B2B is a form of the business model in which one business provides service to another to achieve the end goal or is the pure transaction between two or more companies.
Let us understand with an example.
Suppose company A is producing any product, and company B is responsible for providing customer support regarding the product to achieve the end goal. So, this is the perfect example of the B2B business model.
Type of B2B business model:
Like many businesses, the B2B business model categorizes into several other categories.
Customer-centric business model:
In this business, the model customer has the same amount of value even after-sales. This approach helps keep the existing customer in hand to make a business from them in the future. In this model customer is the central figure to do business.
E-Commerce companies such as Flipkart, Amazon are the best example of a customer-centric business model.
Buyer Centric business model:
Big companies are using this kind of business model as they have a more significant purchase rate. In this model, buyers set a portal where the seller comes with a quotation to approach buyers to understand how they can benefit their business. Finally, buyers choose the best company as per their specifications and budget. Walmart is the best example of a buyer-centric business model.
Intermediary business-centric model:
The intermediary business model is a widely used business model where an intermediary provides a common platform for buyers and sellers to choose appropriate services or products. In return, the intermediary charges commission from the parties involved in the transaction.
Olx is the best example of an intermediary business-centric model.
Benefits of B2B business model:
There are several advantages while choosing the B2B business model.
- Business predictability is higher as compared to the B2C model.
- B2B model also helps reduce overall expenses and focus on core division like if company A is producing any product and company B is responsible for sales of the product. Then company A can keep the focus on making products without much thinking about sales.
Overall product and service quality is very high in the B2B model as compared to B2C.