Using third parties to distribute products has always been part of running a tour operation, although it might not always have been described as distribution. Operators have always sold through hotels, travel agents and destination marketing organisations. The Internet has made distribution easier and increased the volume of sales. So why work with a B2B reseller?
Firstly, what is a B2B reseller? These are companies with whom you have agreed to take your products and sell them to other travel businesses. These travel businesses will then sell your products to their customers. For example, HotelBeds will bring your activities to their network of accommodation providers, who will sell them to their guests. Commissions will be taken and need to be agreed upon. You can read more here about what a B2B reseller does.
Secondly, if you are a small or new operator, it is unlikely that you will need or want to work with a B2B reseller just yet. There are more important things on your plate, such as ensuring that your experiences are as good as possible and that your business is stable and beginning to grow. Increase your sales by starting your distribution through online travel agencies (OTA) and choosing a booking system that meets your needs. Once your operation grows and can handle more sales, you can begin to think about channel management and B2B sales.
Increase sales and market reach
Tour and activity operators want to connect to B2B resellers to increase their market reach, sales volume and profitability. B2B resellers will provide a sales network, the technology and the expertise to increase sales. They will take a commission, but this is comparable to that of an OTA. You may be able to negotiate this commission with the reseller, depending on your sales volume.
Connect to a B2B network
B2B sales involve many more stakeholders than direct-to-consumer ones. This is because these happen at an organisational level. You are not trying to persuade someone to take your trip but a company to sell many of your tours. If you were to sell your experiences through many different companies, there would be a lot of long negotiations to carry out. B2B resellers have already carried out this work.
B2B sales are significantly more targeted than B2C. The established B2B resellers will have spent years selling tours and experiences, and often other products, through their network. They will have developed relationships and trust with the companies who sell directly to consumers. This will include knowing the key stakeholders and often managing large investments.
A B2B reseller will focus on a particular segment of the market. Take the examples in this article: HotelBeds, Attraction World Group and Flight Centre. Each of these knows precisely what their particular customers want. Therefore, B2B resellers bring years of expertise to the table. They can advise on what is required to sell more products to their market.
It is this network and expertise that tour operators will want to tap into. Some large and experienced operators will have a similar network already, but many won’t have had the time to develop as extensive one. Connecting to a B2B reseller makes that easier.
Reduce costs of sales
Because it is easier and the work has already been completed, the commission you pay to connect to a B2B reseller is much smaller than the overall cost of building such a network. The reseller works with economies of scale that the average tour operation cannot.
B2B sales are more costly than B2C by their nature. This is again because of the number of decision-makers involved and the length of time they take to complete. A guest will have made their mind up in a matter of days if not minutes. Agreeing on a single partnership can take months, along with all the paperwork that needs to be prepared and lawyered.
Negotiating with and connecting to a B2B reseller will take time, but it only needs to be done once for each reseller. And each reseller will connect you to hundreds more businesses, at least.
Access technology
As well as creating their networks, B2B resellers have also spent years building the technology required to sell and support their clients on both sides. This will often be a portal, or extranet, and an API for operators and third parties. It will be similar to what you would expect from an OTA but may include slightly different information, just as GetYourGuide differs from Viator.
Because B2B resellers will specialise in a particular market, they will have built tools that fit those needs. The systems used by Attraction World will gather different information from those used by Flight Centre. This will require a bit of work on your part to map your trips to a new connection.
With so many different resellers, each using different systems, tour operators who want to connect to a lot can use a channel manager tool, such as TourCMS. Channel managers have already built the connections and relationships required for many resellers. These will connect to your booking system and can be built by reservation system providers, as with TourCMS and Palisis.
Some channel managers also provide their form of B2B sales, called a marketplace. This will enable you to find new companies to contract with. These companies are often on a smaller scale than B2B resellers, but you will likely want to work with these for specific reasons, such as their customer base.
Increased marketing reach
Just as you may see an OTA marketing one of your products, at times, in ways that can be annoying, B2B resellers can use your company in their marketing as well. However, this will target their customers, who may be travel agents or hotels. This will not be the programmatic ads on social media or search engines and is less likely to cannibalise any direct sales you want to make online.
In most cases, this will take the form of adding your branding to the Partnerships section of their website and marketing materials. The B2B reseller will use your brand equity to enhance their own and attract new clients. This can improve the visibility of your brand. Certain products may sometimes be highlighted and promoted based on their performance. These will be pushed directly to their clients who may be interested.
The reseller’s clients may market your products to their customers. This may be in regions that you don’t have access to. However, they will be if you are using resellers to access accommodation or transport providers in your location. Some will use your branding, and some won’t. If you have a strong brand and care about this, you can check the terms of your contract.
New insights
Some B2B resellers will provide their own suite of tools to analyse the information generated by your sales. Not all will, but much of the data will also be collected by your booking system and channel manager if you use one.
The main purpose of this data is to help you increase your sales through their platform. However, this information can be very useful because B2B resellers are specialised in a particular area. For example, you may use a reseller to access a market in a certain region where they speak a different language. The data you collect could enhance your marketing efforts and bring in direct sales from this location.
Customer service
You can expect varying levels of customer service from different B2B resellers when you require support, as you can with OTAs. They will also provide different ways to manage a customer’s booking and provide service to them.
If you are working with a well-maintained booking system, the technical problems you encounter will generally be handled by them in conjunction with the B2B reseller. For operators, this will be a matter of reporting the issue to the account manager.
You should ask questions about customer service in areas such as mapping products to resellers’ systems and payments when you are beginning to explore the options a B2B reseller has. Don’t necessarily take their word for it — of course, they will say they have good customer service or have plans to scale up. Check reviews and search out other operators who distribute their products through them. Your contacts in your booking system and channel manager will also have a good idea.
Operators will have different expectations for how they want customer service for their guests handled. Some will want to carry it out themselves, while others will be happy to reduce their workload and have the reseller manage it. Again, check what the situation is before you make any decisions.
What is required to use a B2B reseller?
Medium and large operators who want to sell through multiple resellers need channel management. This will reduce the work required to connect to each and make managing and analysing sales easier. Channel managers may also provide more connections than you have thought of.
Research each reseller thoroughly. What is their market, what rates do they offer, and how many companies do they sell through? You should ask the reseller directly, other tour operators that work with them, and your booking system or channel manager. While you may rely on your channel manager to handle the technical side, you should ask about the reliability of a reseller’s technology and how well their API is maintained. If this is poor, it can affect your sales and mean that any work you put in has been wasted.
When choosing a B2B reseller, you will need to understand their contracting. Do they use a direct model or wholesale? Who is the merchant of record? Will you be working with net rates or commissionable rates? The answers to these questions will affect your business in different ways. You can read more about this here.