What does B2C (business to consumer) mean?
The term B2C (business to consumer) refers to the setup where a company sells to retail customers instead of other companies.
If you wish to gain a more in-depth understanding of this topic, check out the FAQ section below:
Question #1: What is the difference between B2C (business to consumer) and B2B (business to business) companies?
The primary difference between B2C (business to consumer) and B2B (business to business) companies is the type of customer they serve. As we have talked about in the previous section, B2C companies sell their products and services to retail customers. In contrast, B2B companies sell theirs to other businesses.
Question #2: What types of products and services do B2C (business to consumer) companies sell?
The types of products and services B2C (business to consumer) companies sell can be anything that a retail customer might want or need, such as groceries, gadgets, medicine, appliances, food, and even experiences. As long as there is a need in the market, any business with the needed know-how and resources to fill it is free to do just that.
Question #3: What are the main differences between B2C and B2B transactions?
The main differences between B2C (business to consumer) and B2B (business to business) transactions include but are not limited to:
- How long it takes for purchase decisions to be made
- How big a typical transaction is
- How complex each transaction is
Let us dive deeper into each one:
First, impulse buys are quite common in B2C transactions because there is usually only a single person deciding whether or not they want to spend money on a specific product or service. If you have ever walked into a supermarket hungry, you know exactly what we mean.
B2B transactions typically take significantly longer. There is just significantly more negotiation with significantly more decision makers that happens before the decision to make a purchase is made.
The next difference between B2C and B2B transactions is their size. B2C purchases generally involve significantly less money and smaller order quantities than B2B ones.
Of course, this does not at all mean that retail customers cannot buy things in bulk. It is just that businesses generally possess more purchasing power and make wholesale purchases more often than retail customers. Companies do not have to pay out of pocket, after all. It is usually their customers who shoulder their expenses.
The third difference between B2C and B2B transactions is that the former does not require companies to bid for contracts before they can sell to their customers. In contrast, the latter usually involves a bidding process to find the right supplier—especially for big purchases.
Question #4: Can a B2C company also be B2B at the same time?
Yes! A B2C (business to consumer) company can also be B2B (business to business) at the same time.
A good example of this would be Google. Aside from selling a host of solutions to businesses and advertisers (an example of a B2B transaction), it also provides retail customers an array of consumer products, such as smart devices and mobile phones (an example of a B2C transaction).
Another example would be Samsung. A lot of people are not aware that aside from selling consumer electronics products, such as TVs, air conditioners, refrigerators, smartwatches, and, of course, mobile phones (B2C), the company also supplies other tech companies with components, such as OLED screens (B2B).
The third and final example would be Intel. The company supplies microprocessors to a lot of big-name manufacturers, such as HP, Lenovo, and Dell. In fact, until the recent introduction of Apple’s brand-new M1 processor, all Mac computers have been exclusively using Intel processors (B2B).
But aside from its B2B clients, Intel also sells its processors to retail consumers looking to build a custom PC (B2C).