What is B2B Business and How It Differs from B2C

What is B2B Business

The abbreviation B2B stands for business-to-business and refers to trade relationships between two companies. It’s a business model in which companies sell products and services to other companies—not to end customers, which is the domain of B2C (business-to-consumer).

The Difference Between B2B and B2C Lies in the Customer

In B2B business, the focus is on providing products and services to other companies so they can operate more effectively and sell their own goods and services. In B2B, the end consumer is not the direct customer—but their needs still drive the B2B business.

A typical example of B2B business is the supply of raw materials that another company uses to create a product for sale to a customer, or materials it needs for its operations—such as office supplies or printer toner. It can also include outsourced services like marketing by an agency, website design from a graphic studio, or the provision of CRM systems, project management tools, and other SaaS solutions.

B2B Business Has a Smaller Market and Greater Revenue Risk

The B2B market is generally smaller, and companies have fewer clients than in B2C. However, when customers decide to purchase goods or services, the orders are usually larger, more valuable, and recurring. It’s one thing to sell insulation material for individual homes at a building supply store, and quite another to regularly supply it to construction companies insulating multiple large buildings each month.

This brings another characteristic of the B2B business: greater uncertainty in consistent cash flow and more complex financial planning. Since companies deliver larger orders regularly, a delayed payment on just one of them can result in a significant loss of income—potentially in the tens or hundreds of thousands.

Approaching Clients in B2B Sales

B2B business is typically associated with cold calling and arranging face-to-face meetings, which then lead to sales. It can also involve networking at events or social selling.

Companies also offer their products and services through e-shops. However, since B2B clients have different expectations, needs, and habits than B2C customers, B2B e-shops look different from those we’re used to in B2C:

• they usually offer fewer products,
• they focus more on detailed product descriptions and usage (including case studies, product videos and tutorials, articles, and comprehensive customer support),
• prices vary for different buyers (e.g. partner companies, loyalty programs),
• shipping and payment are also handled individually,
• the e-shop may be accessible only to pre-registered companies, where, for example, VAT payer reliability is verified.

Longer Sales Process in B2B Business

Closing deals in B2B sales is more complex and takes longer than in B2C. This is because:

• orders in B2B are larger and more expensive,
• they require more consideration and informed decision-making,
• multiple people within the company are involved in the decision process.
  
  

It’s not an impulsive purchase—the decision to buy a product isn’t emotionally driven or immediate like it often is in B2C sales.

Building Client Relationships is the Foundation of B2B Sales

Salespeople need to reach decision-makers within companies and convince them of the benefits of their products. That’s why companies must continuously improve and innovate their offerings, ensuring their functionality—there are fewer customers in the market, and they can’t afford to lose them to competitors.

To succeed in B2B business, companies must place even greater emphasis than in B2C on strong customer service and put significantly more effort into developing effective client outreach strategies and building customer loyalty.

With our Raynet CRM, you can store all your B2B client information clearly and in one place. You’ll see which stage of the sales process each client is in, access their contact details, and track all the specifics of your business relationship.