Supply Chain Overview

The B2B supply chain describes how products flow from origin (manufacturer) through intermediaries (distributors) to the end business customer. Understanding this chain is foundational to understanding why B2B eCommerce is complex and why the relationships at each level are so important.

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The Basic Chain

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Typical flow example (electrical distribution):

  1. Cooper Industries (manufacturer) makes circuit breakers
  2. Sells truckload quantities to Rexel (national distributor) at negotiated pricing
  3. Rexel stocks products in regional DCs and local branches
  4. Sells to an electrical contractor (business customer) at contract pricing
  5. Electrical contractor uses products in commercial construction
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Key Chain Participants

Participant

Role

Manufacturer/Brand

Produces the product; sets MSRP; manages dealer/distributor relationships

Master Distributor

Buys from manufacturer; sells to other (smaller) distributors; rarely to end customers

Regional Distributor

Serves a geographic region; may have multiple branches

Local Distributor

Single or few locations; deep local relationships

End Business Customer

The buyer who uses the product in their business (contractor, facility manager, etc.)

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Why Each Link Matters for eCommerce

Manufacturer → Distributor (B2B):

  • Manufacturers increasingly sell direct to distributors via eCommerce or EDI
  • Content challenge: manufacturers need to provide rich product data to distributors for their eCommerce sites
  • PIM systems often manage this content syndication

Distributor → Business Customer (B2B):

  • This is the primary B2B eCommerce market
  • Customer-specific pricing, account-based access, ERP integration
  • The Digital Branch model serves this relationship

Distributor → Distributor (coopetition):

  • Happens when a distributor can’t fulfill a customer’s order from their own inventory
  • One distributor temporarily buys from another to fulfill
  • See coopetition
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The Distributor’s Value in the Chain

Distributors exist because they provide value that manufacturers and customers can’t replicate efficiently:

  • Manufacturers can’t afford to stock inventory in 500 locations near every contractor
  • Customers can’t manage relationships with 200 different manufacturers
  • Distributors aggregate both — providing local availability and a single vendor relationship

Digital threats to the distributor:

  • Manufacturers selling direct via eCommerce (disintermediation)
  • Large platforms like Amazon Business aggregating purchasing
  • Industrial marketplaces commoditizing products

The distributor’s defense: relationships, local knowledge, credit, technical expertise, and speed of local fulfillment — things digital-only players can’t easily replicate.