B2B & B2C - Characteristics and differences

What is B2B?

The abbreviation B2B stands for business-to-business and generally covers communication and business relationships between at least two companies. The term is used whenever two companies act with each other and when the business activity is limited to those with other companies. Business object may e. g. the exchange of tangible or intangible goods, but also the provision of services.

Examples of B2B software providers are companies that offer corporate software such as communication and project management tools, or systems for processing payment transactions for salaries or goods or for controlling and managing fulfillment processes. In addition, an example of a B2B service provider: Some logistics service providers, for example, focus exclusively on orders from companies and do not take over private deliveries.

What is B2C?

B2C stands for business-to-consumer and describes the business and communication relationship between companies and private end consumers. A B2C company sells its products exclusively to private customers. The object of business may also be intangible or tangible goods and services. An example is a B2C software provider that distributes anti-virus programs to end customers. In the previously used example of the logisitcs industry, traditional B2C service providers would be parcel service providers.

Characteristics of B2B in comparison to B2C

Higher switching costs when changing providers

More complex products

Concrete requirements for the product

Longer and more extensive buying process

Challenges in the B2B sector

As the B2B market is smaller compared to the B2C market, the competition between the suppliers on the market is higher.Supply chain management in eCommerce can be complicated. This is particularly the case where several partners are involved in the supply chain and all need access to the same information. Miscommunication at any point in the supply chain can slow down the process.Because B2B buyers make large investments, they usually negotiate better prices, ask for discounts or demand additional services.

Challenges in the B2C sector

In the B2C sector, it is much harder to define specific customer groups than in the B2B sector. Usually these can only be described approximately, for example by personas or customer profiles. However, in order to reach the largest possible group of consumers, the company’s communication channels should be as wide as possible.In the B2C sector, prices and offers are usually recognizable and comparable for the customer at a glance. On the shelf of a supermarket, for example, several suppliers and products can be evaluated directly on site and an appropriate choice made. Especially for everyday products, the cheapest product usually wins here.Since purchasing decisions in the B2C sector are often primarily driven by emotions, aspects such as the design of the product or the advertising are just as decisive factors as the product itself. For B2C companies, this means that customers need to be convinced on several levels.Back to glossary overview