What does B2B (business to business) mean?
The term B2B (business to business) refers to the setup where a company buys from or sells to another company instead of individual customers.
If you wish to learn more about this topic, check out the FAQ section below:
Question #1: What is the difference between B2B (business to business) and B2C (business to consumer) companies?
The main difference between B2B (business to business) and B2C (business to consumer) companies is the customer they serve. As we have seen earlier, B2B companies sell their products and services to other companies. In contrast, B2C companies, as the name suggests, sell their products and services to individual customers.
Question #2: What kinds of products and services do B2B (business to business) companies sell?
The kinds of products and services B2B companies sell typically consist of raw materials, hardware, software, solutions, and equipment that can be used to produce products and services that can then be sold either to other businesses or individual customers.
But there is no actual limit to the types of products and services a company may sell to another. As long as there is a need for something in any industry, any business who has the resources and know-how to fill it can do just that.
Question #3: What are the differences between B2B and B2C transactions?
The main differences between B2B (business to business) and B2C (business to consumer) transactions include but are not limited to:
- The time it takes for decisions to be made
- The typical size of each transaction
- The need to bid for contracts
Let us take a look at each one in more detail.
First, in B2B transactions, there is no such thing as impulse buys. It usually takes a lot of back and forth and convincing multiple decision-makers before a contract is signed or a purchase order is made. This is especially true for sizable purchases—which brings us to the next difference: the typical size of each B2B transaction.
Businesses, in general, have more purchasing power than individual customers, which is a good thing since they typically demand more of whatever it is they are buying as well. This means that B2B transactions generally involve significantly more money and much bigger order quantities than B2C ones.
The third and final difference we will take a look at today is that with B2B transactions, it is quite common for companies to have to bid for and win contracts before they can sell anything to other companies. B2C companies do not have to worry about any of that.
Question #4: Can a company be B2B and B2C at the same time?
Absolutely! A company can be B2B (business to business) and B2C (business to consumer) at the same time.
Google would be a good example of this. It sells consumer products, such as mobile phones and other smart devices, to individual customers (a B2C transaction) and business solutions to companies and advertisers (a B2B transaction).
Samsung is another example of a company that is both B2B and B2C. You are probably familiar with their consumer electronics products. They sell mobile phones, refrigerators, air conditioners, smartwatches, and so much more to retail customers. What a lot of people do not know, however, is that they also supply components, such as OLED screens, to other tech companies.
A third example would be Intel. While its processors are available for purchase by retail customers who want to build themselves a custom PC, the company also sells these processors in bulk to other companies. In fact, until recently, Apple has been using Intel processors on all their computers.