Building E-commerce for Commodities: Here’s What Suppliers Should Know
By Weston Stewart-Tennes, Chief Technology Officer, Mickey
E-commerce continues to be a major revenue driver in retail and online sales. By some estimates, the global e-commerce market is expected to total $6.3 trillion in 2023. And while there are many options for consumer products and services to utilize e-commerce channels to sell their goods, there’s been little to no options for large-order suppliers, wholesale producers, or commodity goods. It’s not surprising that large-order e-commerce has been slow to evolve, especially for commodity suppliers.
Mired in Outdated Methods
Traditionally, commodities relied on antiquated sales and marketing processes for an order to take place: brokers or middlemen found buyers for their suppliers, negotiated prices, placed orders, and arranged transportation and delivery. This process hasn’t changed much over the last few decades, yet increasingly these industries are relying on other forms of technology to run their businesses (HR software, payroll processing, project management tools, and so much more) so, why haven’t they leveraged the power of e-commerce to drive their sales?
Until now, e-commerce technology has been solely focused on direct-to-consumer (DTC) or business-to-consumer (B2C) sales. There are few companies navigating the specific needs of industries like forest products, building materials, metals, plastics, and rubber products, among others. These industries require very specific ordering processes – like multiple product variants and SKU listings, better payment terms and credit lines, various payment options with faster payouts, and unique shipping and logistics needs.
Take for example lumber. Lumber comes in a variety of products like SYP (southern yellow pine), SPF (spruce pine fir), OSB (oriented strand board), and more. Within these products are specific sizes, grades, and other attributes. Building a marketplace that can manage specific inventories like these along with providing frictionless payment options (like buy now, pay-over-time, or large credit terms), buyer/supplier negotiations, and streamlined shipping and delivery with real-time tracking, is exactly what companies like Mickey are offering wholesale and commodity B2B companies.
Making of a Marketplace
In early 2023, MaterialsXchange (MX), a lumber exchange and marketplace, launched its new e-commerce platform. The team at MX wanted to build on their foundation of making it easier and faster for lumber buyers to source all of their products in one place. On MX, lumber, and sawmills from North America can sell their products through the newly launched MaterialsXchange marketplace – while construction firms and builders can place bids on specific items or purchase their LBM directly. The ordering process is streamlined – making the entire transaction transparent by including any related taxes and take rates – without hidden fees.
This new type of marketplace is paving the way for other types of wholesale and commodity products to be bought and sold at the click of a button. And as a younger generation – many of whom identify as digital natives – step into leadership roles within their businesses, they’ll be looking to leverage technology in all aspects of their business – including e-commerce and online sales.
The Building Blocks of B2B
What does it take to build an e-commerce marketplace for large-order, wholesale, and commodity products? Here are three things to consider when deciding to leverage technology to bring suppliers and buyers together.
Commitment to Building
When brands are looking to bring on a SaaS provider, they need to ensure that the technology developer will be there to build and execute a seamless e-commerce platform. Your SaaS company should spend time understanding the specific needs of your industry and fully understand how a product goes from raw material to being delivered to your buyer. Once the SaaS provider understands your specific products and needs, they should work collaboratively to see that all aspects of your business are translated into an e-commerce operation that can be easily deployed onto your site. Equally important is ensuring that your SaaS partner offers around-the-clock support with fast, client response times and overall excellent customer relations.
One thing suppliers need to ensure when using a SaaS provider to implement an e-commerce marketplace for commodities is the stability of that platform. Every transaction counts, so if your buyers are having difficulty placing an order on the platform – and ultimately the transaction isn’t completed – that could mean losing a valuable customer as well as revenue. Your marketplace should run seamlessly, and when bugs do show up, your tech team should quickly address the issue and resolve it – without disruption to your business or sales flow.
When Mickey first launched, it was rooted in the forest products industry. We initially worked with timber companies looking to sell whole logs globally. We worked with logging companies to connect them with global buyers using our technology. We later developed an e-commerce operating system called ‘Mickey OS,’ which makes it easier for industries like forest products, and lumber, among others, to sell their products online. ‘Mickey OS’ was built for the specific needs of wholesale businesses and can easily be implemented into any commodity business. Today, ‘Mickey OS’ is powering MaterialsXchange and can support many other types of commodities or B2B businesses.
Sourcing your SaaS Team
Finding a SaaS provider that builds technology mimicking your current business workflow, will not only help your online business succeed, but it will also make it easier for your customers and buyers to transition to the new sales platform.
Bringing antiquated industries into the 21st century isn’t an overnight process. These businesses have held on to their traditional ordering processes for generations. However, as the world shifts to new technologies everywhere – it’s just as important that commodities and other large, wholesale order businesses update their outdated sales methods. Commodity suppliers should work with a SaaS team that’s experienced in the unique requirements for large order processes – and who can help bring their products online while enabling direct sales around the clock.
With a B2B marketplace, raw material suppliers, commodity companies, and other large order and wholesale businesses can realize new revenue streams through a direct order platform. Every industry benefits from using technology at some level and now is the time for them to leverage it for their sales efforts.