How to Start a Successful B2B Online Business: Interview With an Expert

How to Start a Successful B2B Online Business: Interview With an Expert

Kill your ego on day 1, when you decide to be an entrepreneur. This is just one of the great tips from the interview with our client Ohad Strikowsky - CEO of SuperFoods Co - Israeli trading company, that specializes in big retail stores products.

Together with Ohad we are working on a great product - B2B marketplace platform that will allow suppliers and distributors to buy straight from the source, rather than traders and importers.

In this interview, he shares specifics of the B2B food industry and useful tips on how entrepreneurs can compete in the crowded B2B market.

1. Ohad, thank you for accepting our interview request. First of all, tell us about your company. How long are you on the market, who is your target audience and how do you bring value to them?

My company has been established in the market since 2006. Our target audience is the food retail chain (retail supermarket and grocery store chains). Usually, they have to invest a lot of money in a field outside of their “comfort zone” such as marketing activities for selling products. The value we bring to them is a very big discount to manage complicated import procedures.

2. What, in your opinion, are the biggest challenges in modern B2B food industry?

The biggest challenge in the B2B industry is online food sale for the supermarkets. The fact is that it is very hard and expensive to implement changes in this kind of organizations (such as Metro, Spar, Auchan, Tesco, etc.) In addition, companies like Amazon that started selling food (they bought Wholefoods chain and established the Amazon Go stores) sell the products with a small fraction of expenses, compared to the traditional supermarket chains.

3. How can the companies overcome these challenges?
  • Huge investment in Technologies: sale platforms, automated warehouses, better CRM and ERP software, friendlier UX/ UI web and phone apps, social networks for promotions.
  • Minimizing waste on the Value chain: automated processes and consulting companies usually track money waste and improve the organization strategies and its structure in order to be adapted to the most current market changes.

4. What are the requirements of modern B2B customers? What do they expect from manufacturers and distributors?

Be accurate and react as fast as possible. Retail chains are billionaires, so their structure and methods of work are a result of many years of huge investments.

Most importers, distributors and mediators fade away as the years go by because they don't know how to withstand the demands of a chain that becomes more and more automatic in its structure.

In order to succeed in the B2B food industry, a company has to imagine what the chain would need in 10 years and prepare itself for it NOW. The reason is that competing in “real time” or at the present time with the chain progress for an importer or distributor is impossible due to the funds that the chain has.

Bonus read: How to create B2B wholesale marketplace: features and business model

5. Why have you decided to build your own platform? What was the turning point that prompted you to do this?

Food trading platform for the B2B industry is a unique concept for big supermarket chains. I’ve started working on it since 2006 because of the higher demands from buyers and sellers. We’ve reached a point when it was impossible to work as we used to, so we had two variants here: grow bigger or give bad service to our clients.

6. What are the biggest risks in the food retail business? Are there any case studies or customer stories you can share?

The biggest problem people fall into is Ego.

Entrepreneurs should know their place and stay close to the ground. Working very hard for yourself doesn't pay lots of money and if you want to give services to professionals in the market, you have to know that you are in the underdog position in terms of payments, treatment from chain employees and managers. You have to accept that you are working as an underdog till you reach a point when you are not an underdog anymore.

Most entrepreneurs fall due to the fact that they want to change this situation before being entitled to (before they prove their efficiency). So instead of investing in learning and hard work they make financial mistakes while trying to impress the chain employees and pretend to be somebody else. Working with your existing funds and taking moderate risks is the most important thing in order to reach your goals. It will take more time, but the journey is challenging and fascinating :)

7. According to B2BecNews research, 60% of US manufacturers don't have an e-commerce site for customer self-service. Ohad, how do you think, what are the obstacles that prevent wholesalers (manufacturers) from starting their own B2B e-commerce platform?

Manufacturers are and continue to be experts in making products, producing them faster with better quality and fewer expenses. Manufacturers are not sellers. In order to sell better, they have to dedicate their resources to e-commerce sales, website updates, etc. When most entrepreneurs open a factory their main concerns and dedication of funds are for better production methods.

In my opinion, the main obstacles are:
  • 3rd-party software companies that do it better

E-commerce website requires development, debugging, version updates, customer service, implementation, API’s, etc. Most services are provided today by third-party software companies that are the API’s and provide EDI (Data interchange on 3rd-party platform)

  • Cost to build the website

A B2B website should provide specific portals for each customer or buyer with tailored features and details. When it comes to the complicated deals, there are many parameters that are better to deal with in CRM/ERP and would cost too much to implement in a software: e.g. API for shipments companies, API for Courier companies, opening portal to smaller suppliers which are involved in the project as graphic designers, QA freelancers, etc.

B2B entrepreneurs need to know and track each process in the workflow and direct a request or a solution to the right people. In order to do so, there is a need for a third party that will operate different APIs, receive data, process it, and then distribute to the right people and departments. That’s exactly what we aim for and we will hopefully be able to achieve it.

8. Ohad, what advice would you give to entrepreneurs that want to create online B2B marketplace?

Have patience and eliminate your ego. This is the most important piece of advice.

Entrepreneurs that want to work in a B2B marketplace ask to work with high volumes. This is the dream of all business people - to sell more. Since everyone wants to sell more it is hard to enter the B2B market and the entrepreneurs should have a really unique business that would generate a real value for this highly competitive niche.

I think that it's worth the time and money to invest in because once you are “accepted” to the B2B market, in 1 year you sell what most B2C entrepreneurs would sell in their whole career.

Investing the time is hard, especially in the tech business, where most entrepreneurs see themselves as artists. They have “invented” their ‘one-pager’ and a business plan and think it is enough to get funded and merged with big corporations. But in reality, if in two years things don’t go as planned, they get really disappointed. Their ego tells them to retire from the entrepreneurship business and to become employees. My advice, as written above, is - kill your ego on day 1 when you decide to become an entrepreneur.

9. How can they build a unique business model and attract both buyers and sellers?

The model that I suggest is a multi-level platform creation. As a new tech entrepreneur, you need to learn the business/field of interest extremely well (law and highly tech-wise), ahead of asking sellers and/or buyers for commision / retainer payments. The biggest asset of new entrepreneurs is their ability to give service in as many fields as possible. Establishing an interdisciplinary/horizontal business flow is a great way to achieve this.

I hope that you've picked up some useful tips that will become handy in your business. Being an entrepreneur is hard, but if you work for the result and put your clients in the first place, you become closer to success. If you have any thoughts on it, don't keep them in and leave a comment below!