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What is a B2B company?

March 14, 2020

If you have heard about B2B e-commerce but still don't really know what it is, here we give you the definition of this concept also known as business to business and we will give you some examples.

The opinions expressed by collaborators are personal.

The B2B stands for business to business, which refers to business models in which transactions of goods or the provision of services occurring between two companies (private or not), therefore it is mainly related to trade wholesale, although it can also refer to the provision of services and content consumption.

What is a B2B company?What is a B2B company?

Paul Hague, Nick Hague and Matthew Harrison, authors of B2B Marketing: What Makes it Special define it as: “knowing the needs of other businesses, but knowing that in the end, the demand for the products made by them, will end up being used by consumers individuals in their homes ”, a fact that must be taken into account for the marketing strategy.

Although it started in the traditional economy, with the change in technology and the appearance of ICTs, it was part of e-commerce , using electronic payment services such as credit card authorizations or electronic wallets.

After a first attempt to develop business models focused on the final consumer, the pioneering internet companies considered it more affordable to try to develop business models focused on other companies. On the one hand, the computer park was larger, requiring less investment in advertising and marketing, and much higher average values ​​per transaction. This explains why it developed faster than e-commerce targeting the individual customer.

Currently, enormous opportunities have been opened for the development of B2B business models due, among others, to the following reasons:

  • Speed ​​and security in communications.
  • Ease of integration of processes and internal communication: intranets, extranets.
  • Possibility of expanding the scope in which to find partners to collaborate with.
  • Cheaper pre-sale processes: virtual meetings, request for proposals, online contract auction.

There are several advantages of B2B for companies, although it is important to note that B2B and B2C actions can be carried out by the same company (both in parallel and sequentially over time), each constituting a phase of the process. of sale of the good or service.

  • Time saving. B2B marketing has the function of creating brand image and promoting personal contacts. Although it involves a consolidation process, if it works it is easier to have a presence in the market than limiting yourself to B2C actions focused on the end customer.

In other words, being prestigious or considered a specialist in a subject makes it easier to sell without having to disperse efforts.

  • Saving money. Related to saving time, if the B2B work has been carried out correctly, the positive brand image that is created will serve to avoid spending more resources than is strictly necessary on B2C marketing actions.
  • Personalization. As the goods and services offered are increasingly similar, and there is greater competition, offering something different becomes a market necessity.

The B2B marketing service serves to position a company in the sector with its own identity, while the B2C works with emotional elements of a more primary type, which are those that operate on the final consumer and that are common.

  • Higher turnover per customer. Although it is true that making a customer in B2B is more complicated than in B2C, both due to the potential market and the complexity of the demand (which makes it take months to purchase), it is also true that the turnover is older and tends to be more concentrated.

The business model . A B2B business model can be, for example, that of those companies that provide web content to others, either through blog posts, tweets, web or social positioning work, promotional portals on the Internet.

Examples:

  • Marketplace.   where some companies specify their demands for products or services and others offer them or those in which a company does not try to communicate with its final customer but with distributors, partners, importers or other types of professional buyers.
  • In the traditional . An example of traditional B2B involves the automobile manufacturing industry. The components of a vehicle are generally manufactured by different companies and the car company buys them independently. ”
  • Email Marketing to companies and professionals , allowing them to communicate with their end customers and prospects. If you don't have an account yet, we invite you to create one for free and with no shipping limit.
  • E-commerce. Like the purchase of goods and services through the web via secure servers, for example.

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