Dose #90: Unlocking B2B Subscriptions

Matt here with your weekly Subscription Prescription 💊

This week’s dose is all about B2B subscriptions - what they are, what makes them more complicated, and how you can leverage them for your business. We cover a few different use cases and an example of a brand doing this well.

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For many brands, subscriptions are more than ‘subscribe and save’ - they are a business-to-business (B2B) offering. As more and more B2B companies migrate transactions online, subscriptions are increasingly necessary for optimal repeat purchase experiences.

This week’s dose is inspired by a recent appearance I made on Jason Greenwood’s podcast, one of the leaders in B2B commerce. It reminded me that for all of my content around D2C subscriptions, I’ve been lacking in content for B2B plays.

What Are B2B Subscriptions

During my time as Head of Growth at QPilot, approximately 30% of our customers had a B2B offering of some kind. These typically fall into one of these categories:

1. Supplies, materials, ingredients - think dried cranberries ordered by a cookie company, or a sprocket ordered by a toy maker

2. Replenishment - think cleaning supplies used by a warehouse each month or air filters for an air conditioning unit

3. B2B / B2C hybrids - think of someone that sells a product to both businesses, like a candle company selling online but also wholesale to retail distributors

Odds are that many of you reading fall into one of these categories. A great example for #3 is Saniderm. They sell tattoo recovery supplies, like bandages and lotions. You can buy them online at Amazon or their website or from a tattoo parlor that buys from Saniderm directly.

Saniderm leverages a B2B portal with a subscription option on its website for tattoo parlors to purchase from. This makes it easy for their customers (tattoo shops) to keep ordering on repeat. Managing these types of transactions is appealing for many reasons, including order processing and fulfillment automation.

What Makes B2B Subscriptions More Complicated

For many B2B brands selling online, however, this experience can get complicated. Older methods of transactions involve EDI, invoices, emails, phone calls, and spreadsheets. Some aren’t fit for buying online like you would on Amazon with one click checkout.

Furthermore, Shopify struggles with wholesale and user-based pricing. Many businesses have different discounts or pricing deals with different customers. Shopify struggles to manage the same SKU at different prices, while Magento and WooCommere excel at this.

An Example of B2B Purchasing Happening Online

The drive to get this right can be transformative when we consider the first and second use cases listed above. Consider this example:

A furniture company gets an order for ten new desks. As part of their assembly process, they have most parts in stock but need a special lacquer to finish the desks. They call three different suppliers, get price quotes and estimated delivery dates, and then ultimately have to pay a rush fee to get the lacquer on time.

Imagine that scenario with a typical online purchasing process. They can quickly check three different websites, see what’s in stock, see the price in the cart with the expected delivery date, and make the choice that’s best for them.

When you layer in repeat purchasing through subscriptions, that same furniture company can have a preset order in place with one supplier. That supplier gives them a discount and plans accordingly to have their stock on hand. Both parties benefit from the relationship, allowing them to save money.

A Rose By Any Other Name…

When we move away from the term subscription for B2B repeat purchases, and start calling them autoship or auto-replenishment, then the terms make sense for what we would imagine buying from business to business.

Autoship creates a relationship between buyer and supplier with more visibility and planning, lowering costs and improving timing for everyone.

Conclusion

Ultimately, if you are looking to create an online autoship experience for your business customers, consider what will be best for them. You can survey and use interviews to find this out, but different aspects will be important for different companies: timing, support, price/discounts, payment methods, net terms, etc.

Finding ways to lower friction in transaction costs and provide great insight upstream for suppliers will have a profound impact on your business. Think of B2B subscriptions as a way to improve relationships in a way that is beneficial to both parties.

That’s it for this week’s dose! Let me know if you have a B2B play you’re working on. Stay tuned for Dose #91 next Tuesday.

- Matt Holman 🩺

The Subscription Doc