What special considerations apply to B2B ecommerce and wholesale businesses?

Full Explanation

B2B marketplace (e.g., wholesale fashion) requires different unit economics than B2C ecommerce. Key differences: 1) Sales cycles: B2B buyer might take 3 months to evaluate, versus B2C impulse purchasing. 2) Deal size: average B2B transaction is £5K, B2C is £50. 3) Payment terms: B2B wholesalers expect 30-90 day payment terms, not immediate payment. 4) Volume: one B2B buyer might account for £100K annual volume. 5) Inventory: you must manage inventory to match demand (oversupply = cash tied up; undersupply = missed sales). Founder pitches often underestimate these complexities. Honest B2B disclosure: "Our B2B marketplace connects fashion retailers with wholesalers. Average order value is £10K with payment terms 60-day net. We earn 5% commission. Inventory risk is material: we hold £5M inventory to enable fast fulfillment. Working capital requirements: £2M to hold inventory inventory. Growth drivers: (1) onboarding new retailers (50 per month target), (2) increasing order frequency per retailer (currently 2x per month, target 5x). Cash conversion cycle: inventory turns 6x annually, but we must fund the gap between purchase and customer payment." This is honest because it acknowledges working capital constraints and inventory risk. Hiding these (claiming B2B is just like B2C scaling) signals naivety. B2B ecommerce has different unit economics and requires different capital models.

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