For example, if you have a printer at home, the company you buy your paper, ink, and replacement parts from likely also supplies those components to other businesses. In your day to day life, you probably come across this transaction model more than any other. Grocery shopping, buying an online game, downloading an app for your smartphones—these are all examples of B2C transactions consumers experience every day. The concept of B2C transacting became especially popular in the late s after the dot-com boom.
Around that time, the term mostly referred to online retailers selling services and products to customers via the internet. For example, when targeting retailers B2B , a business will highlight the impact and quality of its product or service. However, when targeting consumers directly B2C , creating an emotional connection is equally important. Traditionally, B2C transactions included buying groceries, eating out at a restaurant , or going on a shopping trip with friends.
In the digital sphere, it also referred to infomercials, pay-per-view movies, and other forms of television advertising. Today, the term largely refers to eCommerce transactions—or selling services and goods via the internet.
Many businesses that traditionally transacted in the physical world have now moved partially or wholly online. For example, many restaurants now allow customers to purchase menu items online for pickup or delivery.
If you use social media, email, or browse the internet, you likely see forms of B2C marketing every day—such as targeted Facebook advertising or email marketing campaigns sent directly to your inbox. As we discussed above, traditional B2C examples include a customer shopping at the supermarket or buying a cup of coffee from their favourite cafe. In Australia online, thousands of companies sell products and services online—whether they have a physical storefront or not.
In fact, some companies that previously traded in brick-and-mortar stores now only sell online. You likely also come across B2C marketing every day.
These marketing examples are labelled B2C because the business sells directly to the consumer. In contrast, a soft drink manufacturer might market the same product B2B by creating direct email marketing campaigns to local retailers. B2B vs B2C: Tax obligations and benefits. Generally, the B2B model involves a much higher transaction volume than the B2C model.
The receiver pays GST while the supplier will receive a credit reflecting the input tax they paid at acquisition. In the B2C model, however, the receiver or consumer bears all GST expenses and is not entitled to any credits.
You may have noticed an overriding theme in this article—eCommerce. As we discussed, the B2B2C model came to prominence almost entirely because of eCommerce trading. Rather than working towards their goals alone, businesses can solicit help from other companies to optimise their operations. On the other hand, B2B eCommerce is a lot more rational. Buyers make decisions based on logic and usually make purchases that help their business make more money, save money or act like an investment that leads to a rate of return in the long run.
The buying process in the world of B2B is a lot more planned and systematic than B2C. In B2B eCommerce, it may take a business several weeks to go through the process of issuing a purchase order, deciding on the quantity of products they want to buy and seeking out finalized purchase permission.
B2C eCommerce is usually targeted at a specific segment of the overall general public. For this reason, B2C eCommerce websites must be able to handle a large volume of traffic, as the transaction value is a lot smaller, but the volume of transactions is a lot larger!
On the other hand, B2B eCommerce is only targeted at a very specific type of business. For instance, a business may be targeting law firms of a certain size within a specific location. Therefore, the volume of transactions may be a lot lower, but the dollar value of each transaction may be a lot larger.
B2B eCommerce websites should also seek to secure information pertaining to their leads, like the contact details of their target audience. While design is important in both the B2B and B2C world, there are some subtle differences between both types of websites. As explained earlier, in B2C eCommerce, users are motivated by their emotions and their desire to make the buying decision. B2B eCommerce websites , on the other hand, need to be a lot more factual in nature and should be geared towards providing relevant information to their users in an organized and easily accessible manner.
A quality site search is also very important when it comes to a B2B eCommerce site. In terms of the kind of content on a B2B eCommerce site, buyers are looking for something more educational in nature. Nowadays, many B2B buyers educate themselves on products using content they find online. This may include videos showing product demos or case studies showing how your B2B product helped another company.
B2C customers may only make one off purchases from an online store and never return. Once their purpose has been served, they may not make another purchase for some time, unless they have a compelling reason to do so.
This means that, regardless of the business you run, you first have to establish what your target customers need. This can be done through surveys, research, or by looking at B2B sales leads see what is B2B sales.
If you aren't meeting consumer needs, you can quickly run into issues with a backorder , dead stock see what is dead stock , or even risk business failure. Now that you know the main differences between B2B and B2C business models, you can make the right decisions for your business. Remember, both models are capable of providing a business with a large volume of sales and push product. Your next move should be to look at the various inventory control methods available.
This will help you keep costs low as you continue to grow your business. Check out these common questions and answers below:. Amazon is both a business to business B2B and business to consumer B2C company. Given the breadth of products available on Amazon, more and more small businesses turn to the website for supplies. Companies can set up a store, control their pricing and fulfillment, and reach customers in several ways.
Of course, Amazon is best known for their B2C capacities. Businesses of almost every kind can sell products on Amazon, from shoes and furniture to tech gadgets and food.
Amazon Prime is a popular feature offered by the company, which offers free shipping and other benefits for a low annual fee. The level of expertise a company or marketer will have in B2B or B2C depends on several factors.
One, it depends on whether or not a company is reaching businesses or consumers. A company targeting other businesses has a different marketing and sales approach than one targeting customers.
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