Marketing Glossary

B2B Commerce

The exchange of services or goods between businesses using the internet.

What is B2B Commerce?

The online selling of services or goods among businesses is known as B2B commerce (short for business-to-business electronic commerce). Where B2C e-commerce involves companies selling directly to consumers, B2B e-commerce involves companies selling directly to other businesses.


The Definition of B2B Commerce

B2B commerce is a phrase used to describe any sort of internet business between two companies that revolves around the exchange of goods or services. In order for businesses to function, they must rely on other businesses, whether it’s for services like distribution or manufacturing, or acquiring supplies and equipment. B2B transactions have also gone online as more and more trade has taken place online.


An Overview on the Types of B2B Commerce

There are numerous sorts of B2B commerce transactions and connections that can be conducted via the internet. The following are some common types of B2B commerce businesses:

Manufacturing

Manufacturing is a critical business component for any company that sells tangible items, and due to the high cost of owning and managing a manufacturing plant, many companies are outsourcing their manufacturing to 3rd parties, who are often based in low – cost countries with cheap┬álabour rates, such as China.

Distributors

Another crucial component of operating a business is distribution, which is increasingly being done online as the internet has become one of the most important marketing mediums. B2B distributors advertise items and services on behalf of their business clients via Search Engine Optimization (SEO) and Social Media Marketing (SMM).

Wholesalers

Wholesaling is when a company buys things in quantity from another company and then resells them to customers at a retail price, benefiting on the difference. Many organizations sell things in quantity (typically from China) at a bargain, but there are also marketplaces like Alibaba that let resellers connect with wholesale sellers.

Software-as-a-Service (SaaS)

It’s no secret that Salesforce’s service-based B2B software model is one of the most rapidly expanding B2B business models for tech businesses focusing on digital commerce. It is common for firms to license and provide access to their own software to other businesses, who then pay the business a recurring monthly or annual charge to continue using the software.


Examples of B2B Commerce Companies

Orcale

It’s no secret that Oracle is a B2B commerce behemoth, delivering ERP software that helps companies simplify their enterprise activities like project management, accounting, and procurement and while also ensuring compliance and security.

Salesforce

Software-as-a-service (SaaS) pioneer Salesforce is a leading B2B software company in the industry. Prospects and customers can be tracked by Salesforce’s CRM software as they go through the lengthy sales process.

Microsoft

In addition to its consumer-level, worldwide-famous, office suite, Microsoft also provides a wide range of B2B services. It is possible to license Microsoft products such as Windows and Office for corporate use, along with cloud hosting services, computer hardware, and marketing technology.

Facebook

Another B2B service provider is Facebook. Marketers pay Facebook and other social media platforms like Snapchat, Twitter, and Instagram (owned by Facebook) to run advertisements on their platforms in order to monetize their free B2C services.

Google

Google provides a wide range of B2B software services in addition to its B2C search engine. The Google G-Suite is a cloud-based business suite that includes services like calendaring, word processing, and spreadsheets. In addition to providing search results with advertising, Google ads are also a major source of revenue for the company.

McKesson

Pharmaceutical and medical device industries rely on McKesson for distribution services, as the company treats their products and clients with the utmost care, making it the country’s largest distributor of health care products and medications in the United States.

Alibaba

Alibaba is one of China’s largest e-commerce platforms, specializing primarily in business-to-business transactions. Using Alibaba as a B2B marketplace, companies can find Chinese manufacturers to collaborate with on the creation of unique products or wholesalers who sell in bulk.

Amazon

Besides selling to consumers, Amazon also acts as a marketplace for other firms to conduct online transactions. Cloud-based software enterprises can also outsource their cloud infrastructure using Amazon web services (AWS).


B2C Commerce vs. B2B Commerce

It may appear that B2B commerce platforms and apps are the same as consumer commerce platforms and applications, but this isn’t always the case because B2B organizations have unique demands. A B2B e-commerce site, for example, might provide discounts for bulk orders, since businesses frequently require huge quantities of products for their workforces.

B2B purchasers sometimes have to go through lengthy approval processes and pay for large orders by invoicing, thus a website may offer a variety of payment options other than credit cards or PayPal. Larger business deals, such as SaaS sales, typically necessitate negotiations between firms, and customers may not be able to check out and pay for a purchase immediately through a website in these circumstances.

Therefore, B2B customers get in touch with a sales professional via the website, and the sales rep begins an enterprise sales procedure to finalize the purchase. There is some blurring of the distinctions between B2B and B2C commerce websites. As an example, Forrester and other experts predict that Amazon, the largest B2C shopping site on the web, will generate over $400 billion in revenue in the next several years.

It’s important to note, though, that Amazon is essentially a marketplace for other businesses. The Amazon platform allows merchants of all sizes to build their own stores and sell directly to customers. As a result, Amazon can be used for both B2C and B2B transactions.


B2B2C Commerce

A firm can supply an intermediary company with a service to acquire access to their clients through B2B2C (business-to-business-to-consumer). Instacart is a good example of a business that operates in this manner that allows the common man to now get groceries delivered at their doorstep from major grocery stores.

Despite the short-term gains for the grocery store chains, Instacart is progressively gaining access to many of their clients, to the point that customers often deal directly with Instacart and forego the grocery store altogether. This is a huge win for a company like Instacart, as it not only builds brand reputation, but also promotes word of mouth.

Companies like DoorDash and Uber Eats operate on a similar business model. Customers of local restaurants are at their disposal because they have partnered with the restaurants to offer delivery services to businesses that wouldn’t otherwise have access to it.

There are advantages and disadvantages in this arrangement, but it can also be symbiotic as the corporations that provide a service to businesses have more and more control over those businesses and can squeeze earnings by charging fees to those enterprises.