Glossary

Description

B2B commerce

B2B Commerce Definition

B2B commerce (short for business-to-business electronic commerce) is the online sale of goods or services between businesses. It differs from B2C commerce, where a business sells goods or services directly to consumers. As more commerce has moved online in general, so too have B2B transactions.

Types of B2B Commerce

1. Manufacturers

  • Overview: These are companies that make products or components, often outsourcing parts of the process to reduce costs.
  • Key Points:
    • Manufacturing often occurs in countries with lower labor costs, such as China.
    • Companies rely on manufacturers to produce goods they then sell or use in their operations.

2. Wholesalers

  • Overview: Businesses that buy items in bulk from a manufacturer and then resell them at retail prices.
  • Key Points:
    • Profit is made on the difference between bulk and retail pricing.
    • Marketplaces like Alibaba help connect wholesalers with resellers.

3. Distributors

  • Overview: Companies that help move products from manufacturers or wholesalers to end retailers or consumers.
  • Key Points:
    • Distributors use online channels (e.g., SEO, social media) to promote products and services.
    • They play a vital role in the supply chain.

4. Software-as-a-Service (SaaS)

  • Overview: A business model where companies provide software licenses on a subscription basis (monthly or yearly).
  • Key Points:
    • Pioneered by Salesforce, SaaS is among the fastest-growing digital business models.
    • Examples include CRM (Customer Relationship Management), marketing software, and various enterprise tools.

Examples of B2B Commerce

1. Amazon

  • B2C & B2B: While known for B2C, Amazon also operates as a marketplace for business transactions.
  • AWS: Amazon Web Services provides cloud infrastructure for other businesses.

2. Alibaba

  • Focus: One of the largest commerce sites in China, exclusively dedicated to B2B transactions.
  • Marketplace: Connects businesses with wholesalers and manufacturers in China.

3. McKesson

  • Industry: A leading distributor of healthcare products and drugs in the U.S.
  • Service: Offers specialized distribution for sensitive medical equipment.

4. Google

  • B2C & B2B: Known for its consumer search engine, but also offers various B2B services (e.g., GSuite, Google 360).
  • Advertising: Core income stream from search ads utilized by businesses.

5. Facebook

  • Platform: Primarily a B2C social network.
  • B2B Services: Offers advertising services to businesses looking to reach specific demographics.

6. Microsoft

  • Offerings: Provides both consumer and business-focused software (e.g., Office, Windows) and hardware.
  • Cloud Services: Offers cloud hosting and enterprise solutions.

7. Salesforce

  • Pioneer in SaaS: One of the largest B2B software companies specializing in CRM.
  • Sales Tracking: Helps sales reps manage long sales cycles and customer relationships.

8. Oracle

  • Enterprise Software: Provides ERP software that streamlines workflows like accounting, procurement, and supply chain management.
  • Industry Giant: Known for its comprehensive suite of enterprise solutions.

B2B Commerce vs. B2C Commerce

  • Bulk Orders & Pricing: B2B sites often offer specialized pricing for large or bulk orders.
  • Payment Methods: Invoicing, purchase orders, and other approval processes are more common than credit card payments.
  • Negotiation: Enterprise sales often require detailed negotiations, unlike typical instant online consumer checkouts.

B2B2C Commerce

  • Definition: A business model where a company partners with another business to access the end consumer.
  • Examples:
    • Instacart: Partners with grocery chains, offering grocery delivery services.
    • Uber Eats / DoorDash: Partners with restaurants to provide food delivery services.
  • Symbiotic Relationship: While partners benefit from the service, the B2B2C platform also gains direct access to the partner’s customers.

B2B Commerce Platforms

  • Purpose: Provide software solutions for businesses to set up online storefronts tailored to B2B needs.
  • Examples:
    • Optimizely
    • Salesforce B2B Commerce
    • B2B Wave
    • OrderCircle
    • Drupal Commerce
    • Shopify Plus
  • Features: Handle recurring payments, bulk orders, invoicing, and other B2B-specific functionalities.

By moving B2B transactions online, businesses can reach new markets, reduce overhead, and streamline purchasing processes. As the digital landscape continues to evolve, B2B commerce will likely expand further, offering more sophisticated solutions and integrations for enterprises worldwide.

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