B2B vs B2C: What's the Difference?

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In the new age of digital commerce, every online marketer or business owner has become familiar with B2B (business-to-business) and B2C (business-to-consumer) business types. Though both businesses have different operations, some businesses crossover between B2B and B2C – selling to both businesses and consumers.

A company operating in the B2B environment sells its products and services to other companies and businesses. From there, companies will use the products for their own operations or resell products to the end consumer – sometimes in a dropshipping-type manner. A company operating in the B2C environment sells products directly to the end-user and does not have as many complexities as B2B.

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The Decision Making Process

One of the key differences between the B2B market and the B2C market is consumer decisions regarding “buying intent”. Consumers are likely to make quick decisions when there is a cheap purchase available to them. This is good news for e-commerce retailers as you can increase the chances of impulse purchases, relevant upsells, and a simple-to-use and quick checkout process.

B2B products tend to fall into the category of expensive purchases with a longer consideration period. While consumers might buy something cheap without much thought, expensive purchases tend to be more considered. In a 2017 study, it was shown that B2B transactions require sign-off from multiple stakeholders, meaning the decision-making process will always involve more than one person. The most expensive B2B transactions are based on a return on investment (ROI) calculation and the decision-making process usually follows a strict set of guidelines that revolve around this method.

B2B Complexities

The global B2B marketplace is valued more than the B2C marketplace due to larger and more expensive orders. B2B operations are vastly more complex than B2C operations due to the following:

B2B buyers always consult with multiple departments before purchasing, while B2C consumers only have to consider themselves as the sole buyer. B2B buyers look at the long term while analyzing the needs, solutions, and risks – in turn, spending more time researching while B2C consumers are often quick buyers and are prone to impulse buying. B2B buyers deal in high-value and high-volume purchases – meaning any mistake in the process is vastly more damageable as opposed to smaller B2C purchasing errors. B2B buyers are repeat purchasers as they look for long-term partnerships and adjust to fit the buyer purchasing cycle, while B2C consumers will often buy a single product.

B2B and B2C Buying Strategies

As you can tell by now, the ways in which B2B buyers and B2C buyers operate are vastly different. Though both markets approach the same initial tactic of researching for the product or service, both markets have their own ways of making a purchasing decision post-research. Let’s take a look:

B2B Sales Funnel:

  1. Research information on the product or service
  2. Buyers look at products and reviews
  3. Buyers share research with other stakeholders
  4. Buyers receive a product demo
  5. Buyer reviews contract proposal
  6. Sales transaction is complete and the contract is signed

B2C Sales Funnel:

  1. Research information on the product or service
  2. Consumer learns about the product(s)
  3. Consumer reads reviews and compares products
  4. Adds to shopping cart and review decisions
  5. Checkout is complete and product has been purchased

Order Fulfillment and Shipping Has Changed

The order fulfillment process and shipping services used by B2B and B2C e-commerce companies share some similar characteristics as everyone wants the product to be delivered safely with no errors, in the shortest possible time (and with the lowest rates).

Consumers are often impatient when waiting for a delivery compared to businesses. A company like Amazon has changed the way consumers see shipping and delivery. Amazon has set certain expectations for the B2C industry – allowing for same-day delivery – something that also impacts the B2B sector as larger products often take longer to deliver. Any e-commerce store that is directly competing with Amazon will face the struggle of providing shipping services that are on-par Amazon’s effectiveness. On top of this, Amazon also provides buying incentives like free shipping, which is an important consideration for many consumers.

Conclusions

Purchasing decisions of businesses operating in a B2B environment or B2C environment are vastly different yet share some of the same considerations and likenesses. Consumers and businesses spend a fair amount of time deciding on a purchase as they want to buy safe and reliable products at the lowest cost possible. B2B and B2C businesses share the same overall goal; to provide the best service possible for their customers as this builds customer loyalty and ensures consumers return to make a purchase again and again.