What is Business to Business – B2B?

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What is Business to Business – B2B?

Business to Business (B2B) is a business model where transactions are carried out between corporate entities rather than a company and an individual consumer.

B2B transactions constitute the majority of all business, as most products are handled by several different companies before reaching the end user. Any material object sold to a consumer will first have raw material sourced, before being processed and refined, manufactured, and distributed.

This is the very least that can be expected of the journey of most products, and each step will likely involve a totally new company.

The B2B Model

Some businesses operate both the B2B model and B2C. For example, Microsoft provides computer systems for offices, but also supplies the home market.

The most simple B2B relationships are ongoing supply deals for essential items such as office stationery.

Brokerage companies are a kind of B2B that exist to help enterprises find providers for the goods and services they need. For example, a company may not have the specialist knowledge required to source real estate and construct office spaces. A broker can be hired to oversee this process for a fee.

Business process outsourcers (BPOs) are common in contact centres and provide many of the services contact centres use but cannot always supply for themselves. These include dedicated IT services, overflow contact centres, or even coaching and mentoring resources.

B2B Services

B2B companies operate in very different circumstances than their (B2C) contemporaries. Their sales tend to comprise fewer, larger sales, and their customer base is likely to be much more informed about their product and that of their rivals.

They will often have to make an extremely compelling case for their own product and are typically much more dependent on strong existing relationships with suppliers and manufacturers. These relationships will often last well into the long term and require a high degree of maintenance.

B2B enterprises use different marketing and advertising channels such as trade publication and events. They often have a different relationship with their client base, in that the companies they work with are more likely to actively seek them out.

When customer service is carried out B2B, there is generally an expectation of a very high level of technical expertise. Quality of service and supply is a major differentiator in B2B engagement, as client companies only want to commit to suppliers that are reliable and demonstrate expertise. This is another reason that interpersonal relationships are very important in B2B trade.

Author: Jonty Pearce

Published On: 3rd Mar 2017 - Last modified: 4th Apr 2022
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