THINKING OF A BUSINESS? B2B OR B2C, WHICH ONE IS BETTER?

The business arena involves a lot of processes, transactions and models. A choice on a model determines how the business will sail across the sea of success. Therefore, before the big launch, think about the model you prefer. Research about it and be well acquainted by how it operates. With regards to that, a choice on either B2C or B2B causes a variance on how certain activities are undertaken i.e. Marketing, Logistics and Transactions.

B2B vs. B2C- What are they and how do they Operate?

B2B business model involves transactions between a business entity and another business entity. The transactions arise due to the selling of goods/services by a business to another business.

B2C on the other refers to transactions between the consumer and the business. A supermarket is a better example. The transactions carried out also arise due to the selling of goods/services to the end user-consumer.

How do they Vary…?

1. Marketing strategy

B2B business uses a complex marketing strategy that focuses on the businesses which are potential customers.They invest a lot towards attracting more entities to the business. The marketing strategy adopted by B2C businesses is a simple one that focuses mostly on Consumers. The activities involved are simple. The form of communication used is that which allows the consumers to understand faster and make a decision.

2. Purchasing procedures

Every activity has got the right steps to be followed during execution. Similarly, the business models also have varied procedures with one having complex ones and the other simpler ones.B2B requires that consultations are made and all protocols observed before any transaction is done. However, B2C entails near-zero procedures as the consumer is only expected to decide on based on the desires and wants. The business is also tasked with the responsibility of availing products for purchase.

3. Quantity of stock required

Both B2B and B2C require a considerable amount of stock to operate effectively. Although, the two models vary especially when the question of “How much/How many arises”.B2B requires a large volume of merchandise since it deals with bigger entities that purchases in bulk as compared to B2C where the purchases made are in smaller amounts.

4. Brand creation

In B2B, the brand is created through the mutual relationship between the businesses. The focus of B2B is more on the relationships created with other businesses and making it longterm. In contrast, B2C focuses on creating its brand through promotional methods and enhanced products. The focus of this model is more on the products.

5.Buying and selling Cycle

The duration taken by the buying and selling in B2B is long since a lot of steps are involved. However, it’s different from B2C as the steps are simplified thus the shorter duration. The consumer buys fast and the selling is also done using the shortest time.

6. Room for negotiation

Negotiations are mostly driven by factors that prevail in the business.B2B, therefore, has got adequate room for negotiation with regards to logistics, pricing and quantity.The business entities purchase the goods in bulk thus enabling them to get friendly discounts. They can also negotiate on how the goods they have bought will be transported to their business premises. Even though B2B has got a better room, B2C on the other hand has got minimal room for negotiation since the goods purchased are usually in smaller quantities.

So which one is better?

The decision on which business model to go for is depended on;

1. The operating costs involved
2. The operating procedures
3. The availability of potential customers
4. The Prevailing business policies
5. The availability of capital

A deeper review and research will enable you to decide on which business model to choose. Just as mentioned earlier-The success of the business is dependent on the model chosen. You can also choose both depending on the above factors.