What is the difference between B2B and B2C companies?
B2B and B2C are two common but different types of business models. In this article, we take a closer look at B2B and B2C companies to tell you all the information you need to know about them.
What is a B2B business?
The meaning of B2B is ‘business-to-business’ and B2B companies sell products or services, or both, to other businesses. In a typical supply chain, it is common for business-to-business transactions to occur as companies regularly purchase raw materials for use in their manufacturing processes. For example, a phone manufacturer can purchase glass from another business so they can create screens to use in their phones.
B2B business examples
B2B companies can be found in a wide range of industries and some of the largest B2B business examples in the world today include:
- Amazon Business, the B2B arm of eCommerce giant Amazon
- Salesforce, the US cloud-based software firm
- WeWork, which provides physical and virtual coworking spaces
- Kinaxis, the supply chain management, sales and operation planning software company
- EcoEnclose, which provides businesses with environmentally friendly packaging
What is a B2C business?
B2C means ‘business-to-consumer’, and B2C companies are defined as those who sell products or services directly to consumers. Traditional examples of B2C companies include restaurants and high-street retailers, but today, many B2C businesses are engaged in eCommerce. The term B2C actually rose to popularity during the dotcom boom when it was mainly used to refer to online retailers who sold to consumers via the internet.
Examples of B2C companies
Like B2B companies, B2C companies are present in a wealth of industries. Some of the most famous examples of B2C businesses include:
- Global fast-food chain McDonalds
- Tesco, the UK’s largest supermarket chain
- TUI, the German leisure, travel and tourism company that sells package holidays to consumers
- Award-winning UK digital-only bank Starling Bank
- Netflix, the online streaming service
Difference between B2B and B2C companies
The most important difference between B2B and B2C companies is how they sell their products and services. B2B companies are focused on serving the needs of businesses whilst B2C companies are focused on serving the needs of consumers. As each type of company is servicing a different market, the way products and services are advertised. The global B2B eCommerce market is also nearly five times larger than the B2C market, according to Statista.
However, there are companies that operate under a B2B and B2C model. For example, Amazon generally serves the needs of consumers, but it also has a B2B arm: Amazon Business.
What are B2G businesses?
B2G stands for ‘business to government’ and B2G companies sell products and services to governmental agencies on any level, including local and national. Although B2G companies do not tend to be as common as their B2B or B2C counterparts, many businesses sell to government agencies and the types of B2G businesses vary widely. For example, they can be anything from a business that provides IT infrastructure for a local council to one that builds tanks for the Ministry of Defence (MoD).
