B2B, business-to-business, BtoB or inter-business commerce
Do you sometimes have trouble distinguishing B2B from B2C, D2C or C2C? Discover in this article the specific characteristics of B2B and a lot of tips to consolidate your business-to-business strategy!
B2B Commerce: definition
B2B commerce is an abbreviation of business-to-business. It describes all commercial activities that two or more companies have with each other. In other words, B2B commerce encompasses business-to-business transactions, whether it's for selling a service or a product.
Differences between B2B and B2C commerce
Purchasing managers, despite being consumers outside of the business context, take a different approach when placing an order with another company.
- Ordering in batches rather than by the unit
- Seek preferential treatment and quantity discounts
- Customization of products or services
- Tailored to the specific needs of the organization
- Demand fast and efficient customer service while being personalized
- Purchasing process based on business needs
- Calculated and thoughtful decision rather than impulsive
- Wish to have access to the complete characteristics of the product
Main sectors of activity in B2B
Many companies may opt for a B2B strategy rather than a B2C one. Here are the top 4 industries that regularly engage in B2B.
Manufacturers
Manufacturers, also known as fabricators, are companies or factories in charge of making products. While a manufacturer can both create and market its own products, they regularly make the decision to deal with distributors who will handle this crucial step. In addition, many companies that create and sell goods decide to subcontract the manufacturing of their products to a manufacturer in order to reduce their production costs.
Here are 2 examples of B2B transactions:
- A sportswear company that chooses to have its products manufactured by a local factory.
- A company that designs and manufactures residential quality windows that deals with different hardware stores for sale to customers.
Wholesalers
Wholesalers are companies that buy in large quantities from different suppliers in order to be able to resell their merchandise to other companies like a retailer.
Here is an example of a B2B transaction:
- A business that buys from several suppliers for auto parts and then resells those parts to dealers at competitive prices.
Distributors
An intermediary between the manufacturer and the final consumer, the distributor is responsible for marketing the products in order to make them accessible. A distributor can also act as an intermediary between the manufacturer and retailers by offering shorter lead times or the possibility of purchasing smaller quantities than directly from the manufacturer. The distributor role can be played by different types of organizations such as a wholesaler or a retailer.
Here is an example of B2B transactions:
- A company that specializes in distributing pet food from several different companies and resells to different franchises of a pet store its products.
Software as a Service (SaaS)
A technology company that provides licenses and access to its software while providing maintenance and upgrades to its service. This type of solution requires a recurring monthly or annual subscription in order to use the technology.
Here is an example of a B2B transaction:
- A company that offers an e-commerce platform that allows a clothing store to sell its products online in Canada and abroad.
Why choose a B2B strategy
Unlike an individual who has a generally shorter decision making process and sometimes makes impulse purchases for lower value goods, the purchasing process for a company is thoughtful, budgeted and can involve several people in the decision making. Since the time between consideration and purchase can be longer to complete, the purchase volume is higher and the service can be customized to the customer's needs, the company has the opportunity to create a much stronger and more trusting relationship with each buyer. This relationship of trust can be built not only through personalized support by a salesperson, but also through various marketing techniques.
How to be successful with a B2B strategy
Retaining customers by creating quality and useful content through an inbound marketing strategy is essential to stay on their minds until they are ready to make their decision. The digital transformation of business activities is having an increasing impact on sales processes. Thanks to the multitude of information available on the Internet and the word-of-mouth that has taken on a whole new dimension on social networks, each individual is able to know the specifics of products or services, their strengths as well as their weaknesses, and the companies offering a similar product. A buyer is therefore much more informed than before and will often have made his decision to do business with a specific company well before the first contact.
Providing a personalized and seamless online experience is part of the key to success when choosing a B2B strategy. According to a study conducted by McKinsey & Company, businesses with an e-commerce site that offers an exceptional user experience double the likelihood of being chosen as a supplier.
Consolidate your B2B strategy with eCommerce
More and more companies want to place their orders online to simplify and optimize their purchasing process. An e-commerce is an extremely powerful management and sales tool since it allows you to make available all your products and their characteristics in addition to gathering your customer data in one place. That's why many companies that rely on a B2B strategy are going digital.
Doing B2B & B2C business
Don't limit yourself to one strategy! The development of new technologies and eCommerce solutions now allows you to choose several strategies simultaneously. Personalize your customers' experience with an eCommerce that will let you segment your customers into different groups.
