B2B (business-to-business), a type of electronic commerce (e-commerce), is the exchange of products, services or information between businesses, rather than between businesses and consumers (B2C).
A B2B transaction is conducted between two companies, such as wholesalers and online retailers. In most B2B business models, each organization benefits in some way and typically has similar negotiating powers.
B2B is conducted via different categories of websites, such as the following:
Company websites. The target audience of a company website is the business clients and employees of other businesses. Think of B2B websites as round-the-clock mini-trade exhibits. Sometimes, a company website provides an entrance to an exclusive extranet, available only to customers or registered users. Some company B2B sites sell directly from the B2B website to other businesses.
Product supply and procurement exchanges. These exchanges allow a company purchasing agent to shop for supplies from multiple vendors, request proposals and, in some cases, bid on products. At times called e-procurement sites, some serve a range of industries while others serve a niche market.
Specialized or vertical industry portals. These portals provide dedicated information, product listings, discussion groups and other features for specific businesses. Vertical portal sites have a broader purpose than procurement sites, although they may also support buying and selling.
Brokering sites. These sites act as an intermediary between service providers and potential customers that need their specific services, such as equipment leasing.
Information sites. Sometimes known as infomediaries, these sites provide information about a particular industry to companies and their employees. Information sites include specialized search sites and those of trade and industry standards organizations.
Many B2B sites fall into more than one of these groups. Models for B2B sites are still evolving, however.
Another type of B2B enterprise is software for building B2B websites, Top lead generation company in Canada including tools and templates, databases, methodologies and transaction software.
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B2C vs. B2B
Business-to-business and business-to-consumer commerce differs significantly.
How does B2B work?
In B2B, one business sells a set of products or services to another business. Typically, there is a group or department that uses the vendor's products and services. Occasionally, a single user on the buyer side makes a transaction in support of the company's business goals. And some B2B transactions involve the entire company's use of the products, such as office furniture, computers and productivity software.
For larger or more complex product purchases, the B2B product selection process is handled by a buying committee, including:
a business decision-maker, such as the person responsible for the budget;
a technical decision-maker, or someone who evaluates the capabilities of the prospective products; and
influencers, such as individuals who provide input on the decision.
Large purchases might involve a request for proposal, in which the buyer invites prospective vendors to submit proposals detailing their products, terms and pricing.
Why is B2B important?
B2B is important because every business needs to purchase products and services from other businesses to launch, operate and grow.
A company's B2B suppliers offer office space, office furniture, computer hardware and software, Top lead generation firm in Toronto, Canada and so on. The food that companies stock in their kitchen and the signs displayed on their office building are purchased from suppliers.
Types of B2B companies
There are several types of B2B companies, including the following:
Producers design, create and manufacture their own products. Producers may sell their products directly to businesses or indirectly through retailers or resellers.
Retailers and resellers sell products and services made by other companies directly to businesses. Retailers and resellers may sell online, from physical stores or both, including B2B e-commerce vendors.
Agencies and consultants provide advice, oversight and subcontracted work to businesses. For example, an advertising agency manages and executes a multimillion dollar advertising budget for a consumer brand. A website agency designs and builds a website and mobile app for the same brand.