B2C and B2B are two forms of commercial transactions. B2C, which stands for business-to-consumer, is a process for selling products directly to consumers. B2B, which stands for business-to-business, is a process for selling products or services to other businesses. The business systems that support B2B or B2C communications, transactions and sales administration differ in complexity, scope, scale and cost, so it is important that you implement the right system for your customers.
Consumers buy your products or services for personal use. Business buyers purchase products or services for use in their companies. In B2B-buying, the purchasing process is more complex. Decision making groups include members from technical, business, financial and operational departments, depending on the type of purchase. The person selecting a product may not have authorization to purchase or may not have responsibility for making the final purchasing decision. A large capital purchase, for example, may require authorization at board level.
In B2C, consumers who buy products from you pay the same price as other consumers. In B2B, price may vary by customer. Customers who agree to place large orders or negotiate special terms pay different prices to other customers. Payment mechanisms also differ. In B2C transactions, consumers select products and pay for them at the point of sales using payment mechanisms such as credit or debit cards, checks or cash. B2B transactions require a more complex business system. Customers select products, place an order and arrange delivery through an agreed logistics channel. Customers do not pay at the time of the order, but receive an invoice which they settle within agreed payment terms.
B2C and B2B are also different forms of electronic commerce. B2C e-commerce is a process for selling products directly to consumers from a website. Consumers browse product information pages on your website, select products and pay for them before delivery at a checkout, using a credit or debit card, or other electronic payment mechanism. Consumers enter their address details and select one of the delivery options you offer. The basic B2C business system is relatively simple. You need a method of displaying products and prices on your website, a mechanism for recording customer details, and a checkout to accept payment.
You can use a similar website-based business system if you sell low-value products to business customers and you take payment with orders. However, B2B transactions normally require a more complex business system. The system must be capable of accepting orders in different formats such as email, documents or electronic orders. It must integrate order capture with your other administrative systems such as invoicing, customer records and accounting.
At a more advanced level, you can offer groups of products customized to different customers. The business system selects the appropriate products to display when a customer logs in. This streamlines the process for business customers, as they do not have to browse a complete catalogue to find the products they want to buy from you. You can also plan to integrate your business system with the systems of your suppliers and logistics partners so that you can manage purchasing, stockholding and distribution efficiently.