There are two broad categories of business relationships for facilitating the sale of goods and services. B2B is the business to business category and B2C the business to consumer category. In B2B, transactions take place between one business and another business, whereas with B2C the transactions happen between the business and the consumer.
B2C businesses are those companies who sell goods and services directly to the consumer or end user through eCommerce, brick and mortar stores or multichannel retail strategies. Transactions are brief, taking place between the manufacturers or retailers and the consumer.
B2B businesses sell products and services from one company to another, for example between manufacturers and wholesalers or between wholesalers and retailers. The buyers are other companies or businesses and transactions tend to be ongoing.
Key differences between B2B and B2C supply chains
The key differences between B2B and B2C supply chains include such things as the negotiations between buyer and seller, the length of the supply chain, the volume of sales and the number of customers involved.
- The level of bargaining power that exists between the buyer and seller within the supply chain differs. In a B2C supply chain, the business generally has greater bargaining power due to size and resources with little to no negotiation occurring. While in a B2B supply chain, there is a greater level of negotiation between both parties.
- B2B supply chains will often only involve the two companies concerned in the transaction, with one selling a product or service directly to the other. In contrast, B2C supply chains are often longer because they tend to involve numerous producers, wholesalers and retailers.
- Sales volumes are higher in a B2B supply chain than in a B2C supply chain because B2B involves the sale of bulk services or inventory stock required by business clients for production purposes or for resale as part of a retail strategy. For this reason, relationships in the B2B supply chain are proportionately more important than relationships in a B2C supply chain.
- In a B2B supply chain there are generally fewer customers and relationships are developed around mutually beneficial arrangements to help manage performance, establish accountability and encourage continuous improvement. The much greater number of customers in a B2C relationship has important implications for how those relationships are managed by a business to gain repeat custom and to achieve and maintain brand loyalty.
While eCommerce has been a staple in B2C retail transactions for some time, many companies are now offering their B2B customers the simplicity and convenience of eCommerce, with online sales now accounting for some 70 percent of transactions in certain markets in Europe, Australia and the United States.
Understanding changing customer needs and optimising the performance of eCommerce channels is critical to a B2B seller’s long-term success. Ignoring customers’ online preferences puts the business at risk of losing out to digital-forward competitors.
Successful B2B eCommerce businesses have effectively connected the front-end customer experience with the back-end processes of inventory control, order processing, order fulfilment and returns. Delivering a seamless, transparent and cost-efficient experience throughout the supply chain benefits both the business making the sale and the business customer making the purchase. Unleashed customers can achieve this with the Unleashed B2B eCommerce Store.
Single-stack B2B commerce
A single-stack approach to eCommerce is where a business employs a single integrated platform that incorporates the company website, CRM, financials, inventory control, warehousing, order management and order fulfilment.
With the real-time visibility of a single-stack platform, businesses can monitor all areas of the supply chain, supporting precision eCommerce. Real-time visibility of inventory stock also helps avoid costly stockouts that can cost a sale and potentially a customer. Pricing and profitability are enhanced when a company can determine the true cost of the product, including shipping, warehousing and discounts.
B2B merchants who are using single-stack platforms report that they have achieved greater profitability per customer, improve cross-sell and upsell rates, have better customer acquisition and satisfaction, and more accurate inventory control and order fulfilment.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.