Business to Business transactions, commonly known as B2B, are those in which a business sells services and products to companies that need them. Some companies will need some products to create other products for the consumer.
For instance, a paper manufacturing company selling papers to a publishing company is a form of B2B transaction.
This form of business transaction exists along with business-to-consumer transaction since most B2B establishments still act as B2C and gain from all ends.
The B2B field is constantly evolving and new ways of transacting business coming up. Read on and learn more about these businesses.
Real Life Example
The oldest example in the book is in the automotive industry where different parts making a car are supplied by other businesses.
Tires, batteries, hoses and different electronics are supplied by different companies and connected together to make the final product, a car. By buying a car, you are buying from many businesses.
The small B2B transactions from a number of businesses result in a single product, a vehicle, which results in a business to consumer sale.
After the end of the B2C sale, the B2B transacting business will have made sales in high volumes. There are a lot of other examples of B2B transactions that allow a business to provide services or products to the end consumer.
How are B2B Transactions Different?
Selling to a business is easy since you are likely to sell products in bulk unlike selling to individuals where products are bought singly. However, there are still challenges for businesses engaging in B2B transactions.
When you are looking to sell, at times you need to participate in a bidding process where you have to compete with other businesses.
Even after you have won against other businesses, the decision-making process from the company will take time seeing that it is committees that have to make decisions.
Again, the value of goods in B2B transactions is higher than when selling to consumers. Companies that are buying in B2B have to be extra careful when buying products and may even ask for prototypes for assessment before buying.
Does B2B affect B2C?
If a company is selling products or services to other businesses, it does not mean they cannot sell to consumers. B2B only makes the businesses get more returns from their products or services.
For instance, a bead company can sell their beads to a jewelry company and still package others for consumers.
Naturally though, where B2B transactions provide products and services that are core to production and sell to consumers; their quality, pricing, and availability can affect the B2C transactions.
Customers are Key
In B2B transactions, the customer is the main target even when the products are sold to other businesses. Therefore, the products have to be designed with top quality and the services offered in a way that aims to satisfy customers. Check out FPX B2B for more information.
— FPX (@FPX) February 21, 2018