B2B is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. B2B stands for Business-to-Business, refers to business that is conducted between companies, rather than between a company and individual consumer.
Understanding Business-to-Business (B2B)
Business-to-business transactions are common in a typical supply chain, as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business-to-consumer transactions.
In the context of communication, business-to-business refers to methods by which employees from different companies can connect with one another, such as through social media. This type of communication between the employees of two or more companies is called B2B communication.
Example of Business-to-Business (B2B)
Business-to-business transactions and large corporate accounts are commonplace for firms in manufacturing. Samsung, for example, is one of Apple's largest suppliers in the
production of the iPhone. Apple also holds B2B relationships with firms like Intel, Panasonic and semiconductor producer Micron Technology.
B2B transactions are also the backbone of the automobile industry. Many vehicle components are manufactured independently, and auto manufacturers purchase these parts to assemble automobiles. Tires, batteries, electronics, hoses and door locks, for example, are usually manufactured by various companies and sold directly to automobile manufacturers.
Service providers also engage in B2B transactions. Companies specializing in property management, housekeeping, and industrial cleanup, for example, often sell these services
exclusively to other businesses, rather than individual consumers.
Key Takeaways of B2B
Business-to-business (B2B) is a transaction or business conducted between one business and another, such as a wholesaler and retailer.
B2B transactions tend to happen in the supply chain, where one company will purchase raw materials from another to be used in the manufacturing process.
B2B transactions are also commonplace for auto industry companies, as well as property management, housekeeping, and industrial cleanup companies.
Meanwhile, business-to-consumer transactions (B2C) are those made between a company and individual consumers.