Get to know the term B2B, here's how it works to business examples

The term B2B is an acronym for Business to Business. B2B is one of many business models E-commerce. In addition to these business models, there are several business models E-commerce others, such as B2C, C2B, C2C.

Before building a business, it is important to understand the business model that will be followed. Thus, a business strategy can be prepared and executed properly. The following is an explanation related to the definition, characteristics and business examples of the B2B concept.

What is B2B (Business to Business)?

Business to Business is a business model in which business activities or transactions occur between business people, from one company to another. This kind of business model is generally run by manufacturers, distributors, retailers, drop shipper and perpetrator similar business.

B2B companies provide or supply other companies' operational needs to keep their business running. Companies with this business model also support all types of businesses, which produce goods or services, to be offered to other companies.

B2B Concepts and How it Works

Concept business to business This is by starting from the relationship between business people who need each other. Usually, each of the related business people, already know each other's company background.

From the relationship between companies, there is an exchange of data and information, in a B2B transaction. The transaction is carried out on a long-term basis, with a mutually agreed contract. So that the same service and standards will be created.

There is also how it works, including the following:

• A company's demand for goods or services from other companies occurs.
• Other companies bid for raw materials to be used in a production process or the operations of the requesting company.
• There is a negotiation process until the contract agreement between the two parties.
• Established cooperation between these companies in order to meet the needs of their end consumers.

For information, not all B2B companies target their products to end consumers, some B2B companies only target their products to companies, without reaching end consumers directly.

Concept Characteristics Business to Business

Unlike the general business model, here are some characteristics of the concept business to business:

• B2B transactions are valid for the long term to maintain supply chain and production continuity.
• Long-term relationships and relationships between B2B companies and buying companies are generally long-standing.
• B2B transactions are carried out by going through complex procedures, until they reach the stage of compatibility and agreement between the companies involved.

Some Examples of B2B Business

There are also examples of businesses that are usually involved in the model Business to Business These include, among others:

• Raw Material Supplier

A B2B company as a provider of raw materials will supply the needs of other companies. Where other companies as a provider of ready-to-use products for end consumers. The impact of this activity is to support the supply chain in economic activities.

• Marketing Services

In introducing their products in the eyes of the public to reach consumers, companies need marketing activities. For companies that do not have the resources in that field, they can take advantage of the services of a marketing company that provides several services such as: content marketing to social media marketing.

• Financial Services

In running a business, of course, can not be separated from the activities of calculating finances. The company can take advantage of the services of other companies as financial service providers, in optimizing complex business finances, in accordance with applicable standards and regulations. For example, with accounting services, bookkeeping, taxation, management and others.