Whether it is retail or wholesale the sole objective of any business owner is to make sales and improve profitability. What is B2B ecommerce and how is it different from B2C? The key differences between B2C and B2B are pretty simple, although the revenues generated are vastly different.
B2C (Business to Consumer)
- Relatively simple sales
- Fixed prices
- Low quantities
- Easy shipping
- Little regulation or tax complexity
- Products are easily showcased and marketed
B2B (Business to Business)
- Prices are highly variable
- Higher product volumes
- Need flexible shipping and logistics solutions
- Taxes and regulatory requirements impact sales
- Marketing is more complex
B2C is a retail transaction where a business sells a product to a consumer. That transaction can happen in a mall, a store, a restaurant, or at home when you subscribe to a pay-per-view movie. More recently, the term B2C refers to an online transaction in which manufacturers or retailers sell their products to consumers over the internet. This B2C model is probably the most familiar online buying process for all of us. If you have ever purchased an item online for your own personal use - that is a B2C transaction. According to Business News Daily, "The concept was first developed in 1979 by Michael Aldrich, an English inventor, who connected a television set to a transaction processing computer with a telephone line and coined the term 'teleshopping'."
B2B involves exchanges and transactions between a company and its trading associates: suppliers, collaborators, subsidiaries, and large organizational customers. These transactions can take place through a network or privately owned connection. However, in today's business world they are carried out online with automated applications that require a minimum of human involvement.
While today's B2C transactions get the most media attention, B2B ecommerce generates the most revenue. According to recent research by Frost & Sullivan, "this B2B market will grow to $6.7 trillion in gross merchandise by 2020 worldwide. In the US alone, Forrester Research expects B2B ecommerce sales to reach $780 billion and represent 9.3 percent of all B2B sales by the end of 2015. The firm predicts that B2B ecommerce will exceed $1.1 trillion and comprise 12 percent of all B2B sales in the United States by 2020."
Online sellers in the B2B area are now recognizing that the customer experience needs to be as close as possible to the B2C consumer experience. Expectations have been raised by the relative ease found in the B2C experience, and more and more business customers are looking for that same experience in their online transactions with suppliers and subsidiaries. B2B online buying will increase as enterprise and purchasing software becomes easily implemented, especially in the area of mobile applications. This will allow employees of the purchasing companies to use smartphones and tablets to buy goods 24/7 and from anywhere they happen to be.
Not only do many B2B buyers prefer to make their purchases online, but they also research the products online through websites, reviews, and comparison tactics, very similar to the individual consumer. While many differences exist between B2C and B2B, many similarities are emerging due to the popularity of the customer experience with B2C transactions. Among the characteristics making the transition are:
- Interactive Catalogs
- Customer Reviews
- Inventory Availability
According to Archana Vidyasekar, senior research analyst in Frost & Sullivan’s Visionary Research Group, “The main drivers for migration to B2B is the pressure from industry leaders to move to online platforms.” The growing expectation across all industries is the ability to conduct buying and selling online. This constitutes a general, but resolute, shift to move as many procurement activities as possible to the internet rather than previous methods such as faxes and paper purchase orders.
Your B2B transactions can be brought up-to-date, streamlined, and made efficient. Visit the Now Commerce website and read the testimonials of customers that have realized dramatic B2B results with the help of a B2B ecommerce platform.