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Business-to-Business (B2B): What It Is and How It’s Used

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

b2b business model wikipedia

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

b2b business model wikipedia

What Is Business-to-Business (B2B)?

Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-to-business refers to business that is conducted between companies, rather than between a company and individual consumer. Business-to-business stands in contrast to business-to-consumer (B2C) and business-to-government (B2G) transactions.

Key Takeaways

  • Business-to-business (B2B) is a transaction or business conducted between one business and another, such as a wholesaler and retailer.
  • B2B transactions tend to happen in the supply chain, where one company will purchase raw materials from another to be used in the manufacturing process.
  • B2B transactions are also commonplace for auto industry companies, as well as property management, housekeeping, and industrial cleanup companies.
  • Meanwhile, business-to-consumer transactions (B2C) are those made between a company and individual consumers.

Lara Antal / Investopedia

Understanding Business-to-Business (B2B)

Business-to-business transactions are common in a typical supply chain , as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business-to-consumer transactions.

In the context of communication, business-to-business refers to methods by which employees from different companies can connect with one another, such as through social media . This type of communication between the employees of two or more companies is called B2B communication.

B2B E-Commerce

Late in 2018, Forrester said the B2B e-commerce market topped $1.134 trillion—above the $954 billion it had projected for 2018 in a forecast released in 2017. That's roughly 12% of the total $9 trillion in total US B2B sales for the year. They expect this percentage to climb to 17% by 2023 . The internet provides a robust environment in which businesses can find out about products and services and lay the groundwork for future business-to-business transactions.

Company websites allow interested parties to learn about a business's products and services and initiate contact. Online product and supply exchange websites allow businesses to search for products and services and initiate procurement through e-procurement interfaces. Specialized online directories providing information about particular industries, companies and the products and services they provide also facilitate B2B transactions. 

Special Considerations

Business-to-business transactions require planning to be successful. Such transactions rely on a company’s account management personnel to establish business client relationships. Business-to-business relationships must also be nurtured, typically through professional interactions prior to sales, for successful transactions to take place.

Traditional marketing practices also help businesses connect with business clients . Trade publications aid in this effort, offering businesses opportunities to advertise in print and online. A business’s presence at conferences and trade shows also builds awareness of the products and services it provides to other businesses.

Example of Business-to-Business (B2B)

Business-to-business transactions and large corporate accounts are commonplace for firms in manufacturing. Samsung, for example, is one of Apple's largest suppliers in the production of the iPhone. Apple also holds B2B relationships with firms like Intel, Panasonic and semiconductor producer Micron Technology.

B2B transactions are also the backbone of the automobile industry. Many vehicle components are manufactured independently, and auto manufacturers purchase these parts to assemble automobiles. Tires, batteries, electronics, hoses and door locks, for example, are usually manufactured by various companies and sold directly to automobile manufacturers.

Service providers also engage in B2B transactions. Companies specializing in property management, housekeeping, and industrial cleanup, for example, often sell these services exclusively to other businesses, rather than individual consumers.

b2b business model wikipedia

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What Is B2B, and How Does It Differ From B2C and DTC?

Table of contents.

b2b business model wikipedia

B2B is short for “business to business.” It’s a business model in which the companies involved create products and services for other businesses and organizations. B2B companies can include software as a service (SaaS) , marketing firms, and businesses that create and sell various supplies. B2B businesses have unique challenges, including cash flow management, and must continually innovate and maintain customer loyalty.

We’ll explore the B2B business model and how B2B businesses can maximize their profits and market share. 

How do B2B business models work?

In the business-to-business model, businesses and organizations exchange goods and services. For example, one company may contract with another business to provide the raw materials needed to manufacture a product. 

Another business may need to purchase products from another to stock their shelves, while other companies hire businesses to promote their products and services, insure their operations, design their logo, or write website content. 

Consumers aren’t a direct factor in B2B transactions, but they’re a critical component of why B2B companies work together. 

B2B isn’t the only business model involved in the supply chain. While B2B companies sell products and services to other private businesses, public-sector organizations, and charities, B2C (business-to-consumer) – or DTC (direct-to-consumer) – companies sell products and services directly to consumers.

Some companies have a mixed B2B and B2C model. Businesses and consumers may both use their products and services, or they may have separate product versions or ranges specifically for businesses or consumers.

Where do B2B companies sit in the supply chain?

If you want to understand where B2B companies factor into the supply chain, it’s essential to look at the three economic sectors: primary, secondary and tertiary.

  • Primary market: The primary market is exclusively B2B. Primary-sector companies are responsible for extracting or producing raw materials – for example, farmers or oil and gas companies.
  • Secondary market: The secondary market is almost exclusively B2B. Secondary-market companies manufacture and assemble products. They add value to the raw materials they buy from the primary market by turning them into something else. Think about manufacturers that turn oil into plastics or jewelers that cut and polish diamonds. Secondary-market assembling companies include car manufacturers and construction companies. Occasionally, secondary-market companies use the B2C model – for example, farmers who sell products in a market stall.
  • Tertiary market: The tertiary market is a mixture of B2B and B2C models. Some tertiary-market companies deliver the goods or services businesses or consumers want. These businesses include plumbers, internet retailers, floor installers, supermarkets, commercial finance brokers, home improvement specialists, tutors and the hospitality sector. 

What are some B2B tertiary market examples?

Some tertiary companies are B2B only. They provide goods and services other customer-facing tertiary companies need to do their jobs. Here are some examples:

  • Plumbing supply companies sell plumbers the equipment they need.
  • Point-of-sale (POS) providers sell POS systems to retailers. 
  • Commercial finance brokers need lenders to fund small business loans , equipment leasing packages and asset-based loans .
  • Management and business consultants help companies survive and grow.
  • Retailers need credit card processors to process payments from customers.
  • Companies need advertising firms to help them achieve higher sales.
  • Businesses need payroll providers and financial services companies to run payroll and streamline taxes.
  • Businesses need lead-generation services to create revenue opportunities.
  • Organizations need insurance providers to protect employees, customers and their own interests.

All functioning economies rely on successful buying and selling between companies in different sectors across the supply chain .

Challenges of running a B2B company

Perhaps the most significant challenge most B2B companies face is finding businesses to buy their goods and services. B2B marketplaces are much smaller than consumer-facing models. For example, a B2C clothing e-commerce website would have a broad audience of potential buyers. 

However, businesses often spend more on purchasing than consumers and have much more generous budgets. So, while a B2B company may make fewer sales, it’s likely to see a much higher profit than a B2C company.

Here are some of the unique challenges B2B businesses face. 

1. B2B businesses must continually innovate and maintain customer loyalty.

Innovation is a critical issue for many B2B companies, especially those that sell products and services with a monthly subscription model, such as SaaS packages and online accounting software .

B2B businesses must find new ways to constantly improve their products’ functionality and ease of use to improve their chances of increasing market share while maintaining customer loyalty. And their competitors are also in the same continual development cycle looking to create an even better product.

When planning new products or incremental changes to your existing products, request client feedback through business surveys to ensure your customers will still be pleased with your offerings.

2. B2Bs must build a strong internet presence.

B2B companies must invest in a well-designed and consistently maintained business website so their customers can find them and easily navigate their offerings. Search engine optimization is critical for achieving a top ranking in Google, as is optimizing your website for mobile . 

Your website content – including blogs, guides, product descriptions and whitepapers – should appeal to customers and prospects at the three stages of the sales funnel : the awareness, investigative and action stages.

  • Awareness stage (top of the funnel): This stage is when a potential client realizes there are points of friction within their business or opportunities that they currently don’t have the personnel, technology or knowledge to pursue.
  • Investigative stage (middle of the funnel): In this stage, a potential client is proactively looking for a solution, and they know there are multiple solutions and providers. During the investigative phase, clients consider different solutions and providers, often relying on website content to make decisions.
  • Action stage (bottom of the funnel): After a prospect makes a shortlist of solutions and providers, they contact candidates to begin the sales discovery process.

Every time a prospect visits your website, you have an opportunity to provide the information they need to choose your solution, follow you on LinkedIn , download helpful content, or join your email newsletter .

3. B2B companies must manage cash flow and late payments.

Many B2B companies invoice clients on 30- or 60-day payment windows. For example, an invoice issued on Feb. 1 may not be paid until April 1. Even then, some clients don’t make timely payments, despite generous credit terms.

If your company issues many invoices, the effect of delayed payments may be mitigated by the regular arrival of money in your account. However, some manufacturing businesses may only issue a handful of substantial invoices a year, so being paid late puts the company’s future in jeopardy.

While business loans are available , consider invoice factoring if late payment is an issue for your company. Invoice factoring (sometimes called invoice discounting) means you sell your invoices to a finance company and receive 80% or more of the invoice value the following day. When the client makes a payment, you receive the remaining 20% minus factoring fees.

Money owed to your business appears in the accounts receivable column in your accounting software. Keep an eye on how much money clients owe you to maintain effective cash flow.

How B2B companies can boost market share

Running a B2B business presents many challenges, but there are ways to maximize revenues and market share.

1. Join supply and procurement exchanges.

Supply and procurement refer to a business purchasing the goods and supplies it needs to run profitably.

Cost-effective procurement is an ongoing challenge for many businesses. Within larger organizations, multiple departments and locations may have distinct budgets and agreements with various suppliers. This might mean one department pays $3 for a lightbulb while another pays $30.

Online supply and procurement sites provide pre-approved, pre-priced lists of goods and services to larger businesses and public sector organizations. If you register with one of these e-procurement sites, your company will immediately be visible to buyers and specifiers within some of the world’s largest companies.

2. Use keyword-targeted marketing.

B2B businesses prioritize high-quality websites and high-ranking search engine results. To maximize your website’s ranking potential, use targeted keywords that your competition may be overlooking.

For example, if you’re a broker competing for the term “business loan,” according to SEO marketing platform Ahrefs, your site would need 202 backlinks from third-party sites to have a chance of getting onto the first page of search results.

There are more than 640 associated “business loan” keywords that might work for you, such as “small business loan,” “business loan calculator,” and “startup business loan.” Try using effective terms with less competition to draw traffic to your site and build your site’s status with Google over time.

3. Try direct marketing campaigns.

To help your sales team generate leads , consider building or purchasing email lists of decision-makers in the types of companies you target.

CRM software can make email marketing campaigns and follow-up seamless. Stay in touch with decision-makers once a month so they become familiar with your company and how it’s helped other clients. Over time, you’ll create familiarity and trust, and these campaigns will start to generate strong, closeable, inbound leads.

Many pay-per-click ads focus on Google, but businesses shouldn’t overlook Bing, which has a 10% market share in the U.S.

4. Use lead-generation websites.

Although not suitable for every type of B2B company, lead-generation websites create detailed buyers’ guides on a wide range of business goods and services.

These sites let visitors get two or more quotes from suppliers and then sell these leads to fully qualified B2B companies. When a sales rep reaches out to these prospects, they already know the client’s budget, needs and timeframe. 

Lead-generation sites offer two lead types: exclusive leads that only you receive, and shared leads that you and other companies have the chance to pitch.

B2B-specific sales and marketing

B2B marketing campaigns require careful planning, according to Brent Walker, senior vice president of marketing and analytics at PatientBond.

“B2B typically relies on its sales function and account management team to establish and strengthen customer-client relationships ,” he said. “Marketing may include advertising in trade journals, having a presence at conventions and trade conferences, digital marketing – an online presence, SEO, email outreach – and other traditional awareness efforts.”

The key to B2B marketing is demonstrating value to a business’s bottom line, increasing your likelihood of achieving a return on investment . If your solution makes business processes more cost-effective and efficient, promote these points. If your service increases traffic to a website or boosts conversion rates, highlight these benefits for added revenue. 

The underlying motivation behind all business purchases is increasing profit. If you demonstrate how your product and service can boost your customers’ bottom line, you’ll likely get the opportunity to discuss it with a decision-maker.

Matt D’Angelo contributed to the writing and research in this article. Source interviews were conducted for a previous version of this article.

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Digital Enterprise

B2B Business Models: The Ultimate Guide

Are you thinking about starting a business but have difficulty understanding what exactly B2B business models are?

Well, you’re in luck because in this article, we provide a detailed guide that explains everything, from the concept of a B2B business model to the principles of its functioning, so you no longer feel intimidated or confused and can nail down as a pro.

What Is a B2B Business Model?

3 popular b2b business model types, b2b models that help establish connections with your trading partners, benefits of b2b business models, b2b e-commerce, final thoughts.

Let’s start with fundamentals and define what a B2B business model is. 

In layman’s terms, a business model is a set of rules and processes that explain how a company is functioning and how it is making money. In other words, it’s a strategy that companies stick to in order not to deviate from their business goals. 

Business models may look slightly different, but the core elements are typically the same and include the following information:

  • A brief description of the product or service offered;
  • Methods of interacting with clients and selling goods;
  • Ways to penetrate new markets;
  • Details about revenue streams.

When it comes to B2B business models, it’s important to note that, while they may share some core elements with B2C models, there are significant differences between the two. These differences mainly stem from the fact that the former target other businesses, while the latter are aimed at regular customers.  

Of course, just like any other business model, B2B can be divided into several types, depending on the sector they operate in and their approach to doing business. Let’s discuss each of them in detail so you can understand how they differ and which of them would be the most beneficial for you. 

  • Customer-Centric Type

What defines a customer-centric B2B model is that it puts the needs and preferences of customers at the forefront of every business decision and is focused on continuous improvement. Thanks to this, businesses can offer more customized marketing campaigns and re-engage with their existing customers over and over again.

One example of a successful implementation of a customer-centric model is Amazon. From its inception in 1994, the company has placed a strong emphasis on their customers. This approach has played a significant role in its success, allowing the company to become the e-commerce giant we know today. 

  • Buyer Centric Type

Another type of B2B model is buyer centric. Under it, businesses put the buyer at the center of the sales process rather than the customer and focus on creating a personalized experience for them. Most often, it’s used by large companies that have a good flow of buyers and a high rate of purchases overall. Walmart is a case in point. 

The company has created a portal for buyers and sellers where they can interact. It has set certain rules and standards that they must comply with, but the success of a sale depends entirely on the approach that sellers use to lure customers into buying. 

  • Intermediary Centric Type

The intermediary centric model is another popular type of B2B that is widely used by companies around the world. As the name suggests, it functions by providing a common platform for vendors and sellers, with businesses acting as intermediaries between the two parties and earning profits through commissions. To give you an example, take eBay.  

All participants that go on the platform understand commission charges and agree to the terms before they can get started. 

In addition to the aforementioned ones, there exist a few more categories of B2B models that can come in helpful when it comes to connecting with your trading partners. Here they are:

  • Direct Model

Under it, companies connect with their trading partners directly to transfer electronic documents easily. They have an IT team that takes the authority for all of the tasks like document translation and technical support. As the number of partners increases, monitoring communications and resolving issues becomes a priority. 

  • Network B2B

This type of model was created to simplify the direct one. Instead of connecting with each partner directly, companies use a B2B Service Provider called a Value-Added Network (VAN). The VAN provides a single connection for companies to transfer documents using different protocols like AS2, SFTP, FTPS, FTP over VPN, and RosettaNet. 

Trading partners, in turn, could also connect to the SP using the protocol that worked best for them. 

A combination of the direct and network models is known as the hybrid B2B type. Businesses use it to connect directly with their high-volume trading partners through the Internet to save on transaction fees. At the same time, they still may use a SP to trade with their partners, allowing them to benefit from both models.

Finally, let’s talk about the Managed B2B model. It implies outsourcing the company’s entire B2B process to a third-party service provider, which effectively helps them save on resources, costs, and complexity involved. 

The service provider receives documents directly from the company’s ERP system and handles tasks like mapping, technical support, and document tracking. Then they deliver the documents to trading partners via the agreed method that works best for both parties. 

Now that we’ve covered all existing types of B2B models as well as their subdivisions, it’s time to take a closer look at their advantages compared to B2C. We may not be able to tell about all of them, but we’ll certainly go over the most important. 

  • B2B experiences greater stability . Businesses strive to build long-term relationships with their clients and partners, which allows them to build a loyal customer base;
  • Higher accuracy in budget predictions . As companies have a more stable customer base, they can make more accurate predictions with regard to their future spending;
  • A strong network of partners . Relationships between clients and partners are built on trust, which leads to more effective collaboration;
  • The sales cycle is significantly shorter , which helps lower overall costs;
  • It relies on factual data . This makes it easier for businesses to calculate sales and other important metrics while minimizing the risk of error.

The B2B model is not only advantageous for businesses but also for their clients. By using this model, clients can access the desired services or goods at a lower cost without the need to switch between multiple providers.

What’s more, they are guaranteed to get consistent quality and may also be eligible for additional loyalty discounts over time.  

This guide would be incomplete without mentioning B2B E-Commerce, a model that has shown significant growth in the last few years as more companies understand its benefits. 

B2B E-Commerce offers numerous benefits. First of all, it helps businesses attract more buyers by offering higher-quality products and services. It also increases brand awareness, which can result in higher sales volumes and profits. 

Moreover, this model provides businesses with the means to monitor their performance, marketing campaigns, and inventory turnover, as well as analyze metrics such as ROE and adjust in time to align them with their end goals.

To wrap it up, choosing the right B2B business model is crucial for any company looking to succeed in today’s competitive landscape. Therefore, it’s important to understand the various types of models available and their benefits.

Hopefully, with the tips and explanations provided in our guide, you’ll decide on the right business model and create an effective strategy that drives growth, increases, and meets your customer needs.

B2B Meaning: What Is B2B & The B2B Model?

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B2B, or business to business, is a vital sales method for many businesses. It is a growing and profitable market, too.

But it comes with its own unique requirements and set of tools for selling, marketing, and invoicing customers.

We'll walk you through the most important aspects of each and get you the information you need to make your B2B business grow.

What Is a B2B Company ?

A B2B business is a company that sells its products or services to another company. This is in contrast to the B2C model where they sell to individual consumers. These businesses include product manufacturers, wholesalers, distributors, retailers, and more.

B2B Business Model Pros and Cons

The B2B business model has both pros and cons for the business owner and their team.

  • Larger orders. B2B sales are high and orders are made in bulk. This means revenue can be higher with fewer sales than B2C businesses.
  • Increase conversion. Businesses convert better than individuals. This makes marketing efforts more successful and wastes less money attracting new customers.
  • Streamlined structure. Communication between businesses happens regularly so sellers are more informed about their customers’ needs.
  • Long buying cycle. B2B consumers take a long time to make purchasing decisions. Multiple stakeholders are involved and need a number of approvals to go forward.
  • Limited market. B2B sellers have fewer potential customers and the ones they do have are very important. If even a single customer is unhappy, they can lose a lot of money.
  • Difficulty forecasting. Both manufacturers and resellers can run into issues with demand forecasting since B2B has a shorter inventory cycle. This can in turn lead to overestimating demand and leave all parties with dead stock (see dead stock meaning ).

The B2B business model is a tried-and-true form of commerce. These businesses are continuing to grow at an exponential rate through the internet, much like their B2C counterparts.

B2B vs. B2C

While B2B companies provide services or products to other businesses, B2C, or "business-to-consumer," companies sell direct to consumer . They’re two separate business models that serve different types of customers.

B2B or B2C: Which Is Better?

Neither the B2B nor B2C business model is inherently better, they both have their own pros and cons. The model that best fits your business is determined by your goals, infrastructure, and industry.

Here are four of the biggest differences:

  • Pricing. B2C businesses (see D2C meaning ) offer a single tier of pricing for all customers that are only affected by sales or discounts. B2B businesses usually offer multiple levels of discounted prices based on the quantities and frequency of orders.
  • Customer service. B2C companies use customer support representatives to answer general questions and help with issues. B2C businesses use account managers who bring in new wholesale customers and regularly push sales and assist with account and order issues.

B2B vs B2C Buying

B2B and B2C consumers behave very differently and their buying processes reflect this.

Here are a few ways they differ:

  • Buying cycle time. B2B consumers act more slowly and are better informed about their purchases. This is because their purchases are of a much larger quantity and their own business is greatly affected by their purchases. B2C consumers convert more quickly and are often less informed about product differences.
  • Emotional investment. B2C consumers often make emotionally-driven purchasing decisions. They may be moved by advertising to associate your product with happiness, or they may be trying to alleviate some frustration. B2B consumers are much more calculating and driven by numbers.
  • Parties involved. B2C consumers are individuals or a small group. They can easily communicate their wants and needs and are much easier to build a relationship with as a business. B2B consumers often involve multiple people and teams in their purchasing decisions. Rapport can still be built, but it will take longer and requires more investment.

Both models are capable of providing a business with a large volume of sales and push product. Once you determine the B2B model is best for your business, you need to learn how to make B2B sales.

Ready to unlock the full potential of kitting for your business? Discover the ins and outs of this efficient inventory management technique that can streamline your business operations, reduce costs, and improve customer satisfaction .

What Is B2B Sales ?

B2B sales is a sales model where products or services are sold from one business to another. It is contrasted to B2C sales where a business sells to individual customers.

Why Use B2B Sales?

B2B sales is a business model that can pay massive dividends. Though harder to make than B2C sales, the return is higher and results in establishing relationships with a much higher lifetime value.

Generating B2B Sales Leads

Generating qualified B2B sales leads is vital in growing your business and heading off competition. These leads can be acquired in many ways, from email marketing to cold calls. Pick the strategy that works best for your business and your bottom line.

The B2B Sales Process

The B2B sales process is a set of steps the sales team follows to convert prospects into customers. It's how your company operates to move leads through the sales funnel. This process is different for every company, but should be a rigid framework for all salespeople to follow.

A structured approach will minimize the number of mistakes and ensure salespeople are selling your products or services in the same manner.

The B2B Sales Methodology

A sales methodology is a set of rules that define how a business sells products or services to its customers. This is not the same as the sales process which is focused on the steps in the sales process. Sales methodologies are built around identifying customer needs, establishing the value your business brings, and then communicating both to your target customers.

Making B2B sales takes hard work and dedication, but can lead a business to make strong relationships and create sustainable growth. The best way to make sales leads is with a robust digital marketing strategy.

B2B-Business-guide

What Is B2B Marketing ?

B2B Marketing used to be done entirely through cold calls and lead buying, but has transformed in the technological era. Digital marketing is now the most common form of advertising and a powerful sales tool.

Content Marketing

B2B content marketing is using content to attract an audience, build brand awareness, collect leads, and drive sales. Successful B2B content is designed to be useful, informative, and professional. This content can be blog posts, whitepapers, webinars, and more.

B2B email marketing refers to pushing marketing campaigns to existing or prospective customers using email. Email marketing has the highest click-through and conversion rate of any channel and allows for a lot of personalization. It also has low startup costs and there are many services on the market that allow people with little experience to run campaigns.

Social Media

Social media is often one of the most difficult marketing tools for B2B companies to use. It can be hard to avoid being boring while promoting your product or service. The key is to focus on your audience's needs and wants. Then, tailor your social media marketing to match while still conveying the value you bring. Social media marketing is a major player in the DTC marketing world.

Marketing Strategies

A B2B marketing strategy is the overall plan a business uses to acquire customers. B2B marketing can be done in many ways to great effect, but there are a few strategies that most B2B businesses should adopt. They need to conduct thorough research, have a user-friendly website, and use paid and organic search engine optimization. These efforts will pay dividends and make the most of their marketing budget.

How To Promote in B2B

Promoting a B2B business can be difficult and requires looking into a variety of marketing channels. Focusing on a few free channels like content marketing, SEO, social media, and referrals are a good place to start. Organically building your marketing can take longer, but also gives you a solid base to work from with less risk.

B2B marketing takes more effort than its B2C counterpart but also has a much higher return. Marketing and sales are only worth investing in if you're able to handle B2B payments.

B2B Payments

B2B payments are transactions processed between two businesses for exchanged products or services. B2B payments tend to be for high sums and are often split across months or quarters.

Payment Systems

A B2B payment system is the software or program used to process payments. Many come with the ability to hold payments in escrow, check a customer's credit-worthiness, and have integrated reporting. The best, like BlueCart Payment Processing, include the ability to send automated payment reminders, process vendor payment s, report on on-time or late payments, collections, and more.

b2b-payments-bluecart-pay

How Payments Work

B2B payments are either received at the point of sale or an invoice is sent to the buyer at a later date. Most B2B businesses send invoice templates monthly and require payment in 30 days. The method and terms of payment vary by business and relationship of the parties involved.

Card Payments

B2B card payments are when a buyer pays in full via a credit card. The buyer then has a variety of options in paying back their credit provider. This is one of the quickest and the second most popular methods of payment.

Check Payments

B2B check payments are the most common form of payment and can be either physical or electronic. These checks are endorsed by the buyer and deposited by the seller into their own bank account. Many banks now offer mobile apps that let you scan checks for quicker depositing.

Mobile Payments

B2B mobile commerce payments involve using a digital wallet on the buyer's phone to send a payment to the seller's phone. Many businesses fear it is not secure enough to conduct large B2B sales through it.

Electronic Payments

Electronic payments for B2B include many types of payments and make up the bulk of B2B transactions. Whether ACH, RTP, or even mobile payments, the convenience and security of electronic payments make them popular among B2B wholesale businesses.

The Future of B2B Payments

The future of B2B payments is through the cloud and online payment platforms like BlueCart Payment Processing. These tools continue to grow more secure every day and allow for immediate transmission of funds and access to historical data. It truly is the future of eCommerce growth .

They also allow small businesses to have access to robust financial tools and sell to a larger market with less risk. For wholesale food distributors, the BlueCart Digital Storefront is one of the best eCommerce platforms to increase revenue and reach new customers.

B2B eCommerce Platform

B2B eCommerce platforms are online services that allow B2B businesses to conduct business more easily. B2B headless eCommerce is conducted across many industries and by businesses of all sizes using a variety of platforms.

B2B eCommerce Platform Features

With so many options on the market, it's important to get the best platform for your business. Here are a few features to look for in a B2B eCommerce platform:

  • Volume discounts. Look for a platform that lets you make discount tiers based on order quantity to automate the process, like BlueCart.
  • Personalized offerings. This allows you to set different prices and feature different products for your customers. This may be by order level, geographic location, or any other qualifier. Many in the food industry use BlueCart specifically for this.
  • Easy reordering. B2B customers like to order the same products multiple times. Making it easier to reorder these products will make your customers more satisfied and can lead to more purchases. BlueCart is great at this and even has “standing orders”, which are essentially automated recurring orders.
  • Flexible payments. The more options for B2B payments available, the more likely your customers are to convert. Look for a platform that can accommodate a variety of payment options including checks, credit cards, electronic transfers, and invoicing. BlueCart offers these options and more.

B2B eCommerce Solutions

There are many eCommerce software solutions for B2B eCommerce companies to choose from. For food manufacturers, broadline distributors, and wholesalers, the best choice is BlueCart . This all-in-one platform is designed to streamline processes and make selling easy. It lets business owners monitor their product catalogs and sales, manage and fulfill incoming orders, and communicate with customers on the fly.

B2B eCommerce platforms are vital tools in growing your B2B business. Now that you know what to look for, you can find a platform that is robust, but cost-effective to help grow your business. B2B Marketplaces are another viable option for growing your business.

B2B Wholesale Marketplace

A wholesale marketplace is a B2B eCommerce platform that connects wholesale suppliers to wholesale buyers. These marketplaces are growing at an exponential rate and opening new channels of opportunity for small-to-midsize businesses. Most marketplaces also allow sellers to market, sell, invoice, and fulfill orders using a single platform. They're like a wholesale directory on steroids and help you learn how to find vendors and wholesale items to sell .

Most marketplaces also allow sellers to market, sell, invoice, and fulfill orders using a single platform.

The Basic B2B eMarketplaces

There are three basic types of eMarketplaces that each have their own services and structure.

The three types are:

  • Supplier-oriented marketplace. This model is also called e-distribution and is noted for having many buyers and few suppliers. It is good for building goodwill and loyal customers. Cisco runs one of the largest of these and sells more than $1 billion worth of network products each year.
  • Buyer-oriented marketplace. Also called e-procurement, this model has few buyers and many sellers. In this model sellers list competing products at different prices for buyers to bid on. GE's electronic bidding site, which goes by the name of GE TPN Post, is one of the biggest buyer-oriented marketplaces.
  • Intermediary-oriented marketplace. This fast-growing marketplace is called an e-exchange and features many buyers and sellers. It is owned by a third party that connects buyers to sellers for a small fee. It is the ideal solution for small- and medium-sized businesses. BlueCart is a great example of this type of marketplace that connects thousands of wholesale food suppliers and buyers.

Best B2B Marketplace

The best B2B trade marketplace varies based on industry and a business's needs. The key is to find a site that offers the tools you need to make informed decisions. You also want to make sure the user base is large enough to connect you with the best buyers and sellers. Vertical marketplaces are a great place to start.

For food wholesalers and those in the restaurant industry, the best B2B online marketplace is BlueCart. It's an all-in-one solution that lets sellers have control over every aspect of their sales.

You, Me, and B2B

B2B businesses are a major part of the world economy and are responsible for billions of dollars of sales each year. Running a successful one requires understanding B2B sales and marketing funnels, ecommerce platforms, and payment systems. Using the information we've shared above, you should have the tools you need to make your business grow.

Once you have all that under your belt, make sure to invest in quality eCommerce packaging and a fast eCommerce shipping team to ensure your customers get their products safely and quickly.

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  • What is B2B? Everything About Business to Business Model

The most common business models you’ve probably heard of are B2B, B2C, subscriptions, and  on-demand. These business models are unique in their ways and serve different audiences.

This post will focus on the B2B definition and every facet of this business model. So, what does B2B mean? Keep reading to find out!

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Business-to-Business (B2B) Meaning

B2B means business-to-business . It’s one form of a transaction or business model that occurs between two companies. The consumer is not involved in a B2B transaction.

Unlike consumer purchases, B2B transactions are more complicated than a simple purchase in an online store. They involve larger order quantities, negotiations, and the shipping and delivering large amounts of goods.

B2B companies keep many markets moving forward. Think about the last time you purchased an item from a major retailer. Regardless of what the product was, it likely came from a manufacturer who sold it to a supplier. This is a typical example of the B2B business model.

Even though the consumer is not involved in the B2B sale, it directly affects their shopping habits and what is made available to purchase in stores.

B2B Examples

If you find yourself Googling, “What is a B2B company?”Here are some common examples of B2B companies in various industries.

  • Wholesalers and manufacturers of goods
  • Wholesalers and retailers
  • SaaS companies selling a service to companies
  • Marketing agencies that help small businesses grow
  • Payment processing companies sell their services to retailers
  • Telecom service providers for businesses

Who do B2B Companies Sell To?

Business-to-business companies sell to a variety of companies and industries, including:

  • Private businesses
  • Wholesalers
  • B2C companies
  • Government groups and public entities
  • Direct-to-consumer organizations

Defining B2B Sales

This section answers the question, ‘What is B2B sales?’. Let’s jump in!

In 2022 alone, B2B ecommerce revenue reached $2 trillion  — the opportunities in this market are substantial.

Traditionally, B2B sales entail much higher transaction amounts, educated buyers (as they work for relevant companies), a lengthy approval process , and a much longer sales cycle.

Business-to-Business Service Challenges

Like any business model, B2B services have their own challenges and drawbacks specific to the market and customer base they’re serving. This includes:

Cash flow management

Customer loyalty, digital presence.

  • Sales process
  • Sales cycle

Working with other businesses means managing invoices, late payments, and various client payment windows. Some B2B companies bill in  30-day cycles, while others use 60 or  90-day invoice cycles.

Dealing with conflicts related to delayed client payments can be a significant deterrent for B2B companies. Without cash flow, purchasing inventory, paying bills, paying employees, and dealing with various business expenses is challenging.

Fostering customer loyalty takes time, energy, and consistency in any business model.

Since many B2B companies are subscription-based or offer a platform, customer loyalty is heavily influenced by the performance of these services. A business selling a platform must provide professional services, maintenance, and upgrades to ensure customer efficiency.

As B2B companies showcase their commitment to customer satisfaction , customer loyalty builds over time. Whether they’re selling a service, a platform, or products, improving the functionality and quality is  mission-critical for customer retention.

Establishing a solid digital presence online is essential for B2B companies to market themselves and sell products or services.

From a captivating website to interactive social media platforms, existing online is no longer an option for businesses — it’s a requirement. If you want to compete in the space, you must participate in the digital revolution.

Any B2B company should maintain a website with information on their products or services so potential customers can find them. Using best practices in SEO (search engine optimization), businesses can increase their search engine ranking amongst their potential customers.

Did you know that 95% of B2B businesses utilize social media? They advertise products, interact with customers, and perform lead generation. This shows how valuable a digital marketing strategy is for B2B companies, regardless of their industry or market.

Organized sales process

The sales process can be long and unorganized for many B2B companies. When relying on multiple people within an organization to make a decision, the process is daunting.

B2B sales reps can combat this long sales process by doing their research to find companies who are genuinely in need of their service or solution. B2B buyers are about 57% into their decision-making process when they engage with a sales team about a product, service, or platform. This leaves quite a bit of opportunity to close the deal, but the sales team must be strategic with a tailored solution for the company’s unique pain points.

The sales process is best organized into the following strategic steps:

  • Researching potential customers, competitor offerings, and market trends
  • Prospecting leads for sales pitches, demos, and exploratory calls
  • Assessing target customers to determine if your solution provides a fix
  • Pitching your service or products in a tailored way
  • Winning the sale
  • Following up with add-ons and other features of the product
  • Maintaining the relationship with the customer for referrals and additional business opportunities

How Does a B2B Transaction Work?

Three main types of B2B sales and transactions occur, including the following.

1. Supply chain sales

B2B companies sell supplies or equipment to other companies, like wholesalers or retailers. The purchase involves multiple stakeholders rather than a consumer purchasing one unit at a time.

The buying process may require more authorization, and multiple people are involved. Supply chain sales include medical or office supplies, equipment, clothing, and more.

2. Wholesale

Wholesale suppliers sell products like food and beverages to restaurants and stores at low prices. These companies turn around and sell the products directly to the consumer at a  marked-up price.

3. Service/Platform sales

From platforms that send SMS messages to payroll software and task management, B2B platforms and services are abundant for various companies. These purchases involve several organizational people, including a Sales manager, CTO, and even the CEO.

B2B vs. B2C: Key Differences

Now that you know the B2B sales meaning, it’s time to explore the key differences between B2B and B2C.

The primary difference between B2B and B2C is the customer. Where B2B serves other businesses, B2C involves businesses selling directly to consumers.

B2C sales typically include lower prices (i.e., when you shop at a retailer like Target), and the buying decisions come strictly from the consumer. Some B2C examples include:

  • Buying a  custom t-shirt through an ecommerce store
  • Purchasing a smartphone from a telecom provider like Verizon or AT&T
  • Buying goods from a farmer’s market

There are endless examples of B2C interactions, but the big picture is simple. Any time you as an individual purchase goods or services directly from a store or company is  considered B2C .

Other key differences between B2B and B2C include:

Salesperson involvement

With B2B sales, at least one (if not more) salesperson is involved in the process. Whether vetting new technology or researching a new product to add to your inventory, B2B requires more involvement on both sides.

B2C, on the other hand, doesn’t always require the help of a salesperson. You don’t need the influence of a salesperson when picking up groceries for the week. You may need help when shopping at a clothing store but already intend to buy, so a salesperson isn’t as necessary.

Transaction value

Some B2C purchases, like buying a home, a vehicle, or luxury goods like diamonds, have high transaction values. For the most part, the transaction value of consumer purchases is much lower when compared to B2B purchases.

Payment methods

In a  B2C transaction , the consumer pays the business upfront to purchase goods. In a B2B transaction, the sales and payment processes are much more drawn out. Potential customers often use the product or service on a trial basis to test the features and decide whether or not it’s what their business is looking for.

Final Thoughts on B2B

Business-to-business transactions keep the economy moving and help many industries and markets thrive. Without B2B, many products and goods we’re accustomed to having would not exist or be accessible for the everyday consumer to buy.

For more information on B2B, including our highly coveted marketing strategies , explore the Ecwid ecommerce blog. We share tons of resources, relevant content, and  How-To’s to ensure your business can thrive, no matter what you’re selling and where.

Upgrade your B2B business with an ecommerce solution that helps Learn more

  • B2B Marketing Guide: Strategy, Goals, Tactics
  • What is B2B Ecommerce? Platforms, Companies, Trends
  • B2B Software: Choosing the Right Software for B2B
  • B2B Websites: Best Practices with Examples

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About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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The New Rules of B2B Lead Generation

  • James Piacentino,
  • Mathias Bombardi

b2b business model wikipedia

Five ways sales teams can adapt to a new landscape.

Face-to-face meetings are back, but is that what clients are looking for? Companies need to update their lead generation strategies to make them more data-driven and more in line with what potential clients’ preferences. To adapt, companies should follow a new B2B sales playbook: 1) build the right team for the job, 2) create simplified content that articulates the firm’s industry offerings, 3) push the content to market, 4) have teams share relevant leads with sales, and 5) measure outcomes at multiple levels.

At the beginning of 2020, it was the norm for any respectable technology industry leader in business to business (B2B) sales to spend upwards of 80% of their time on the road and with clients. They would be on continuous lookout for new prospects and qualified leads through face-to-face interactions, taking potential clients to sporting events and chatting them up at annual conferences. Ironically, given the industry, not much science or tech was behind the development of pipelines or closing the deal.

b2b business model wikipedia

  • IG Ian Gross  is a go-to-market leader in the technology sector, having served in strategy and operations roles at LinkedIn, IBM and Boston Consulting Group. He has over a decade of experience conducting research, consulting for Fortune 500 clients and supporting enterprise sales teams in high-growth environments. Ian has an MBA from the University of Chicago, Booth School of Business and a BA from the University of Maryland.
  • JP James Piacentino is a Global Vice President, Products and Industry Solutions at SAP, where he leads a team focused on customer success.  Prior to SAP, James has helped build and scale two successful startups and continues to provide ongoing mentorship in Silicon Valley and Chicago for socially conscious, consumer and music industry startups. James has earned an MBA from Northwestern University, Kellogg School of Management in Evanston Illinois and is a published musician through ASCAP.
  • MB Mathias Bombardi is a Partner and leader in IBM’s Enterprise Strategy and Industry Transformation Unit spanning all client industries in key geographies. He has 15+ years of experience helping client executives at Fortune 500 and FTSE 100 telcos, media, financial service providers, high tech, natural resources, and the public sector. Prior to joining IBM, Mathias helped lead Booz Allen’s strategy and change capability area for the Financial Services market and supported the stand-up of Accenture’s corporate innovation program.

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B2B Business Model and How it works

Businesses are evolving. Unlike the past decade where businesses operated on brick and mortar stores, virtualization is the new norm. You do not need to have a physical shop to drive sales. All you require is a digital store where customers can access your products and place orders. 

Despite all these changes, one thing remains constant. Every business needs a model that they use to achieve its objectives. As an entrepreneur, you must come up with a way of operating your venture. B2B or business-to-business is one of the model e-commerce businesses is to run their operations. If you do not know how this model works, you are on the right page.

In this article, we cover what B2B is as well as how it works and its pros and cons. Thus, keep reading on to learn more about this model.

What is B2B Business Model?

For many entrepreneurs, selling to consumers is their objective. You develop products that you offer to your consuming customers. However, this is not the only way to operate your business. B2B business model is where businesses sell to other businesses or simply called business to business. It is a situation where a business offers its products to another business instead of selling them directly to the consumers.

Here, businesses make products destined for use by other businesses. You sell what you make to another business that can either use it to generate other products or sell the same product to the final consumers. So, this model does not involve transactions between a business and consumers.

How Does B2B Work?

Typically, B2B business involves transactions between one company/business to another business. Your company makes products or services for consumption in another company. For instance, your company can be a supplier of raw materials to company B which produces a given product. Or else, you might be selling products to wholesalers and retailers in bulk for them to sell them to the consumers.

In this model, your targets are other businesses and not consumers. This means that you must reach out to other businesses and offer convincing reasons to consider your goods or services. Say for example you offer business solutions. You need to convince the business owners or decision makers why and how your solutions will enhance their operations.

In most cases, the B2B model involves the use of proposals and procurements. Businesses require suppliers and solution providers for proposals. The engagement is also on a long-term basis rather than a single purchase.

Example of B2B Business

B2B business model applies in every stage of the supply chain or value chain . When a manufacturer orders raw materials to make a product from another company, this relationship involves two businesses. Also, when you source products from a wholesaler or supplier to sell in your retail store, you are applying the B2B model. So, there are many examples of businesses applying this concept in their operations.

Apple is a good example of a company using the B2B concept. As you know, Apple is a renowned high-edge smartphone. In developing their iPhones, Apple sources chips from Samsung. Without Samsung, Apple can have challenges in manufacturing its iPhones. Also, Apple has other B2B connections with companies providing semiconductors and other materials for making smartphones such as Micron Technology and Intel.   

Pros and cons of B2B Business Model

B2B model allows many businesses to operate and succeed in both physical and virtual arena. However, it is not perfect and has both pros and cons. Here they are:

Long-term engagement leading to customer loyalty

B2B model operates on long-term engagement. Both businesses agree to supply raw material or products/solutions for a given duration. This aspect enhances customer loyalty as the two have a mutual agreement. As the supplier, you have consistent sales as long as you retain the quality and dependability of your product and services. This aspect is hard to achieve in other models.

Easy to predict revenue

Since you have a long-term engagement, you can easily predict your revenue. You can determine with certainty the amount of revenue you’ll generate in a given period. With this, you can easily make conscious decisions and business plans. So, this model makes your business more secure as you will have customers for your products at any given time.

Short selling cycle

No doubt, selling to consumers can be a long process. The process involves a number of intermediaries. When you consider selling to consumers directly, you need a lot of time to clear your inventory. As you know, the longer the selling cycle or duration, the more expensive it becomes. You need to invest a huge amount in promoting your products and service when dealing with final consumers.

Unlike the business-to-consumer approach, the B2B model comes with a short-selling cycle. You sell your products or service to specific customers. You do not need to spend a lot of time money on marketing what you are offering. So, the short-selling cycle saves you money and time. 

Limited customer pool

By concentrating on businesses as your customers, you reduce your pool. Having a small customer pool can affect your sales and expectations. The small target poses a lot of challenges to beginners in securing their first customers. For this reason, many B2B businesses do not last for long due to the hardship of driving sales.

Long decision-making period

Unlike selling to customers, dealing with businesses is a complex affair. Businesses have long decision-making processes that involve several parties. First, you need to send a proposal. The business can take several weeks or months to respond to your proposal and accept the deal. This approach can hurt your expectations especially when patience is not your virtue.

As an entrepreneur, you can consider using the B2B business model in your venture. The model will work effectively when what you offer is suitable for other businesses. Also, you can consider this concept if you want a short-selling cycle by selling your products in bulk to other businesses.

However, you need to be aware of the hurdles to expect in your operations. The businesses can take a longer duration to accept your proposal. Nonetheless, when your business gets some grips, you’ll enjoy massive sales and long-term relationships meaning consistent revenue generation.  

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B2B Business Models: Exploring Examples, Types & Strategies

Discover what B2B business models are and explore various examples, types, and the benefits they offer in the e-commerce industry. Learn how B2B models can revolutionize the way businesses operate.

In today’s dynamic business landscape, companies are constantly seeking innovative approaches to drive growth and achieve sustainable success.

One such approach is the adoption of B2B (business-to-business) business models, which have gained significant traction in various industries.

This article aims to provide a comprehensive understanding of B2B business models, explore examples, types, and their specific applications in e-commerce, and highlight the numerous benefits they offer to organizations.

Table of Contents

  • What is B2B Business Models?

The foundation of B2B interactions

The key characteristics of B2B business models

  • How B2B models differ from B2C models

B2B Business Models Examples

  • Manufacturer-Distributor-Wholesaler model
  • Platform-based model
  • Subscription-based model

B2B Business Model Types

  • Direct sales model
  • Marketplace model
  • Value-added reseller (VAR) model

B2B Business Model in E-commerce

Leveraging technology for seamless transactions

Enhancing supply chain management through B2B e-commerce

B2B e-commerce platforms and marketplaces

Benefits of B2B Business Model

Streamlined processes and increased efficiency

Expanded market reach and customer base

Improved customer relationships and loyalty

B2B Business Models : Explanation

B2B business models refer to the strategies and frameworks that govern transactions between two or more businesses. Unlike B2C (business-to-consumer) models where the focus is on catering to individual customers, B2B models primarily revolve around fulfilling the unique needs and requirements of other businesses. Let’s delve deeper into the key aspects of B2B business models:

At the core of B2B interactions lies the concept of exchanging goods, services, or information between organizations. These transactions can involve manufacturers, wholesalers, distributors, retailers, or even service providers. B2B models facilitate the flow of products or services throughout the supply chain, ensuring businesses have access to the resources they need to operate efficiently.

B2B business models possess certain characteristics that set them apart from other types of business models:

  • Interdependence: B2B transactions are interdependent, relying on the collaboration and cooperation between businesses to meet their respective objectives.
  • Long-term relationships: B2B relationships often foster long-term partnerships, as businesses aim to establish trust and reliability with their counterparts.
  • Customization: B2B models emphasize tailoring products, services, or solutions to suit the unique requirements of business clients.

How B2B models differ from B2C models ?

While B2B and B2C models share similarities, they differ significantly in their focus and approach:

  • Target audience: B2B models target businesses and organizations as their primary customers, whereas B2C models target individual consumers.
  • Purchase volume: B2B transactions generally involve larger order volumes, given the business-to-business nature, while B2C transactions often consist of smaller quantities.
  • Decision-making process: B2B purchases often require more complex decision-making processes involving multiple stakeholders, compared to B2C purchases, which are typically made by individual consumers.

Let’s explore a few prominent examples of B2B business models that illustrate the diverse approaches organizations can adopt to drive success:

1. Manufacturer-Distributor-Wholesaler model

This traditional B2B model involves manufacturers producing goods and relying on distributors and wholesalers to reach a wide network of retailers. Manufacturers focus on production, while distributors and wholesalers handle logistics and distribution, ensuring products are efficiently delivered to retailers and, ultimately, end customers.

2. Platform-based model

Platform-based B2B models leverage technology to create digital marketplaces where businesses can connect and trade products, services, or information. These platforms facilitate transactions, streamline communication, and provide a conducive environment for businesses to collaborate and grow collectively.

3. Subscription-based model

The subscription-based B2B model offers businesses access to a wide range of products or services for a recurring fee. This model provides convenience, flexibility, and cost-effectiveness, allowing businesses to access the resources they need on-demand without large upfront investments.

B2B business models encompass various types, each catering to specific needs and preferences. Let’s explore some of the most common types:

1. Direct sales model

In the direct sales model, businesses engage in direct transactions with their clients, eliminating intermediaries. This approach allows organizations to have more control over the sales process, build stronger relationships with customers, and ensure better alignment with their specific requirements.

2. Marketplace model

Marketplace models provide a platform for multiple businesses to showcase and sell their products or services. These marketplaces act as intermediaries, connecting buyers and sellers, and fostering a competitive environment where businesses can reach a broader audience and expand their market reach.

3. Value-added reseller (VAR) model

The VAR model involves businesses purchasing products or services from manufacturers and adding value to them through customization, bundling, or integration with complementary offerings. Value-added resellers then sell the enhanced products or services to end customers, providing tailored solutions that meet specific business needs.

The rise of e-commerce has significantly impacted B2B transactions, revolutionizing the way businesses operate and interact. Here’s how B2B models have found their place in the realm of e-commerce:

B2B e-commerce leverages technology to streamline transactions between businesses. Through online platforms and portals, companies can browse catalogs, place orders, track shipments, and handle payments more efficiently, enhancing the overall purchasing experience.

B2B e-commerce enables organizations to optimize their supply chain management by automating processes and reducing manual intervention. This leads to improved inventory management, better demand forecasting, and enhanced collaboration between suppliers and buyers.

E-commerce platforms and marketplaces tailored for B2B transactions have emerged, offering businesses a dedicated space to engage in trade. These platforms provide secure environments, robust catalog management systems, and efficient order processing capabilities, enabling businesses to connect and conduct transactions seamlessly.

Implementing a B2B business model can yield numerous benefits for organizations. Let’s explore some of the key advantages:

B2B models often incorporate streamlined processes, optimized supply chain management, and automated transactions. This leads to increased efficiency, reduced operational costs, and improved productivity, allowing businesses to focus on core competencies and deliver exceptional value to their customers.

By adopting B2B models, businesses can expand their market reach beyond traditional boundaries. Collaboration with other businesses, strategic partnerships, and access to diverse networks enable organizations to tap into new

markets, target larger customer segments, and unlock new growth opportunities.

B2B models emphasize building strong relationships with business clients, fostering trust, and delivering exceptional customer experiences. By understanding and addressing specific business needs, organizations can cultivate loyalty, drive customer retention, and benefit from long-term partnerships that provide stability and consistent revenue streams.

What are the 4 types of B2B models?

There are several types of B2B (business-to-business) models that organizations can adopt to facilitate transactions between businesses. Four common types include:

  • Direct Sales Model: In this model, businesses engage in direct transactions with their customers without intermediaries. This allows for greater control over the sales process and enables organizations to build stronger relationships with their clients.
  • Marketplace Model: Marketplace models provide a digital platform where multiple businesses can connect and conduct transactions. These platforms act as intermediaries, connecting buyers and sellers, and often offer additional services such as payment processing and logistics support.
  • Subscription Model: The subscription model involves businesses offering products or services to customers for a recurring fee. This allows businesses to provide ongoing value, build long-term relationships, and generate predictable revenue streams.
  • Value-Added Reseller (VAR) Model: In the VAR model, businesses purchase products or services from manufacturers and enhance them by adding value through customization, bundling, or integration with complementary offerings. They then resell the enhanced products or services to end customers.

What are the 7 major B2B business models?

B2B business models vary depending on industry, market dynamics, and specific business objectives. While there are numerous models to consider, here are seven major B2B business models:

  • Manufacturer-Distributor-Wholesaler Model: Manufacturers produce goods and rely on distributors and wholesalers to reach a wide network of retailers and end customers.
  • Platform-Based Model: Platforms create digital marketplaces where businesses can connect and trade products, services, or information.
  • Subscription-Based Model: Businesses offer access to a range of products or services for a recurring fee, providing convenience and flexibility to customers.
  • Value-Added Reseller (VAR) Model: Businesses purchase products or services from manufacturers, add value through customization or bundling, and then sell the enhanced offerings to end customers.
  • Direct Sales Model: Businesses engage in direct transactions with customers, eliminating intermediaries and allowing for more control over the sales process.
  • Franchise Model: Businesses expand their operations by granting franchises to other businesses, allowing them to operate under an established brand and business model.
  • Service Provider Model: Businesses offer specialized services to other businesses, catering to their specific needs and requirements.

Which B2B models should we use?

The choice of B2B models depends on various factors, including the nature of your business, target market, industry dynamics, and strategic goals. It’s essential to evaluate each model’s suitability based on your specific circumstances, such as product/service offering, customer preferences, and competitive landscape. Conducting market research, analyzing customer needs, and assessing your organization’s capabilities will help determine the most suitable B2B model for your business.

Is Alibaba a B2B model?

Yes, Alibaba is a well-known B2B model. Alibaba Group operates various online platforms, including Alibaba.com, which serves as a leading global wholesale marketplace connecting businesses. It enables businesses to trade products in bulk, find suppliers, and engage in B2B transactions across different industries.

Is Amazon a B2B?

While Amazon is primarily recognized as a leading B2C (business-to-consumer) e-commerce platform, it also operates a significant B2B segment called Amazon Business. Amazon Business offers a range of products and services tailored specifically for businesses, including bulk purchasing, business pricing, and streamlined procurement processes. It acts as a B2B model, connecting businesses with suppliers and facilitating transactions.

What is B2B delivery example?

B2B delivery refers to the transportation and distribution of goods and services from one business to another. It involves the efficient movement of products between suppliers, manufacturers, distributors, wholesalers, and retailers. An example of B2B delivery is the transportation of raw materials from a supplier to a manufacturing facility, where the materials are used to produce finished goods. Another example is the delivery of products from a wholesaler to a retailer’s store for sale to end customers. B2B delivery plays a crucial role in ensuring the smooth flow of goods within the supply chain, enabling businesses to meet the demands of their customers efficiently.

What is B2B sales examples?

B2B sales, or business-to-business sales, involve the selling of products or services from one business to another. Here are a few examples of B2B sales:

  • Software Solutions : A software company selling its software products or licenses to other businesses to enhance their operations, such as customer relationship management (CRM) software or project management tools.
  • Manufacturing Equipment : A manufacturer selling machinery or equipment to other businesses involved in production processes, such as industrial machinery used in manufacturing plants.
  • Consulting Services : A consulting firm offering specialized services, such as financial consulting, marketing strategy consulting, or IT consulting, to assist other businesses in improving their performance and achieving their objectives.
  • Office Supplies : A supplier selling office supplies, stationery, and equipment to other businesses, ensuring they have the necessary tools to operate effectively.
  • Wholesale Goods : A wholesaler selling bulk quantities of products, such as electronics, clothing, or food items, to retailers who then sell them to end customers.

What is B2B marketing strategy?

B2B marketing strategy refers to the plan and approach that businesses employ to promote their products or services to other businesses. Unlike B2C marketing, which targets individual consumers, B2B marketing focuses on building relationships, delivering value, and addressing the specific needs of business clients. Some key elements of a B2B marketing strategy include:

  • Target Audience Identification : Clearly defining the target market and understanding the characteristics, pain points, and preferences of businesses within that market.
  • Relationship Building : Establishing and nurturing relationships with key decision-makers and influencers in target businesses through personalized communication, networking, and providing tailored solutions.
  • Content Marketing : Creating and distributing valuable and informative content, such as blog posts, whitepapers, case studies, and videos, to educate and engage potential B2B customers.
  • Lead Generation : Implementing strategies to attract and convert leads into customers, utilizing tactics such as email marketing, search engine optimization (SEO), social media advertising, and industry-specific events.
  • Thought Leadership : Positioning the business as an industry expert through thought leadership initiatives, including publishing authoritative content, participating in industry events as speakers, and engaging in relevant industry forums.

What are the 4 pillars of B2B marketing?

The four pillars of B2B marketing encompass key aspects that contribute to a successful B2B marketing strategy. These pillars are:

  • Segmentation : Segmenting the target market based on relevant criteria such as industry, company size, location, and specific needs. This allows for more precise targeting and personalized marketing approaches.
  • Targeting : Selecting specific segments or businesses within the market that align with the organization’s objectives and have a higher likelihood of becoming valuable customers.
  • Positioning : Developing a unique value proposition and positioning the business as the preferred solution provider within the target market. Effective positioning highlights the organization’s strengths, expertise, and ability to address customer challenges.
  • Messaging : Crafting compelling and persuasive messaging that resonates with the target audience. This includes clearly communicating the value and benefits of the products or services, addressing pain points, and differentiating from competitors.

By focusing on these pillars, businesses can develop a robust B2B marketing strategy that effectively reaches and engages their target audience, driving business growth and success.

Q: What are some key elements of successful B2B business models? A: Successful B2B business models often incorporate efficient supply chain management, robust technology infrastructure, effective communication channels, and a customer-centric approach.

Q: How can B2B models drive innovation and collaboration? A: B2B models encourage collaboration between businesses, facilitating knowledge-sharing, resource pooling, and joint innovation efforts that lead to the development of new products, services, or solutions.

Q: Can B2B business models be applied to service-oriented industries? A: Absolutely! B2B models are not limited to product-based industries. Service-oriented businesses can also adopt B2B models by catering to the unique needs of other businesses and providing tailored services.

Q: Are B2B e-commerce platforms secure for conducting transactions? A: B2B e-commerce platforms prioritize security and implement robust measures to protect sensitive data, ensuring secure transactions and maintaining confidentiality.

Q: How do B2B models contribute to sustainability and environmental responsibility? A: B2B models enable businesses to optimize their supply chains, reduce waste, and implement sustainable practices. By streamlining processes and reducing resource consumption, B2B models contribute to environmental responsibility.

Q: Can B2B business models be combined with B2C models? A: Yes, many businesses adopt hybrid models, combining B2B and B2C approaches to cater to both business and individual customers, providing them with a seamless and integrated experience.

B2B business models have emerged as a powerful strategy for businesses to navigate the complex and ever-evolving landscape of commerce. By focusing on meeting the unique needs of other businesses, B2B models foster collaboration, drive innovation, and unlock new avenues for growth. In the e-commerce realm, B2B models have transformed the way organizations conduct transactions, optimize supply chains, and enhance customer relationships. By embracing B2B business models, companies can position themselves for success, expand their market reach, and build long-lasting partnerships in the dynamic world of business.

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Understanding Business Models: Types of B2B Model

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What is a B2B Business Model? 

B2B business model is a theoretical framework that serves an organization and describes how it operates and makes money. Every organization, regardless of size or turnover, has a business model.

Generally, B2B models consist of some key elements, such as the nature and specifications of the goods or services, resources and partners, methods of marketing, the target audience, and the method of payment. 

Key Elements of a B2B Business Model 

Primary partners .

The main stakeholders in your B2B marketplace are referred to as “primary partners.” The main players in a B2B marketplace are the companies that place large purchases and the suppliers and manufacturers who receive and meet those demands.

Types of Goods or Services & USP

Types of Goods or Services & USP

This involves the types of products and services in the given B2B marketplace. The products your suppliers and manufacturers provide are included in this section. Your business model is majorly defined by the type of products and services your company deals with. 

Unique Selling Proposition is also an essential aspect of the B2B model. It ensures quality and authenticity.

Primary Resources

The term “resources” refers to the crucial knowledge that is provided to various stakeholders in order for them to make informed decisions and actions. A B2B marketplace’s assets could include a list of suppliers or manufacturers for buyers, which allows companies to see what options they have when making a purchase.

Links to manufacturer profiles, rankings, comments and reviews, contact details, shipping details, are also included in this category. This is also relevant for sellers who gain permission to create profiles and mention their goods.

Customer Relationship 

Safe dissemination of information in a regulated way on the network is required for smooth customer relations. The platform must ensure the security of all data associated with the main stakeholders in the online B2B marketplace. This concerns privacy, protection, and welfare of user login information or payment account information.

Cost Structure 

Customizable packages are the key. The payment systems and invoices and billings issued on the B2B marketplace are controlled by the pricing structure. It must provide the option to choose from a variety of tailored payment packages, such as a discounted price on larger purchases, a personalized discount strategy, and so on.

Types of B2B Business Models 

Types of B2B Business Models

A B2B company can be divided into several categories. This results in various types of B2B business models. Each B2B company receives assistance from B2B suppliers or manufacturers, as well as investors. Salary and tax payment, research & innovation, website design, SEO services, content marketing, telesales, human resource and recruiting, marketing and promotion, are all examples of B2B business models in action.

A B2B company can easily engage with other businesses using the internet. They may use online channels to illustrate their goods and services, their USPs, and advantages. Some of the major types of B2B Business Models are- 

Buyer-Centric Model 

Because of the higher percentage of sales, this type of B2B model is mostly used by large national or multinational corporations. The buyer creates a platform where suppliers and distributors can quote their services. The sellers approach the customer with numerous quotes and negotiations in order to make them understand the advantages of their services and what makes them different and the better option. Finally, it is up to the buyer to choose the best-suited agency based on the requirements and expenditure. Example- Target and Walmart.

Customer-Centric Model 

This is a type of B2B model that applies to a specific business form in which buyers have fair market value even after the transaction has occurred. This method is used to retain loyal clients in order to do successful business with them again in the near future. Customers are the priority here, and they also have a huge impact on company activities as well as the businesses that interact with them. Example- Amazon and Flipkart.

Intermediary-Centric Model 

This is a well-known B2B model that offers a portal for suppliers, manufacturers, and buyers to connect, communicate and deal with one another. The mediators contribute to the development of this portal. In exchange, the intermediaries receive a reasonable share of the fee from the relevant parties. An online marketplace isn’t just an excellent outlet, but it also aids in the growth of several significant companies.

To Summarise

All the major types of B2B models share some common advantages. Stability and loyalty are the key aspects and advantages when it comes to the B2B marketplace. In B2C, customers can change a brand easily and without having to think twice. While in B2B, the decision-makers of a company prefer to stick to the same organization or supplier. In the B2B marketplace, the seller-buyer relationship develops and strengthens with time. 

Businesses that depend on other businesses for products and services are not as unpredictable as the consumers we see in B2C models. Both sides know each other, and the buyer and the seller rely on each other for the smooth and successful running of their respective businesses. 

B2B business models also help in reducing the overall budget and provide better and reasonable deals. Almost every major type of B2B business model is beneficial and successful. 

Global Trade Plaza is a leading name in the online B2B Marketplace. They connect exporters , manufacturers, buyers, and suppliers from India and worldwide. They also provide their clients with excellent lead generation and digital marketing services. 

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E-Commerce C2C, C2B, B2C and B2B business models differences

-->The development of Information and Communication Technologies (ICT) and the growth of the Internet in recent years has changed the life and economy of society, and today, e-commerce business models are moving the world.

b2b business model wikipedia

The major changes in sales and marketing models are a response to new needs and consumption habits, which year after year have been adapting to faster and easier for consumers.

According to Statista , by 2020, almost 90% of the world’s population will have made purchases on the Internet , reflecting the growing importance of technology for business, driving a significant change in the organization of companies and promoting their participation in the digital era.

The development of technologies such as process automation, cloud computing and the Internet of Things (IoT) brings significant benefits to companies such as cost reduction, optimization of operations and improved customer experience.

In this way, technological advancement drives greater operational efficiency in companies and enables experimentation with new eCommerce business models , here we will explore each of these.

Learn how to maximize eCommerce success via operations monitoring and support .

Table of Contents

What are e-commerce business models?

E-commerce business models explain the relationship between companies and their direct customers for the purchase and sale of products remotely over the Internet:

  • Mobile applications : Apps specifically designed for mobile devices to facilitate shopping. Examples include the Amazon shopping app, the eBay app, and brand-specific apps like the Nike or Adidas apps.
  • Online stores : Websites set up by businesses to sell products or services. Examples include BestBuy.com, Zara.com, and countless others.
  • Social networks : Platforms like Facebook, Instagram, and Pinterest where businesses can set up shops or run ads to direct users to their online stores.
  • Email Marketing : Businesses send promotional emails to subscribers or potential customers, often with links to purchase products or special offers.
  • Chatbots and Virtual Assistants : Automated systems or AI-driven helpers on websites and apps that assist users in shopping, answering queries, or directing them to purchase pages.

As eCommerce business models leverage the advantages of the Internet to boost sales beyond the physical limitations of traditional commerce, they also face the challenges associated with security and quality assurance.

Thus, the two major drivers of eCommerce businesses are trust and customer loyalty.

C2C Model: Consumer to Consumer

The C2C e-commerce model allows consumers to conduct buying and selling transactions directly with each other, without business intermediation, through digital platforms.

It has established itself as one of the most popular eCommerce business model s because it is simple and low-cost, and it allows for the sale of used products such as clothing, electronics, and furniture. This channel is also used for promoting services, exchanges, and product auctions.

In this business model, logistics and customer service are generally managed by the seller independently, which has driven the rise of some C2C platforms such as:

  • eBay : One of the most well-known online auction and shopping websites where individuals can buy and sell a variety of goods and services worldwide.
  • Craigslist : A classified advertisements website with sections dedicated to jobs, housing, for sale, items wanted, services, and more.
  • Etsy : A platform focused on handmade or vintage items and craft supplies. It’s a favorite among artisans and crafters.
  • Facebook Marketplace : A feature on Facebook that allows users to list items for sale, and potential buyers can browse these listings and contact sellers.
  • Poshmark : A social commerce platform where users can buy and sell new or used clothing, shoes, and accessories.
  • OfferUp : A mobile-first platform that allows users to buy and sell items locally.
  • Vinted : A platform dedicated to second-hand fashion, allowing users to sell, buy, or swap clothing items.
  • Depop : A social shopping app where individuals can buy and sell unique fashion items, often vintage or second-hand.

These platforms have made it easier for individuals to connect with potential buyers, facilitating peer-to-peer transactions and promoting a more circular economy.

C2C Advantages and disadvantages

eCommerce business models are most commonly used by retailers, entrepreneurs or for those who have limited merchandise and do not manage a brand.

Here are some advantages of C2C business:

  • Ability to sell products that are no longer needed or used.
  • Allows to generate extra income.
  • Lower prices.
  • Possibility of getting discontinued, old or unique products.
  • Can be started with little capital.
  • Direct communication and transactions.

Some disadvantages of C2C businesses are:

  • Credibility, since the customer may or may not have a guarantee or support during the transaction.
  • Increased competition.
  • It is a business model susceptible to scams.
  • Difficulty in resolving disputes.

Some valuable tools for e-commerce, learn how to boost your business with CommerceTools and ChatGPT .

C2B Model: Consumer to Business

Unlike the traditional B2C model, the C2B business model allows consumers to offer their products and services directly to companies . In this scheme, it is the consumers themselves who dictate the commercial conditions such as price, terms and form of payment.

A common modality is where professionals such as designers, illustrators, programmers or even influencers use C2B platforms to offer their services independently to support specific needs that companies may have.

Although it is not limiting, it is common for this business model to work through platforms that function as intermediaries. Some C2B platforms are:

  • Upwork : One of the most popular platforms where freelancers from all over the world, including designers, programmers, and writers, offer their services to companies and entrepreneurs.
  • Fiverr : Similar to Upwork, Fiverr allows professionals to offer their services in packages or “gigs”. It’s especially popular among graphic designers, musicians, and voice-over artists.
  • 99designs : Specifically for designers, where companies post their design needs and designers submit their proposals. In the end, the company chooses the design they like the most and pays the selected designer.
  • Influencity : A platform that connects influencers with brands. Influencers can register, showcase their stats, and be contacted by companies looking to promote their products or services.
  • C2B Solutions : A platform that focuses on connecting consumers who have innovative solutions with companies seeking those solutions.
  • Kickstarter : Although it’s better known as a crowdfunding platform, it allows inventors and creatives to present their projects to a global audience, and companies often back projects they find interesting or useful.

These platforms have revolutionized the way professionals and consumers interact with businesses. The C2B model has empowered individuals, allowing them to set their own terms and conditions, and has provided companies with a wide range of talents and solutions to their specific needs.

C2B Advantages and disadvantages

The C2B business model has gained popularity as the demand for remote work increases, making it an attractive model for small businesses and new professionals.

Before starting in the C2B business, its advantages and disadvantages should be known.

Advantages of the C2B model:

  • Viable option to generate extra income.
  • Possibility to trade products or services without forming a business.
  • Access to a global network of professionals and companies.
  • Improved value for money.
  • Savings in fixed contracting costs.

Disadvantages of the C2B model:

  • Risk of non-compliance.
  • Dependence on intermediary platforms.
  • No control over the process, deadlines and quality.
  • Greater competitiveness.
  • Problems for the integration and follow-up of tasks.

B2C Model: Business to Consumer

Of the e-commerce business models, B2C, from business to consumer, is the most common and is used by companies, from the smallest to giants like Amazon and Netflix.

Given its characteristics, the B2C business is usually focused on the mass consumer market . Therefore, the priority is to work based on new needs and ensure that the product purchase and delivery process is increasingly fast and effective.

According to Investopedia , there are 5 B2C business models:

  • Intermediaries : Where a company acts as an intermediary between consumers and product or service providers.
  • Community-based B2C : Here, companies use communities to build relationships with consumers who share interests, sharing relevant content, promoting interaction, and obtaining feedback.
  • Subscription : The company charges consumers a fee to access its products or services.
  • Direct : Where companies sell their products or services directly through their website.
  • Advertising-based B2C : This is a type of marketing where ads are used to direct traffic to the landing page. Its goal is to increase brand awareness, generate leads, and drive sales.

B2C Advantages and Disadvantages

For companies looking to reach a large number of consumers, the B2C model may be the right choice. However, factors such as audience, budget, and inventory must be considered.

Here are the advantages of B2C business models:

  • Convenience and speed for consumers.
  • Reach a wide audience.
  • Adaptation of products and marketing to consumer preferences.
  • The B2C model is efficient for achieving business growth.

Among the disadvantages of B2C business models are:

  • It may require significant costs and investment.
  • B2C companies are subject to regulations.
  • Consumer mistrust regarding data security and privacy measures.

Intelligent search and optimization technology can do a lot for your digital business. Here’s the basics on e-commerce search technology, AI, and ChatGPT. How can they benefit your business?

B2B Model: Business to Business

B2B e-commerce business models refer to commercial transactions that are conducted directly from business to business, without intermediaries.

Participants in B2B eCommerce typically include:

  • Wholesalers : Businesses that sell products in bulk to other businesses, which then resell to the end consumer.
  • Manufacturers : Companies that produce goods and sell them to retailers or other businesses.
  • Distributors : Entities that buy products from manufacturers or wholesalers and distribute them to retailers or other businesses.
  • Software and Technology Providers : Companies that offer software solutions, platforms, or tech services to other businesses.
  • Supply Chain Management Companies : Businesses that manage or provide logistics, transportation, and supply chain solutions for other businesses.
  • Bulk Raw Material Suppliers : Entities that provide raw materials, such as metals, chemicals, or agricultural products, to manufacturers or producers.
  • Industry-specific Equipment Providers : Companies that sell machinery or equipment tailored for specific industries, like construction or manufacturing.
  • B2B Marketplaces : Platforms like Alibaba or ThomasNet where businesses can list and sell their products to other businesses.
  • Consultancy and Business Services : Firms that offer expert advice or services in areas like management, finance, or marketing to other businesses.
  • Service Providers : As you mentioned, these are businesses that offer specialized services to other businesses, which can range from IT services to HR solutions.

Companies engaged in B2B e-commerce provide services or goods that other businesses use as inputs for their operations, such as: raw materials, logistics, software, human capital, and consultancy.

Transactions in B2B commerce do not involve consumers or the general public. Moreover, the companies that participate in this trade operate on a large scale, so B2B transactions tend to have higher value and complexity.

B2B Advantages and Disadvantages

According to Shopify , by 2030 the B2B e-commerce market is expected to grow by 20%, creating more opportunities for businesses worldwide. This growth will be driven by several factors, such as the adoption of digital technologies, globalization, and the increasing demand for specific products and services.

B2B e-commerce offers a number of advantages for businesses, including:

  • Long-term business relationships.
  • Greater efficiency by implementing automation in management and business processes.
  • Streamlining the purchasing and shipping process of products.
  • Higher transaction volume.

Disadvantages of B2B e-commerce:

  • Requires initial investment, personnel, and web development.
  • May involve multiple parties for the negotiation process.
  • Companies may need to use advanced technology and integrated systems.
  • Transactions are subject to regulations.

E-commerce Models: Understand the differences between C2C, C2B, B2C, and B2B

Each of the e-commerce business models has its own peculiarities. In the following comparative table, we will describe the main differences of the four most commonly used models today: C2C, C2B, B2C, and B2B.

Source : NULogic

Did you know that ChatGPT is impacting digital commerce? Here are the details.

E-commerce Business Models – Conclusion

E-commerce is transforming the way individuals and businesses exchange products and services. Its evolution is due to the integration of processes into the digital ecosystem through emerging technologies such as blockchain , artificial intelligence, machine learning, and virtual reality.

This evolution has given rise to a new industry with new types of jobs and disruptive ways of marketing. Although its importance is implicit, we list 3 reasons that have led eCommerce to transform the world :

  • It offers businesses a new way to reach consumers.
  • Consumers have greater convenience and flexibility during the purchasing process.
  • E-commerce helps businesses reduce costs and improve efficiency.

Given its growing global adoption, it is essential for companies to adopt technological solutions that put them at the forefront of digital transformation because the future of commerce is increasingly anchored to platforms, applications, and digitized business models.

At NULogic , we are committed to boosting the growth of your eCommerce. We have a multidisciplinary team that will guide you in implementing technological solutions for your business.

Reach out to us at NULogic , and let’s take your eCommerce to the next level together! -->

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Everything You Need to Know About B2B Business Models

Understanding B2B Business Models

What is a B2B Business Model?

Let’s start with what B2B business models are. It is a conceptual structure that supports a company and explains how it is functioning, and making a profit. Every company has a business model irrespective of its size and turnover.

Mostly, business models consist of a few basic things, such as the design and details of the products or services, followed by methods of selling and finding the target audience for the same and concluding with how the consumers will pay and the company will benefit out of the same.

In this blog, we will primarily focus on Business-to-business or B2B business models and how it works. We will cover almost everything related to them. To know, please keep scrolling down.

Intermediary Centric Model

Managed b2b model.

With the rise of technology, B2B models have become extremely common and we often come across phrases like B2B services and B2B sales. It mainly refers to transactions or business activities between two companies. It involves one company selling products or providing services to another company. In simpler language, a company is another company’s consumer. The model is significantly different from Business-to-customers or B2C models. If you own a company that sells products or services to another business, then it has a B2B model.

Types of B2B Businesses

Types of B2B Business model

Like every other business types, a B2B business can also be classified into a few categories. Each company is supported by B2B providers or suppliers as well as partners. Various types of B2B business models work in several sectors such as payroll and tax, research and development, webpage designing and SEO services, call centers, human resource and recruitment, marketing and advertising, etc. As you can see, it has a wide range of coverage.

With the help of the internet, a B2B business can easily approach other companies out there. They can explain their products/services and the benefits of using them through online platforms. In most of these models, both parties have negotiating power to some extent.

So here are a few types of B2B models.

Customer-Centric Model

Customer centric model

This is a type of model that refers to a particular business type where the customers have equal value even after the sale has taken place. This particular approach is applied to keep the existing customers in hand to do profitable business from them again in the future. Here customers are the main priority and they have a significant influence on the business operations as well as the brands that engage with them.

The best example to cite this is Amazon and Flipkart. Both the leading eCommerce giants follow a customer-centric approach towards retaining their loyal customers. It takes years of reliable service and value offered to every customer which has gained such a level of engagement. 

Buyer Centric Model

This model is mainly used among the big corporate companies as they have a higher rate of purchases. Here the buyer sets a portal where the sellers and providers quote their ways. The sellers approach the buyer with different quotations and various bribing words to make them understand the benefits they are eligible for providing. Then in the final stage, it is the buyer’s call to choose the most suited company regarding its specifications and budget.

Buyer centric model

The best example that can be cited for this type of business is Walmart. Walmart has its business all across the globe and influences a lot of suppliers based on the locations. Thus Walmart has to set up standards of supplies and the suppliers abide by it. Generally, bidding is placed among suppliers of the local region and the highest bidder gets to supply for the organization. 

Intermediary Centric Model

This is one of the popular B2B models, which provides a common platform for both the sellers and buyers to interact and transact with one another. This common platform is formed by intermediaries. In return, the intermediaries get their fair share as commission from the parties that are involved. Many times the buyers miss out on the relevant products that are available in the digital market. A third marketplace is not only a great additional platform but also helps in driving out many important businesses.

For instance, eBay and OLX bring you a platform where you can connect over with potential buyers for your product or service. You agree to the terms of the commission that these third-party vendors would charge. For every transaction made or sale that happened, the intermediate earns a certain sum of money. 

Now let’s focus on some real-world examples so that you get a clear idea about B2B businesses.

B2B Models that Can Help in Connecting with Your Trading Partners

The direct connection b2b model.

This model outlines the process in which your business is connected directly to all your trading partners for transferring electronic documents amongst them. The IT organization connected with your business is considered to be responsible for all sorts of business-related tasks like translation, tracking of all documents, assisting technical support, and mapping. Once the community grows under this model, the immediate priority goes onto continual monitoring of communications and managing trade partner calls to resolve their issues quickly.

Network B2B model

The inception of this model came into the picture when the direct model resulted in multiple complexities. Thereby, the companies decided to execute exclusively via a B2B Service Provider, which was known to be a Value-Added Network (VAN), before the invention of the internet. Under this model, a single connection was established to the Service Provider who used protocols like AS2, SFTP, FTPS, FTP over VPN, RosettaNet. Similarly, the trading partners connected with the Service Provider by choosing the respective connectivity protocol that was most desirable as per the company’s requirements

Hybrid B2B model

The conjoined combination including the direct and network models gave birth to this particular model. In a motive to save on the Service Provider transaction fees, businesses will get in touch directly with their trading partners with whom they have the maximum volume of transactions through the medium of the internet. Doing this, the business is constantly benefitted from the Service Provider for the cause of trading with a huge number of lower-volume trading partners.

This model is a platform where the company outsources its entire B2B process requirements to an outside service provider and benefits by lowering the resource needs. This also cuts down the additional costs and complications of the process. The model works on a system that lets the Service Provider receive the business documents through a direct medium of your ERP system. It is then responsible for activities like mapping, translation, data centre operations, technical support, and document tracking. The Service Provider will deliver the ready documents to your trading partners directly or through the network.

So this was again another kind of subdivision when it comes to B2B businesses.

Advantages of B2B Business Models

Now let us explain the benefits of this type of business. There are lots of advantages when it comes to these kinds of B2B businesses.

Here are some of them. Please take a look.

B2B businesses witness more stability. Unlike B2C models, where customers can easily jump from one provider to another, business predictability is much better in B2B models.  The relationship between two business houses (buyer and seller) evolve with time. B2B companies can easily plan their revenue budgets accurately. Collaboration in the distribution channels have to lead to higher customer loyalty and that is a plus point for businesses in this field. Businesses relying on other businesses for products and services are not fickle like the customers we get to witness in B2C models. Both the parties have mutual understanding and the buyer relies on the seller for consistency in product or service quality, dependability, value, etc.

Moreover, the selling cycle is shorter as well.

Overall, B2B business models help in reducing overall expenses as well. This can be primarily attributable to advanced supply-chain management, lower chances of errors and undue expenditure.

Another pro feature of this model is that it depends on factual data for streamlining the entire process. The calculation of sales is much easier this way.

From the buyer’s point of view, they can get their products at a cheaper rate through online auctions. It is easier for them as they get so many estimates without even having to leave the office. There are so many types of B2B business models , which are highly beneficial.

However, it is true that despite all the above-mentioned advantages, there are some cons such as smaller customer pool, etc. But with the right plan, you can even overcome the same.

B2B Ecommerce

Now when we have mentioned the benefits of the B2B business model , let us provide some further information on B2B for e-commerce.

B2B E-commerce, which has witnessed a sturdy growth graph over the past few years, has the potential to provide optimum efficiency, which is very much required for a business to flourish. The buyer can get highly benefited from the improved quality of services as well as top-notch customer services.

Secondly, with B2B for e-commerce, there is better brand awareness. Its job is to spread the word about your business and it does the same with smart planning and execution. Your target audience would have a detailed idea about your company and its goals, products, and services, long term plan, etc.

It is needless to say that companies are highly benefiting from Ecommerce Revenue models as it is driving their sales volume. Entrepreneurs can enjoy meatier profits with this one. 

Organizations can also evaluate their marketing campaigns, ROE, product mix, customer sales effectiveness, and inventory turns through this.

Buyers can enjoy the customer-centric experience through B2B e-commerce and thus, the demand for the same never goes down.

A company’s sales team will gain traction from the launch of an e-commerce platform as it will increase its visibility to customer orders, history, etc.

It should also be noted that this facilitates business with multi-site capability.

We hope that now you know about the type of B2B models and the advantages. To know more about the same, kindly follow this blog section as we come up with new topics every once in a while.

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