What is B2B? Business model Business to business

What is B2B? What are the advantages of the B2B model? Is there any difference between B2B and B2C? All of the above questions will be answered through the following article of Viindoo. Follow along with us.

1. What is B2B?

In the B2B model, one business provides the company's products and services to another business organization. Customers of B2B businesses are often businesses and organizations, not individuals. And sometimes, a supplier on the buyer's side makes a transaction to support the company's business goals.

what is a b2b business modelB2B model

Some transactions in the B2B model will involve products and services that the whole company uses. These products and services can be computers, office furniture, business management software,...

If the product and service purchase transactions are large and complex, the product selection process will be different. At this time, the purchasing committee will be the department responsible for the purchase, including:

  • Business decision maker in the enterprise. This person may be the person in charge of the budget;
  • The person responsible for the technical or the person who controls, evaluates the product's potential; Individuals who have a great deal of influence over a business act as input providers for decisions.

Many large merchandise purchases may involve a proposal request. At this point, the buyer will send the seller an offer to provide information about item details, price and terms.

Here are some common types of B2B companies:

  • Manufacturers design, create, and produce their own products. These products can be sold directly to businesses or indirectly through agents and wholesalers.
  • Retailers and agents are the middlemen of one company's sales to another business or organization. This sale can be done by many methods such as selling online, in person through physical stores or a combination of both.
  • Agencies and consultants provide advice, oversight and subcontracting to businesses. For example, an advertising agency is responsible for the management and execution of multi-million dollar advertising budgets for a consumer brand. A unit responsible for building and designing websites and mobile applications for businesses.

For example:

In the manufacturing sector, transactions between businesses are often done. For example, Samsung is one of the largest suppliers of components for the production of Apple-branded iPhones. Some other brands that also have B2B relationships with Apple are Intel, Panasonic and Micron Technology.

B2B trading is also an important part of the automotive industry. The individual parts of the vehicle are produced in many different factories. And car companies will buy those parts from other businesses to assemble the complete car. For example, a number of different parts and components such as electronics, tires, wheels, screws, steering wheels, etc. will be purchased by the car company from different suppliers.

B2B transactions are also quite common in the service sector. For example, services in property management, home, and industrial cleaning will often be provided to business customers, not individual users.

2. Features of B2B model

About the product

- High production value.
- Large production quantity.
- Complex technical requirements.

About transaction value

- B2B transactions are often high value.
- Purchase and sale agreements are usually through contracts or minutes.

About customers

- Have specific needs and clearly set costs.
- The B2B procurement process is specifically established.
- In the buying process, many individuals of the buyer are involved.
Few buyers and high loyalty.

About buying behavior

- B2B purchase decisions need to go through a rigorous and rigorous testing, evaluation and review process.
- Emotional factors have little influence on buying decisions.
- Professional buying method, following certain rules.
- The products traded are often in high demand in terms of quality.
- Commodity prices will often be the determining factor in the final decision of a B2B transaction.

About transaction time

- Usually long and volatile.

what is a b2b business modelThe B2B business model possesses many distinctive characteristics

>>>> Learn More: B2B and B2C What is that? Difference between B2C and B2B models

3. The most popular B2B business models today

After learning the characteristics of businessWhat is B2B?, we introduce the top 5 popular B2B models today:

  • Customer-centric B2B model: This model focuses mainly on customers. Customers are the subjects that have a profound influence on the business activities of the enterprise itself and related companies.
  • Intermediary B2B Model: This model provides a common trading platform for both buyers and sellers. This trading platform will usually be done by intermediaries.
    Transaction brokerage model: This model focuses on business units and imports sources from 3rd parties.
  • Service provider model: In the service provider model, businesses will often set up a website for business. This website provides products and services of the business to institutional or individual buyers.
    E-commerce floor model: This model creates a transaction space for e-commerce merchants and suppliers.
what is a b2b business modelMoving from B2B to B2B2C

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4. Advantages and disadvantages of the B2B model

- Convenient for shopping.
- High profit due to bulk sale.
- The B2B model has many opportunities to grow in the market.
- High security.
- Requires complex process setup.
- Skip the opportunity to sell to individual customers.
- Requires B2B sellers to have good skills. people with good B2B sales skills.
- Need to invest a lot in technology resources.

5. The shift from B2B to B2B2C

B2B2C is a business model with cooperation between two businesses (B2B) to sell products and services to the end consumer. This model is a variant of B2B, taking advantage of all the advantages that B2B and B2C bring. B2B2C is gradually becoming a trend in the market today.

b2b modelMoving from B2B to B2B2C

Examples for B2B2C model are intermediary e-commerce platforms such as Sendo, Shopee, Lazada,...

In the above post, Viindoo helped your business to explain the model question What is B2B. Hopefully, the above information will help you have a better overview of this business model and future shifting trends. Follow our next articles to learn more about effective business models.

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What is B2B? Business model Business to business
Jun Nguyen March 16, 2023