships and building loyalty.
Relationships are pivotal (yes we sound like a broken record, but it’s very important)! Research by Sana Commercial found that 84% of buyers said they would buy from a vendor they have a good relationship with – even if they could find better terms elsewhere. That is incredibly powerful! To see growth, focus on building trust and good relations with both sides of your marketplace. The key to unlocking this growth online is figuring out how to replicate and strengthen relationships with your customers.
Stabilising your buyers’ cash flow, providing a seamless experience and replicating offline mechanics will ensure a good experience for them. And one of the most effective ways of removing friction in business sales is to offer financing options at the point of sale i.e. at checkout.
Gain a competitive edge
Wholesale has been a traditionally offline space and the current move towards e-commerce comes with its own challenges. 89% of companies in the UK and US find buying online more complicated than offline. Anything you can do to simplify the process will help you stand out and gain market share.
But the market is catching on quickly – already a third of the top B2B marketplaces offer some kind of new payment option, either via financing or trade credit. Flexible payment terms will soon become the new normal for B2B buyers. Customers are choosing early adopters, resulting in fast growth for those platforms.
Our advice? Introduce flexible payment options and do it quick. Become a pioneer in the space, rather than playing the catch up game.
A neat summary
At Kriya we’re taking away friction from finance – partly by helping to introduce more flexibility in payment terms to B2B marketplaces.
Our CEO and Co-Founder, Anil Stocker, recently moderated a panel to discuss common experiences of B2B marketplace leaders. Check out a short clip from the event where he perfectly summarises why flexible payment terms are important and how they’ll help empower your customers.
If you’re convinced that offering flexible payment terms is a must, act now! Get in touch with our team today. And for more insights on the B2B eCommerce space follow our LinkedIn page.
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