Most business-to-business Web sites are established for a dual purpose — to both sell products and services, either directly or indirectly (98 percent), and to provide information (73 percent), according to a report by ActivMedia Research.
ActivMedia’s report “Real Numbers Behind ‘Net Profits 2000” found the primary means to stimulate a sale for 77 percent of b-to-b Web sites is to stimulate offline contact. Most b-to-b sites also provide pre-sale support and purchasing information (62 percent) and generate leads for staff to follow-up (60 percent) as ways to make a sale through the site, while only 44 percent accept orders via the Web. According to the report, b-to-b Web sites grow through successfully building relationships that utilize the interactive communications power offered through online presence. Among the uses of b-to-b sites:
- 33 percent of b-to-b sites market, but do not sell, products online
- 25 percent of b-to-b sites offer professional services
- 15 percent actually sell products at the site to business end-users
In 2000, just over half of all Web businesses market to consumers, while a third market to businesses. The other third is made up of portals and infrastructure, such as ISPs, ASPs, and designers.
“Markets are increasingly global. Two in five online companies attribute greater geographic presence to the Internet, and all acknowledge its power to impact total company sales,” said Harry Wolhandler, VP of Market Research at ActivMedia. “A similar two in five also rely on the Net for business management support to knit together far-flung operations and collaborative partnerships. This is particularly important in b-to-b settings where the Internet is often more useful for internal and external coordination than for sales revenue generation. The additional organizational capacity derived from instantaneous global communication flattens organizational structures and speeds up real-time decision making and information flow. The results show up in profitability across the organization rather than profitability due to Internet presence, a measure not picked up in many studies.”
While nearly half the Web sites in North America and the Asia-Pacific region cater to consumers, only 25 percent of European sites and one in three in other regions do. Half of the European Web sites are b-to-b, as are just over one-third of North American sites, 25 percent in Asia-Pacific,and nearly one-in-three in other parts of the world.
ActivMedia’s research also found b-to-b firms that are online veterans are less likely to have seen a experienced a downturn in business that many b-to-b firms have seen because they got on the Net early in the business cycle. Yet, b-to-b firms have been relatively slow to adopt the Internet because they are often much larger firms than those in other segments.
With sales and revenue not being a top priority of most b-to-b sites, it comes as little surprise that only 32 percent are currently profitable, with another third expecting to be profitable someday. The likelihood that a Web business will become profitable, however, increases dramatically with experience. Only 10 percent of those online one year or less are profitable, while nearly half online for three years or longer are profitable.
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