B2B Shipping: Everything You Need to Know About Delivering B2B Products

1. What is B2B shipping?
2. B2B Shipping vs. B2C Shipping: The Differences
3. What does B2B shipping cost?
4. How does B2B shipping work within and outside Germany?
5. What tools can be used for B2B shipping?
6. Simplify B2B shipping with shipping software

Shipping goods in the B2B sector is significantly more complicated than in B2C. On the one hand, there are larger packages, higher shipping costs with courier services, and longer delivery times. On the other hand, there are important regulations that you need to obey depending on the nature of your goods and the destination country. In this article, you will learn more about B2B shipping and how it works both within and outside of Germany.

What is B2B shipping?

In a B2B delivery, products are delivered from one company to another company or a retailer. It is usually about large orders of materials and parts, which leads to longer delivery times.

Accuracy and timeliness play a decisive role in B2B mail order. Any type of delay and mismanagement can harm the reputation of your B2B business and lead to penalties and losses from refunds. To prevent such problems, many B2B suppliers use product restrictions, SKU codes, package labels, and a special invoice structure. They also pay particular attention to existing international trade barriers such as taxes and subsidies.

B2B Shipping vs. B2C Shipping: The Differences

B2B and B2C shipping differ in the following points:

Sales Support

In the B2B sector, customer advisors often organize the delivery of goods. In the B2C sector, however, there is usually no or little sales support needed, as end consumers often purchase the product via an e-commerce platform.

Order size

B2B parcel shipping involves large, bulky items ordered multiple times a year. In contrast, B2C purchases are often delivered in lighter packages in individual transactions.

Payment Terms

The common payment methods between B2B and B2C are hardly different - check, credit card, transfer, and cash payment. The difference lies in when the goods are paid for. With B2C products, the amount is paid directly at the time of purchase. In the B2B sector, payments usually occur within an agreed period. This can, for example, be weeks before, during, or 30 days after delivery.

Order Processing and Shipping

Since B2B shipping involves larger shipments, longer shipping times and higher costs occur with the courier service. It may also be necessary to use equipment (for example, forklifts or loading ramps) to load and unload product pallets. In contrast, B2C shipping costs are lower due to lighter packages (sometimes even free). Moreover, the delivery takes place within the same week after the order, sometimes even on the same day.

Customer Relationships

Most B2B contracts involve large, recurring shipments. Therefore, it is important to look for reliable suppliers and maintain close relationships with them. In contrast, B2C customers do not depend on a close relationship with a supplier to buy their products. These buyers are motivated more by emotional advertising and price promotions.

Returns

B2B companies process large order quantities. Their contracts, therefore, describe obligations and procedures for returns and loss management. Third-party insurers may also be involved to minimize risks for all parties involved. In contrast, B2C returns are simpler and include clear policies.

What does B2B shipping cost?

B2B shipping costs depend on many factors, including:

• The size and weight of your B2B shipment

• The type of product, which may require special equipment for transport

• Packaging - do you want to pack your products yourself or should the courier service handle it?

• The distance the product needs to be transported

• Delivery duration

• Insurance - depending on the shipping method, different liability and insurance conditions apply

The majorcourier services like DHL, DPD, and Hermes offer special rates for business customers.

How does B2B shipping work within and outside Germany?

Whether you offer shipping within Germany or abroad, there's a simple rule: Both you and your customer must have a valid tax number or value-added tax identification number (VAT ID). This should be included in the invoice to avoid problems with tax authorities. Additionally, the value-added tax, depending on the legal requirements of each country, must be properly calculated.

B2B shipping outside of Germany.

If your international customers are based in the EU, you can take advantage of the reverse charge procedure (also known as the deduction procedure or reversal of the tax liability). The method has been used for almost 20 years to simplify trade between EU countries. Here, the buyers pay the value-added tax on the goods or services you delivered, not the other way around. So, you do not have to declare the tax on your invoice.

To be able to use the reverse charge procedure, your invoice must include your VAT ID as well as a clear reference to the reverse charge procedure, for example, 'Tax liability of the recipient of the service'. In addition, you must declare all sales or expenses that fall under the reverse charge procedure in your VAT return.

As these invoices belong to 'Deliveries and other services (tax-free sales)', they do not affect how much tax you pay. However, they are important for the tax authorities to ensure that your customers actually pay the VAT due in their country. You must also declare these sales in the 'Summary Report'. It breaks down all sales made in EU countries into individual items. It also contains the respective VAT IDs of your customers.

Remember: The reverse charge procedure does not apply if you are selling to an individual or if you are a small business owner. In this case, your services are not subject to VAT.

If your customers are based in a country that is not a member of the European Union, VAT is usually not levied. However, there are some rules that can apply depending on the country:

• UK: Although you as a seller are exempt from VAT collection from customers in the United Kingdom, your B2B customers may have to pay import VAT after shipping.

• Switzerland: Like the UK, Switzerland is not a member of the EU and is therefore considered a third country. For this reason, there is a trade and tax agreement between Switzerland and Germany. As a seller, you do not need to collect VAT from Swiss customers. However, your customers must report the sales transaction to the relevant authorities in Switzerland. Similarly, you need to report it in your regular VAT return.

• USA: If you deliver goods to a B2B company in the USA, the regulations may be somewhat complicated. This is because there are different tax rates and complex classifications of goods and services depending on the state. Before you make a deal with customers based in the USA, you should first talk to a tax advisor familiar with US tax laws.

B2B shipping within Germany

B2B sellers within Germany issue a gross invoice on which VAT is declared. The B2B buyer can then claim VAT through input tax deduction from the tax office. Just make sure that the VAT Identification number of the buyers is also stated in the invoice. This rule applies as long as your company has its headquarters in Germany and is selling there.

What tools can be used for B2B shipping?

Due to the complexity of B2B deliveries, most companies take advantage of shipping software or shipping systems. Unlike transport companies like DHL and DPD, these solutions help B2B companies manage all shipping-related processes and identify and resolve shipping problems. Some of their important features are:

• Choosing the transportation companies

• Printing shipping labels and information

• Batch processing

• Shipment tracking

• Returns & Refunds

• Loading control

In addition, with the aid of a shipping software, you can also easily integrate various parcel services into your shop system, ERP system, and inventory management software. Some of the best shipping software on the market includes:

• Shipcloud

• Sendcloud
• JTL
• Pickware
• Alaiko
• Hive
• plentysystems
• Beckmann Systemlogistik

Remember, not all tools offer the same features. There are all-in-one shipping software programs that allow you not only to manage shipping but also issue B2B invoices and organize your stocks.

⁠If you are still in search of ERP software, here are some popular ones for you:

• weclapp
• Xentral ERP
• 360ᵉ by e-velopment
• microtech büro+
• SAP S/4HANA Cloud, public edition
• DreamRobot
• Sage 100

• NEKOM

• Myfactory
  
  

Simplify B2B shipping with shipping software

If you are new to the B2B business, shipping your products is probably one of the most complex parts of your business. Depending on the type of goods and the destination country, certain regulations apply. To simplify and optimize B2B shipping, most companies, therefore, use shipping software. They give you an overview of the entire delivery process and enable you to integrate transport companies like DHL and DPD into your shop system. They also help you comply with various shipping regulations and estimate delivery costs. This not only saves your employees a lot of manual work. It also prevents errors that can delay the delivery of your goods. If you want to learn more about shipping systems and their features, OMR Reviews is the right place for you.