All you need to know about B2B Business



All you need to know about B2B Business

Jan, 16 2019

Business-to-business or B2B or, in some instances, also known as BtoB is a situation or commerce where one business makes a commercial transaction with another where the transaction could be a service or a product. It differs from Business-to-Consumer or B2C or BtoC where the transaction or commerce is between a business and direct consumers or between the business to market from where the consumer receives the product or service. B2C heavily relies on the economic implication of information symmetry and in contrast, the B2B involves medium to larger companies that have a resource, information, and even commercial advantages over the smaller companies or businesses.

Most often, the overall bulk or volume of a typical B2B transaction is comparatively higher than the bulk of a typical B2C transaction. The major reason for this variation is due to the fact that the B2B transactions will involve one or more subcomponents and raw materials considering the supply chain leading to multiple transactions. In contrast, B2C will have only one transaction that gives scope to the selling of the finished product to the end consumer. For instance; if we consider the automobile business; the manufacturer will participate in several B2B transactions. However, the end-product which is the final transaction involving the selling of the vehicle to the end consumer would be a B2C transaction.

Common Instances of B2B Commerce

When a business outsources materials (raw materials) for manufacturing or production process that determines product output. (Ex: automobile manufacture requiring rubber as raw material or the tyres for the vehicles.)

When a business requires the operational services of another business (Ex: finance audits, report writing, research reports, whitepapers, etc.)

When a business needs another business/company for re-selling of its goods and services of self or other (Ex: Retail buying of the end products.)

'Metasourcing' and Mobile B2B

During certain instances, when a business seeks business support particularly from friends and family on a commercial basis, it would be considered a B2B transaction. However, during such instances, the term used would be "Matesourcing." Though not an uncommon phenomena, the term is quite an uncommon household terminology.

B2B e-commerce involves the selling of products and services between businesses using the internet as an online sales portal. It is one of the means of improving the efficiency of businesses enabling the digital processing of orders.

Although considered and compared to classic B2B, mobile B2B is an independent domain in itself. With the currently trending internet era, this phenomena is gradually gaining popularity. Mobile B2B also differs from mobile B2C that involves classic catalog browsing where the former requires certain features including the display of customer-specific prices; up-to-date stock indication; real-time calculated discounts, etc.

Vertical and Horizontal B2B Models

Vertical B2B is typically manufacturing or business oriented which is divided into two marketing directions, upstream and downstream. As a rule, to support a business’ growth, downstream marketing should support the value proposition in alignment with their product positioning. It involves the correspondence of a brand’s or company’s value proposition ensuring that it is delivered to and experienced by the consumers. It is one of the means of growing a business’ market share. In contrast, upstream marketing is vital to creating a strong brand presence and for sustainable growth. Some of the upstream strategies include innovation, acquisition, the launch of new services and products, etc. It could be defined as the process of employing a business’ insight, ideology, and identity to determine the company’s growth.

Most often, a typical vertical B2B website could be compared to an e-commerce website or online store. Unlike B2C e-commerce, B2B website could be used as a platform to promote the business’ services and products to other businesses comprehensive and vigorous B2B transactions. Horizontal B2B is a pattern of online business transaction typically applicable for intermediate trading market. It facilitates trading opportunities for suppliers and purchasers. It is an online platform that brings together sellers and buyers by giving information pertaining to the product on the website.