Subscription B2B ecommerce

Been thinking about the B2B ecommerce space, especially in the FMCG supplies space. Think — Udaan, Storeking, Metro Cash n Carry etc.

Been talking to the merchants and hearing folks in the B2B commerce space to understand the space and challenges. I feel that there is an opportunity to create a B2B subscription model thats anchored on daily purchase items to create a long term relation and an entry hook with the merchant.

Idea: Create a daily subscription model anchored on Milk, bread, eggs, dairy, bakery etc. Milkbasket for retailers.

Why this can be a good hook

Daily interaction → High trust and engagement — ability to visit merchant daily and delivering the goods will help create high trust relations with the merchant. Today most of the B2B retail solutions suffer from low engagement and often rely on weekly agent visit to collect orders. Daily visit which is actually generating revenue can be a good driver to introduce more products and services to the merchants and collect orders at the same time.

Higher app engagement — Today merchants send their milk and dairy requirement almost daily to the vendors. Giving them an app or Whatsapp channel to send next day’s requirement will possibly drive higher app engagement and perhaps lead to a lot more cross-sell.

Low credit requirement at start — Milk and dairy products are generally at cash and carry model or have short credit cycle (less than a week). This means credit which is often looked as a must-have may not be such a huge challenge at start. As order profile builds, extending credit becomes easier.

Benefits to the merchants

Generally there are 3 problems that occur in a wholesaler driven model

Price opacity — today merchants rely on friends and Whatsapp channels to find best pricing

Limited assortment — Wholesaler doesn’t carry all assortment from the manufacturer/brand. Thus merchant has to buy from what’s available, thereby limiting assortment access

Offer opacity — Distributers provide best deals to large retailers and wholesalers often consume offers/deals themselves.

Besides the above 3, some operational benefits will include

• Single vendor for all supplies as against one vendor each for eggs, dairy, bakery. multiple channels for order calls, bills, disputes
• Better experience — controlled dark warehouse based supply chain that can provide more predictable experience. Ability to change order till midnight or request additional deliveries during the day (at a cost)
• Inventory management — comes as we collect data, but predictive suggestion on how much to carry and what to carry

These are some early thoughts and i am sure there are plenty of gotchas here. Happy to learn and refine, do leave your comments/thoughts/questions.