Did you know that businesses can also be customers? If you didn’t, this one’s for you!
It’s no secret that e-commerce has steadily grown, especially since the Covid-19 pandemic hit us.
This blog post gives a detailed overview of B2B (Business to Business) and B2C (Business to Consumer) e-commerce and the key differences between business models.
What is B2B E-Commerce?
Business-to-business or B2B e-commerce is when one business sells products to another online.
In other words, online shopping but instead of a standard customer, B2B customers are other businesses. For example, an e-commerce business selling office supplies in bulk will target other companies to shop from them.
B2B purchasing decisions are taken after much more deliberation as the buyers purchase on behalf of the whole company.
What is B2C E-Commerce?
This doesn't require an introduction. B2C (Business to Customer) e-commerce are organizations sell to individual customers online.
Since B2C customers are individuals shopping for themselves or buying a gift for a loved one, they might make purchasing decisions based on what they like, what looks prettier, etc.
Amazon is a famous example of a B2C e-commerce business.
Differences Between B2B and B2C Businesses
Now that you're familiar with the two business models, let's take a look at the main differences between the two:
1. Target Customers
The target customers for B2B and B2C are entirely different.
B2B sells to other businesses, while B2C targets individual customers. It's important to note that the two customers have different purchasing patterns.
An organization would likely buy things in bulk as they’re buying them for all of their staff to ease. Examples include office chairs, desks, laptops, and other essential office items.
On the other hand, B2C customers tend to make small purchases—for example, a new pair of jeans from the new fall collection of their favorite apparel brand.
However, while the B2B buyers order large quantities, they might wait to shop again as their office chairs work fine. B2C customers do make small purchases but tend to come back to shop more from time to time!
The ordering process for B2B companies takes longer than B2C ones as B2B buyers often invest a large amount of money in acquiring the products in bulk.
This is because, as we’ve said above, their buying decision affects multiple departments.
2. Marketing Content
Unlike B2C e-commerce companies, B2B businesses don’t rely on marketing as much as they should in today’s competitive world.
However, the world has shifted towards a more customer-centric environment, and B2B platforms have started noticing it.
The marketing content directed towards B2B buyers is more informational than promotional. For example, detailed product specifications and buyer manuals, video demonstrations, live support, FAQs, etc.
If you’re running a B2B business, your clients seek precise information they can learn from and apply to your products.
Optimize the content on your e-commerce platform according to your customer’s needs and habits. In the case of B2B, informative, precise, jargon-based content will work!
B2C companies use flashy and creative content to attract individual customers to shop from their e-commerce websites.
Informative content for B2C product descriptions and specs is still needed, but it's not as severe as with B2B businesses.
As with any e-commerce website, SEO is crucial to driving customers to your website, regardless of whether you have a B2B or B2C business. For more information, read our blog post, How To Drive Organic Traffic To Your E-Commerce Website.
Both B2B and B2C businesses use social media marketing, email marketing, PPC, etc., to promote their products/services to their respective target markets.
3. Pricing
B2B organizations usually have long-time customers. Since many B2B customers have a high customer lifetime value, their sellers tend to focus on the long-term sales cycle, unlike B2C e-commerce.
An example of this is leniency in prices because B2B businesses expect their customers to stay with them for an extended period and, in the future, can sell more products to them.
They're also open to negotiable prices since B2B buyers often buy in bulk. Some products are too complex and customized to meet the customer's demands, so different prices are charged to each customer.
B2C pricing works differently. They’re fixed, and the prices remain fixed. However, there are discounts, offers, and sales where customers can purchase the products at lower prices.
4. Website Design
The website is the most essential part of any e-commerce business.
B2B websites often have simple homepages, giving the website a clean, more clinical look. That’s because their customers know what they’re looking for and would want to find it immediately.
That's also why the CTAs used on B2B websites are straightforward, like 'Book a Demo' or 'Buy Now.'
They may also have a Click-to-call option where businesses can discuss product specifications, quantity, and pricing.
B2C websites rely more on graphics and promotional copy to sell to customers.
Individual customers prefer self-service and a fast checkout process, so a call option is likely absent from the B2C websites. Instead, a number is listed on the Contact Us page if they wish to contact the business.
5. Order Size
B2B organizations have lesser customers than B2C businesses. However, B2B customers tend to buy in large quantities. B2B businesses often have a minimum pricing level that customers must meet.
For example, as a B2B buyer, you must buy at least $1,000 worth of goods from the business.
There’s no such requirement from B2C customers; they can buy something that costs as low as $5 or as expensive as $10,000.
How Can B2B Businesses Improve?
As we said above, B2B companies can't stay stuck in the past times. They should match the level of B2C businesses to facilitate their customers in the best way possible.
Here are some tips: create a multichannel presence, as social media is an integral part of everyone’s lives now. Make it easier for your customers to reach out and connect with you.
Moreover, offer them 24/7 customer support. B2B transactions are complex, and communication between the buyers and sellers should continue after the purchase. Be available for your customers should they need to contact customer support.
Conclusion
We hope this blog post helped expand your knowledge on B2B vs. B2C e-commerce and their key differences.
If you’re interested in starting a new business based on either of these business models, remember that it’s all trial and error, and practice makes perfect. Learning the differences is the first step!