What is B2B?

Business-to-business

Business-to-Business (B2B) is a term commonly used to describe commerce transactions between businesses like the one between a manufacturer and a wholesaler or a wholesaler and a retailer i.e both the buyer and the seller are business entity.This is unlike business-to-consumers (B2C) which involve a business entity and end consumer, or business-to-government (B2G) which involve a business entity and government.

The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

Etymology

The term "business-to-business" was originally coined to describe the electronic communications between businesses or enterprises in order to distinguish it from the communications between businesses and consumers (B2C). It eventually came to be used in marketing as well, initially describing only industrial or capital goods marketing. Today it is widely used to describe all products and services used by enterprises.