By: Rieva Lesonsky
B2B business has evolved, particularly in the past decade, as millennials join the B2B workforce. This generation has brought a different, more global perspective and an understanding of how technology can make their companies more efficient, productive, and enable them to more easily increase their global reach.
This makes a lot of sense since we're talking about a US $23.9 trillion global B2B ecommerce opportunity — which is six times the size of the B2C ecommerce market.
But what do B2B companies themselves think? To find out, Alibaba.com surveyed the market and just released their Alibaba.com US Small and Medium Business (SMB) Confidence Survey.
One of the traits most successful entrepreneurs possess is positivity. The road to business success is filled with challenges to be solved, hurdles to be crossed, and obstacles to overcome. The best way to confront these — and keep going — is by being optimistic, knowing there's a way to get to the other side, to turn the "no" into a "yes."
The good news is the Alibaba.com US Small and Medium Business (SMB) Confidence Survey shows B2B businesses are feeling positive right now. In fact, 62% of those surveyed say the economy is gaining momentum and see a bright economic future ahead. Only 4% are worried about an economic downturn.
These B2B SMBs are also optimistic about their own futures, with 46% predicting their online businesses will grow. They're expecting a healthy growth spurt, with 27% anticipating a volume increase of at least 25%. Even more expect revenue growth (72%) and increased procurement budgets (60%).
The result of all this anticipated growth is company expansion. Many (57%) of the SMBs hired new staff to support their online buying and selling activities. And of the 46% of companies that are expecting online growth this year, an overwhelming 80% plan to add at least one employee as a result.
B2B SMBs go global
Only 1% of US businesses work across borders. But B2B SMBs are more aggressively pursuing global ventures with 59% of those surveyed already conducting some cross-border trade. And of the SMBs surveyed, global trade makes up an average of 17% of their current businesses.
Not surprisingly, the three regions of the world that dominate B2B global trade for the US SMBs are Canada and Mexico (45%), Europe (21%), and China, Japan, and Korea (17%).
Why go global? It's smart business. The SMBs surveyed started engaging in cross-border trade activities to attract more customers and increase their pool of potential suppliers (50%), boost revenue (47%), and increase their profit margins (41%).
The digital revolution
Today's B2B SMBs understand you can't get ahead in our globally-connected world without adopting and embracing new technologies, which have made it easier and quicker than ever to do business with other businesses all over the world.
The businesses in the Alibaba.com US Small and Medium Business (SMB) Confidence Survey understand this with 90% of US-based SMBs selling or sourcing online to some extent. However, there's room for improvement and growth. While 54% of the SMBs surveyed know that working with ecommerce platforms such as Alibaba.com can have a significant impact on their businesses, they're still mainly conducting their online business via email and website order forms.
Benefits of selling and sourcing online
There are numerous advantages to both selling and sourcing online. Some of the benefits sellers attribute to selling online include:
- Reaching more customers (59%)
- Finding customers more quickly (47%)
- Achieving higher profit margins (38%)
Buyers say sourcing online enables them to:
- Find suppliers more quickly (53%)
- Reduce the need for travel (saving them a lot of money) (44%)
- Have greater purchasing power (38%)
- Achieve higher profit margins (38%)
What it all means
This survey is good news for America's entrepreneurs and the US and global economies. As John Caplan, President of North America and Europe B2B at Alibaba.com says, "Strong SMB confidence among American business owners and entrepreneurs, plus the growth from digitizing their businesses and doing business globally means the future is bright for US SMBs." Highlighting future opportunities Caplan adds, "Less than one-third of the businesses we surveyed have been doing business online for more than five years. That means there is an enormous opportunity for US SMBs to digitize and grow their businesses globally with ease."
When you look at the overall survey results you can see that for these B2B SMBs, the secret to success is about not doing business as usual. When you adopt digital strategies and engage in cross-border trade, you're 'rewarded' with an expanded customer and supplier network, more revenue, and higher profit margins.
What B2B SMB wouldn't want that?
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