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September 8, 2020
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B2B vs B2C eCommerce
The main difference between B2C and B2B eCommerce lies in who the buyer or the target audience is. B2B eCommerce refers to online transactions done between two businesses. Meanwhile, in B2C eCommerce, businesses sell their products and services directly to consumers online.
eCommerce is the term used to describe all sales transactions that happen online.
The majority of all eCommerce takes place as business to consumer (B2C) or business to business (B2B).
An online wholesaler who stocks a large selection of different clothing items is a prime example of a B2B eCommerce business.
The wholesaler buys their stock in big batches directly from a manufacturer, meaning it can offer its business customers competitive prices and a large selection of products.
The wholesaler’s main customers are B2C retail businesses who buy clothes to sell to the end-customers.
Some of the other customers that a B2B online wholesaler might have include dropshipping supply partners or print fulfillment platforms online.
Another great example of a B2B eCommerce is a management consultancy operating online. Rather than selling products much like a wholesaler does, the consultancy would offer services like leadership coaching to its business clients.
If you’re a consumer yourself, you’re probably more familiar with B2C online stores.
If you’ve ever bought clothes online from H&M or ordered furniture for your house from IKEA, you’ve been shopping at B2C eCommerce retail stores.
Even placing an online order for your groceries from the local supermarket counts as B2C eCommerce.
And it’s not just products that populate the online B2C market: any album purchased on iTunes counts as B2C eCommerce, too.
While both B2B and B2C eCommerce businesses operate mainly online, they serve different target audiences.
One of the major differences between B2C and B2B eCommerce is the way marketing strategy is put together and executed.
That’s because B2B requires a much higher level of personalization, generally speaking.
A B2C buyer usually makes purchases of smaller value, the more people an eCommerce can attract the more it can sell.
Meanwhile, B2C marketing can be done to a bigger group of people and kept more general, but B2B marketing needs to be tailored and personalized to the particular customer’s needs.
Although two clothing retailers will both need to buy new stock, they might feature different collections, meaning they’ll have different purchasing needs.
In general, the number of customers that a B2C company has is much, much higher than the number of business clients a B2B business has.
People who shop at a particular B2C business also tend to share some characteristics, like age, interests, or gender.
For example, an online wedding dress store probably gets visited the most by women who are about to get married. This makes user profiling easy for B2C companies.
Meanwhile, a B2B company might be able to tailor their services and products to various business clients; emailing software can be used by both small and large companies alike, even if in different fields.
A consumer, or a B2C buyer, also behaves very differently than a B2B buyer:
In B2C, setting up and running an eCommerce store is relatively easy.
You need a website that can display all the products you’re offering, store your customers’ information somewhere, and manage the payment and order processing.
A B2B company, however, needs a more flexible platform, since each customer’s orders can vary greatly from one another. While a B2C customer is usually interested in seeing everything a B2C eCommerce website has to offer, a B2B customer has a more specific idea of what they need.
A business client might have a preference for paying in installments, or their accounting department might require an invoice to be issued first.
Therefore, a good B2B eCommerce store should be able to accommodate the personalized services most B2B clients need.
Since a B2C buyer acts more based on emotion and impulse than a B2B buyer, a B2B eCommerce business has to put considerable thought into what value their product or service brings to the B2B client.
A B2C buyer is likely to buy small quantities of any product or service, and the total amount spent will be lower compared to a B2B buyer, too.
The B2C buyer will also pay a higher price per unit, since the retailer has much higher markups than a wholesaler.
A B2C eCommerce needs hundreds of customers to start making real revenue, as compared to a B2B eCommerce that might just need a handful of business clients to reach the same values.
In many cases, a B2B buyer is more likely to make repeat purchases and set up a frequent product or service delivery schedule.
Since a business has more buying power than an individual, the B2B buyer will order bigger quantities too.
When a business is deciding on a purchase, it usually wants to be as well informed as possible. This means that all available options will be considered and weighed against each other.
If a company is looking for a new IT provider, for example, it will get a clear and detailed idea of the local IT companies’ available services and charges.
Most business purchases also affect multiple people, so the decision is usually made together with many stakeholders in various departments of a company.
In the world of B2C, however, there’s usually just one or two people who decide on the purchase. Since B2C purchases are made for individuals or individual households, a decision can be made faster and by fewer people.
Another key difference between B2B and B2C customers is that B2C clients tend to shop around more and look for the best offers or even discount codes.
A consumer won’t need to buy shoes every week, which means that the purchases of individual B2C customers are less frequent and less driven by brand loyalty.
A consumer will compare the selection of multiple online shops before buying something.
Even if the consumer bought shoes they really liked from your eCommerce store, they might go to a competitor who’s running a really good promo the next time around.
You just can’t guess who’s going to get the sale, unless your brand has a dedicated following.
In the world of B2B, happy and satisfied clients are likely to stay with their service provider or supplier.
The reasons customer loyalty is more prominent in the B2B market vary from sector to sector. In principle, since contractual negotiations can take a long while, it usually makes sense for a company to keep buying from their supplier.
There are a couple of similarities when it comes to these different eCommerce business models:
B2C eCommerce is the right choice for your business if you:
On the other hand, your venture might flourish as a B2B eCommerce business if: