The B2B and B2C models are essentially two ways of categorizing a business and who its main targets are for sale. In the B2B model, one business typically sells its product to another business (often a retailer) who will then mark the price up and sell to the consumer in a store. In B2C, the business sells directly to the consumer with no middleman. Often, B2C businesses are e-commerce only, with no brick-and-mortar presence.
In some ways, the B2B model can be considered the “old” way of doing business, although it certainly continues to exist and many profitable companies operate at least partially under this model. B2B often operates as part of the supply chain, where one company is purchasing raw materials from another to be transformed into a consumer good. Though it is commonplace in many industries, auto manufacturing, property management, and industrial cleanup are particularly B2B heavy industries. B2B transactions require extensive planning to be successful, as they rely on a company’s account management personnel to establish business client relationships. B2B relationships must also be nurtured, typically through professional interactions prior to sales, for successful transactions to take place.
Trade publications can also be helpful as a marketing tool, offering the chance for businesses to advertise in print and online. Being present at conferences and trade shows is also a crucial step to success for B2B companies.
The B2C sector really began to explode during the 1990s, as more people got access to home computers and online shopping grew rapidly in popularity. This allowed more and more companies to cut out retailer middlemen and sell directly to their consumers at more attractive prices. Thus, B2C companies have generally been hailed as disruptors and many have gone on to become some of the most successful e-commerce companies ever. Any business that counts on B2C sales sees it as paramount to maintain a good relationship with their customers to ensure they return. Unlike in B2B, whose marketing campaigns are geared to demonstrate the added value of a product or service, B2C companies usually attempt to elicit an emotional response in marketing to their customers. B2C models typically fall into one of the following 5 categories: direct sellers, online intermediaries, advertising-based B2C, community-based, and fee-based. The direct seller model is the most popular, where goods are purchased directly from online retailers.