So basically this the short form of Business to Business and Business to
Customer.
I think now the things are pretty much clear. Let’s look at them separately with
examples –
B2B businesses are
the business where the customer of one business or a company is another
business or company.
For example – A manufacturer supplies goods to wholesaler or a wholesaler
supplying goods to retailer. Here someone is purchasing something not as an end
user but for business purpose.
Another example would be a company purchasing Tally. Here a company is
purchasing software from another company for business use, thus this comes
under b2b business.
Order value of b2b businesses are usually higher although the margins are
pretty low.
It can be a little difficult to get a customer here, but once the deal is
cracked it is more likely to be recurring and sustainable. For instance you are
a wholesaler, it can be difficult to convince a retail shop owner to sell your
goods at the beginning, you will have to keep the follow up, offer better
prices than its previous vendor and much more, but once he starts purchasing
from you, he’s going to require that again in a week or a month.
Advantages:
High order value
Sustainable and easy to anticipate growth
High turnover
Disadvantages:
Low margins
Difficult to get client
High investment
B2C businesses are
the business where the customer is actually the end user of the product.
For Example – A retailer or reseller selling its goods or services to people
like you and me on their shops or websites or via marketplaces like amazon,
flipkart, eBay, etc. Here customer
purchases the products or services for their use, like groceries or a subscription
of OTT platform.
Order value of b2c business is comparatively lower although margins are high.
Customers are already looking for the products in the market so converting them
is not a big challenge.
Advantages:
High profit margins
Easy to get customers
Low investment
Disadvantages:
Low order values
Non-recurring and non-sustainable customers
Hope this was helpful. Thank you!
