Enterprise Buyers Find Suppliers, New Credit Options in B2B Chemicals Marketplace

For a glimpse into the potential that digital transformation holds for B2B commerce, you might not find a better example than the world of buying and selling industrial chemicals.

Multinationals get the strategic chemicals they need directly from the manufacturer — through a labor-intensive procurement function. Smaller companies want to buy in smaller batches to meet their specific needs with flexible financing options. Supply never quite matches up with demand, and suppliers and customers don’t have an easy way to connect.

It’s a market, like many others in the industrial sector, in need of marketplaces — and flexible financing options.

ChemDirect serves the buyers and sellers in this market with an online B2B marketplace for chemicals. On Dec. 14, the company announced the launch of a new payment platform for ChemDirect customers — which is called ChemPay — and a partnership agreement with Balance, a payments experience platform for B2B eCommerce.

“It fits both markets well, in just different ways,” ChemDirect CEO Tyler Ellison told Karen Webster.

Handling Larger, Industrial-Size Orders

As a result of this new payment platform and partnership, ChemDirect now offers users more than its previous choice of credit card or purchase order; it now provides financing capabilities as well as additional payment options such as wire, check and ACH.

“It’s really advantaged us in a couple of ways,” Ellison said. “Being the first B2B marketplace having a balance capability, or payment capabilities, helps bridge that adoption curve into traditional commercial terms, so it’s really opened up the aperture for our business to do larger industrial-size orders that aren’t point, click and buy.

“And international producers, a lot of whom require payment upfront or partial payment upfront, this gives us a lot of flexibility to work with foreign production as well,” Ellison said.

Layering in Services, Adding to Expansion Strategy

For manufacturers, the new financing options means they get paid in three days rather than 30, 45, 60 or 90. These suppliers can also access new markets enabled by this new option.

At the same time, buyers don’t have to change how they manage their cash because they are offered terms. This joins the other benefits of their using ChemDirect, including an enhanced user experience and competitive product fulfillment times, accessibility and selection.

“This will help,” Ellison said, speaking of the new financing and payment options. “The more automated we can become with their systems, the less friction they’ll have in using us.”

For both buyers and sellers, the online B2B marketplace transforms the chemical buying process by helping users avoid the long, complex sales cycles and delivery times that are commonly experienced with the traditional sourcing methods.

Transforming the Chemical Buying Process

The success of the platform has led to its use for larger, industrial-size orders that ChemDirect didn’t initially set out to handle.

“There’s no organized place for discovery, and that’s really what’s led us into the industrial market,” Ellison said. “People will say, ‘I see you have commodity X, but in a small quantity. Can we get four metric tons?’ So, if there’s a market need, we’ll create a way to digitize it and serve it.”

Looking ahead, ChemDirect plans to continue expanding the services it offers the buyers and sellers who use the platform.

“We’re just starting on the journey on the financing part,” Ellison said. “We’re going to layer in services like logistics, inventory services, and our payment strategy will mirror our expansion strategy.”