Definition & Examples of Business-to-Business (B2B)

What is Business-to-Business?

Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses, such as those involving producers and wholesale traders, or wholesalers and retailers. Business techniques refer to businesses carried out between companies, not between companies and individual consumers. Business-to-business is different from business-to-consumer (B2C) and business-to-government (B2G) transactions.

Takeaways key

Business-to-business (B2B) is a transaction or business that is carried out between one business and another, such as wholesale and retailers.
B2B transactions tend to occur in the supply chain, where one company will buy raw materials from another for use in the manufacturing process.
B2B transactions are also common for car industry companies, as well as property management, housekeeping, and industrial cleaning companies.
Meanwhile, business-to-consumer (B2C) transactions are made between companies and individual consumers.

Understanding Business-to-Business(B2B)

Business-technical transactions are common in typical supply chains because companies buy components and products such as other raw materials for use in the manufacturing process. Finished products can then be sold to individuals through business-to-consumer transactions.

In the context of communication, business-business refers to methods with which employees from different companies can be connected to each other, such as through social media. The type of communication between employees of two or more companies is called B2B Communication.

B2B e-commerce

At the end of 2018, Forrester said the B2B e-commerce market reached $ 1.134 trillion-on $ 954 billion which was projected for 2018 in the estimated release in 2017. That was around 12% of the total $ 9 trillion of total B2B US sales for that year. They expect this percentage to rise to 17% in 2023. The internet provides a strong environment where businesses can find out about products and services and put the basis for business-business transactions in the future.

The company’s website allows interested parties to learn about business products and services and start contact. Online products and supply exchange websites allow businesses to find products and services and start procurement through the e-procurement interface. A special online directory that provides information about certain industries, companies, and products and services they provide also facilitates B2B transactions.

Special considerations

Business-to-business transactions require planning to be successful. Such transactions depend on company account management personnel to establish business client relationships. Business-technical relations must also be fostered, usually through professional interactions before sales, so that transactions are successfully carried out.

Traditional marketing practices also help businesses connect with business clients. Trade publications help in this effort, offering business opportunities to advertise in print and online media. The presence of a business at a trade conference and exhibition also builds awareness of the products and services provided for other businesses.

Examples of business-to-Business(B2B)

Business-technical transactions and large company accounts are common for companies in the field of manufacturing. Samsung, for example, is one of Apple’s biggest suppliers in iPhone production. Apple also holds B2-B relations with companies such as Intel, Panasonic, and Semiconductor Micron Technology.

B2B transactions are also the backbone of the car industry. Many vehicle components are produced independently, and car manufacturers buy these sections to assemble cars. Tires, batteries, electronics, hoses, and doors, for example, are usually produced by various companies and are sold directly to car manufacturers.