Over the past few years, eCommerce has shown an immense increase, and at the end of 2022, the US eCommerce sales will be more than $1 trillion.
B2B and B2C are two essential segments of eCommerce where sometimes people get confused while jumping into the eCommerce business.
So, In today’s article, I’ll help you get through this confusion by explaining everything you need to know about B2B and B2C. I’ll share some key differences, business examples, and marketing tactics used in both businesses.
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What are B2B and B2C?
These are two different business models that serve different customers. The main difference between these two business models is their end target audience.
Let’s dive in to get to know about these.
What is B2B?
B2B stands for ‘Business to Business.’ As the name states, this is a relationship between two businesses. One business sells the products and services to another business or company.
The business that buys the products can resell them to end customers or use the products for its internal operations. This relationship between the two businesses or companies can lead both to grow successfully.
What is B2C?
B2C stands for ‘Business to Customer.’ In this model, the business targets the end customers to sell its products or services. B2C businesses sell their products or services to customers for personal use, either in-store or online.
The lines between the B2B and B2C industries aren’t always black and white. Whenever asked, the B2B online merchants will gladly sell to the general public.
It is not uncommon for businesses to make purchases from B2C firms to resell the products at a profit or internally utilize them.
B2B vs. B2C Examples
Let’s understand both these eCommerce business models with examples.
Suppose you manufacture fabric and have a vast amount of fabric. Now, if you plan to sell this fabric to other businesses, you will need to find a business or a wholesaler.
They could be businesses that will buy the fabric from you in bulk, stitch it and sell it to retail stores or end customers. They could also be the wholesalers who will buy from you in bulk and sell the cloth to other businesses, companies, or individuals.
Mood Fabrics is an example of such a B2B business. They sell different types of fabric to businesses and brands.
In a B2C business, the company that bought fabric from you might want to stitch garments of that fabric and sell it to customers in their local shop or online store at a higher price.
The end customers will come to your store and purchase the garments according to their tastes and desire.
One thing you should remember is that despite selling to end customers, you can also sell to retail stores at a considerably low price. It is entirely up to you which route you want to go.
Differences between B2B and B2C
Both of these business models have the potential to be extremely profitable and long-term. Here’s a quick comparison of these to help you understand both eCommerce business models.
|Definition||Business to Business, or B2B, is the sale of goods and services between two business entities.||Business to consumers, or B2C, is a transaction in which a company sells goods and services to a consumer.|
|Type of Buyers||In this business model, the type of buyers are businesses. These may include manufacturers and wholesalers.||In this business model, the type of buyers are individual customers.|
|Pricing||The pricing of goods or services in B2B is low.||The pricing of goods or services in B2C is high.|
|Average Order QuantityThe average order quantity is large. The average order quantity is small or usually one or two.|
|Type of Products||Raw materials and ready to use & sell products.||Ready to use & sell products.|
|Business Goal||In this model, the goals are long-term relationships with businesses.||In this model, the goals are short-term or one-time purchase relationships with individual customers.|
|Buying Reason||The buying reason could be investment, manufacturing, or reselling||The buying reason in this model can be for personal use.|
|Buying Decision||In this model, the buying decision is planned and logical.||The buying decision in this eCommerce model is based on the desire or need.|
|Examples||Payroll processing companies etc.||Restaurant chains etc.|
B2B vs. B2C Which is Better?
There is no clear advantage to either the B2B or B2C business models. Some business operations are better suited to one model than the other. Business objectives, existing systems, and fields all play a role in deciding which model is ideal for you.
Both eCommerce models can be highly profitable, but the product you sell will greatly impact your success.
If you are selling a product that has no market value, you are wasting your money then it doesn’t matter if you are selling B2B or B2C.
If you run a business that produces a large number of goods and you have the budget to manage the warehousing, employees, equipment, and bulk shipping, you can jump into the B2B eCommerce model.
You can also create an online eCommerce store that sells B2B.
But if your business produces a small number of goods, like 500 or less, you can sell B2C with high-profit margins. You can also sell B2B and B2C simultaneously by creating an online store.
B2B vs. B2C Marketing
Now that you know the difference between B2B and B2C businesses, you might want to know the B2B vs. B2C marketing tactics.
As both businesses are different so are the marketing strategies. Both have a different targeted audience and require unique ad copies.
The following table will help you with the B2B vs. B2C marketing strategies.
|Comparison||B2B Marketing||B2C Marketing|
|The targeted audience of B2B marketing are businesses or companies within the niche.||In comparison, the targeted audience of B2C marketing are individual customers.|
|B2B ad copies are more focused on building the confidence of potential customers.||B2C ad copies are emotional, joyful, and entertaining.|
|B2B branding starts with product presentation and service consistency.||B2B branding focuses on delivering a message, fun and eye-catchy.|
|B2B customers have long-term interests.||B2C customers have short-term or one-time interests.|
|B2B marketing requires a lengthy chain of command. B2B marketers must spend more because decision-makers are often multiple people.||B2C customers make quick, one-person decisions. Marketers can save money and time with this.|
Return on Investment(ROI)
|B2B audiences want efficiency and expertise.||B2C audiences want deals and entertainment.|
|The buying cycle is usually long because the head of departments and company members must agree to make a purchase.||The buying process is relatively small because the customers buy the products if they see value in them, which can be helpful. Usually, buying decision is based on one person.|
That’s it for this guide. Now you know the difference between B2B vs. B2C eCommerce business models. This guide has also covered practical examples of models and marketing tactics.
Whether you are selling B2B or B2C, you should provide great products or services to your customers because no matter how good your business plan is, if your products are not demanding, there are fewer chances of business success.
If both these models are done precisely as they should be done, you can get successful and earn excellent revenue.