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How to Leverage Long Tail E-Commerce Strategies as a B2B Company

Topics: Finance

Are you losing B2B market share to competitors doing business online?  If your orders are declining, it may be due to more than your lack of eCommerce options. B2B leaders are using long tail eCommerce strategies, which enhance ROI by combining the power of innovative customer segmentation with fully online sales transactions. 

B2B eCommerce is in full growth mode. Last year, sales volume on B2B eCommerce sites and marketplaces increased nearly 18% to $1.63 trillion. The rate of B2B eCommerce also outpaced the growth of all U.S manufacturing and distribution sales. This article will increase your understanding of long tail eCommerce and how you can use this strategy to accelerate growth and transform your B2B buyer journey to bring customers closer to you.

Long Tail E-Commerce Infographic

What is a Long Tail eCommerce Strategy?

Long tail eCommerce enables you to turn smaller customers with lower-value transactions into a higher-producing revenue stream. The idea is to service the 80% of customers who generate only 20% of your sales more efficiently and profitably through an e-Commerce strategy. For your customers, long tail e-Commerce is like using an ATM (your e-Commerce platform) to manage business rather than going to a bank teller (your team). The self-service streamlined by your e-Commerce site or a marketplace creates a modern B2B buyer journey for your long tail customers and frees up time and resources for your organization to concentrate on serving your largest customers. 

Here’s an example of a long tail eCommerce strategy in action: For many years, a Fortune 500 electronic components manufacturer sold to approximately 200,000 buyers worldwide using traditional distribution channels to manage payment and credits. Recently, the company launched a long tail eCommerce site where its customers can easily and quickly place routine and repeat orders directly. Trade credit automation integrated with the eCommerce platform makes routine purchasing simple for its customers worldwide. They can still contact a sales representative when needed, and orders placed with sales reps are still handled in the ERP.  

In this case, the long tail eCommerce strategy has increased the profit margin and optimized growth. The manufacturer has seen a 5.6x increase in average order size through its eCommerce site and an average 800% year-over-year growth in order frequency. Because its site leverages an automated invoicing and credit program, the manufacturer can grow its business without increasing its A/R staff. 

Using a Long Tail Strategy to Benefit Suppliers 

A long tail eCommerce strategy allows you to efficiently and profitably sell both popular products in high volume and thousands of niche products at lower volumes. Your B2B business gains unique opportunities to grow by:

  • Increasing your customers’ lifetime value through increased order size and frequency, and cross-selling
  • Expanding into new small-segment markets that in the past were not profitable
  • Differentiating your brand in order to capture more market share

By integrating trade-credit automation through an API-first payment platform like Apruve, you create a simple purchasing experience for all your customers – the thousands that need your most popular products, and the hundreds of SMB buyers who need just a few.

How a Long Tail Strategy Influences the B2B Buyer Journey 

The common concern about eCommerce strategies for business owners and leaders is that their customers prefer to do business face-to-face. New research indicates this isn’t true: When given the option, 66% of B2B buyers choose digital or remote in-person interactions. This change in behavior isn’t surprising given B2B buyers’ changing expectations for a more B2C-like purchasing experience.

Long Tail E-Commerce Strategies Image

A long tail eCommerce strategy can help you create the kind of B2B buyer journey your customers are looking for - simple, efficient, and fast. In the digital business environment, a buyer journey that’s as strong or stronger than your offline experience gives your company greater control over customer capture and retention. 

How to Leverage Long Tail Strategy in a B2B Company 

You can implement a long tail eCommerce strategy in several ways that can improve customer engagement and drive business growth: 

  • Tailor your pricing models to your customer for greater profitability using receivables automation.
    • With the efficiency of eCommerce automation, you can set niche product pricing levels that are both profitable for you and appealing to your long tail customer segments.  
  • Target SMB buyers.
    • In many B2B companies, the long tail cohort is comprised mainly of SMB buyers. Use a long tail strategy to increase the size of this segment as well as AOV and purchase frequency without adding sales or A/R staff.   
  • Eliminate the middleman. 
    • As outlined above with the Fortune 500 manufacturer, you can leverage a long tail eCommerce strategy to reduce or eliminate your use of traditional distribution channels and start selling directly to hundreds or thousands of smaller B2B customers.

Grow your B2B Business with Long Tail eCommerce

Though the long tail concept has been in play for nearly 20 years, recent advances in digital have turned it into a powerful growth engine for B2B businesses. New business models that leverage long tail eCommerce strategies are disrupting B2B markets across industries.   

Wondering how your B2B company can make the transition? Apruve’s trade credit automation platform integrates seamlessly with eCommerce platforms to enable your long tail strategy. 

You can also get started with Apruve’s automated credit and payments using your existing phone-order system or ERP. In this case, your long tail customers can place their orders as they do now, take advantage of instant trade credit through Apruve and pay however they’d like - even with paper checks, all while having the option of being white-labeled. You’ll want to steer them towards a fully digitalized process, even though Apruve can accommodate multiple payment types.

Interested in flourishing market sales? Get in touch with Apruve today to discuss your long tail eCommerce options. Our specialists can help you evaluate your best long tail options and help you get eCommerce up and running. Click through Apruve’s website and use cases today. 

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Apruve enables large enterprises to automate long-tail credit and A/R so you can stop spending 80% of your time and resources on 20% of your revenue. We partner with each of our customers to solve their unique credit, payment, and accounts receivable challenges and build the right credit solutions for your markets, customers, and goals. 

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