What is B2B? How is the B2B Business Model Applied?

There are many trade models in the world. One of the extremely popular ones among these models is the B2B sales model. For those who are considering entering e-commerce for the first time, you can find all the details about B2B, which is a model that should be evaluated, in the rest of our article.

What is B2B?

B2B is briefly a trade model that describes the sales process between companies. The abbreviation of B2B stands for "business to business".

In the B2B business model, the manufacturer or seller sells its products directly to companies, not to the end-user. It is possible to sell all kinds of products via B2B, but its difference from B2C is that sales are generally made in bulk or through agreements, rather than individually.

The B2B sales model is very common in the automotive industry, property management, cleaning, and industrial products. B2B sales can be made in many categories, ranging from raw material sales to ready-to-sell products.

What Are Examples of Business-to-Business (B2B)?

To better understand the B2B sales model, it will be useful to examine some examples.

In fact, the B2B trade model is highly common both in Turkey and across the world. For example, Samsung is among Apple's largest suppliers for some of the parts used in iPhone manufacturing. Apple also procures many parts from brands such as Intel and Panasonic, which are actually its competitors in the market.

The sector where B2B transactions are most common is undoubtedly the automotive industry. Most car parts are produced independently, and brands often source parts from their competitors in the market.

Another popular B2B sector is the industrial cleaning industry. Companies providing industrial cleaning services sell services only to companies, excluding end-users. This also applies to catering companies. They only sell services to companies, factories, and businesses.

What Are the B2B Company Types?

Companies that use the B2B business model are also divided into various models within themselves. These models include:

• Product-based B2B

• Service-based B2B

• Software-based B2B

Product-Based B2B Model

The product-based B2B model is a sales model where a business sells physical products to another business. A product-based B2B business can be a supplier or a manufacturer. It can perform raw material sales or final product sales.

In addition, B2B companies can use physical or online sales models, or both. Furthermore, since the product-based B2B model is geared towards physical sales, it requires a higher startup capital compared to other types.

Some firms that carry out product-based B2B sales are:

• Picky Bars

• SwagUp

• Microfiber Wholesale

• eFashion Paris

Service-Based B2B Model

A company with a service-based B2B model, exactly as the name suggests, sells various services to businesses. Examples of service-based B2B businesses are:

• Consulting services

• Marketing agencies

• Call management services

• Employee training services

• Translation services

There are quite a lot of service-based B2B companies because they are much simpler to scale. Additionally, setting up and running service-based B2B companies is easier compared to product-based businesses.

Service-based B2B companies can have an online or physical presence, or both.

Software-Based B2B Model

Software-based B2B companies can fall into both the product-based and service-based B2B models. While service-based software companies are concerned with providing services, there are also those that offer product-based software services.

The software-based B2B model can be divided into two as follows:

• Product-oriented software-based B2B model

• Service-oriented software-based B2B model (SaaS model)

Product-Oriented Software-Based B2B Model

Services such as invoicing and offering accounting software can be given as examples of product-oriented software B2B models. These types of software companies produce a product that offers digital services and sell it to companies.

Service-Oriented Software-Based B2B Model (SaaS Model)

Companies offering SaaS, i.e., software as a service, usually work with a subscription payment system. CMS, CRM, and analysis software, or internet infrastructures can be shown as examples of this.

Who Is the Target Audience of B2B?

Unlike B2C businesses, B2B customers are harder to define. It is obvious that their target audience is other businesses, but their size, decision-makers, or purchasing centers will vary depending on the types of businesses they target.

Rather than marketing to individuals who can buy a product immediately like a typical B2C business, B2B businesses must strategically reach out to other businesses.

A customer's purchasing decision must be in the best interest of everyone involved in the business, so as a B2B business, your marketing plans must be precise, clear, and engaging.

How to Make B2B Sales? - The Sales Process in 5 Steps

1. Research Process

You must research the market you will enter in the best possible way. You should identify the industry, the customer, and the problems in the best way and adapt your product according to the situation.

2. Creating a Customer Profile

After the research, building a profile for the potential customers you will sell to is highly important for the next step. The customer profile allows you to find out whom, what, and how you will sell.

3. Marketing

After creating your customer profile, you can start marketing your business and the value you will create for them by identifying which channels they are active in.

4. Contacting the Customer

Establishing physical contact with customers is actually one of the best methods for the B2B model. Therefore, if possible, hold physical meetings with your potential customers.

5. Closing the Sale

After getting in touch with your customers, if you managed to complete the previous steps "correctly", all that is left is to close the sale. Congratulations!

What Are the Advantages of the B2B Business Model?

The B2B business model has a number of advantages. We can list these advantages as follows:

• Larger Sales: Since the B2B sales model is usually based on wholesale or continuous agreements, it does not deal with individual sales. For this reason, sales volumes are higher.

• Larger Turnover: Since bulk sales take place, the turnover rate will also be higher compared to individual sales.

• Easy Supply Chain Management: Since it is based on agreements, you know what and how much you will sell, which makes management and procurement easier.

• Scalable: B2B is more scalable compared to other sales models. This provides an advantage in prediction of potential growth rates.

What Are the Disadvantages of the B2B Business Model?

Along with the advantages of the B2B business model, there are of course disadvantages too. We can list these disadvantages as follows:

• Limited reach: This situation of course varies depending on your market and industry, but since you do not sell to the end-user, you always have a limit regarding customers.

• Discounts: When you make wholesale sales, customers usually demand more discounts from you, and this can hurt your profitability.

• Receiving payment: Your sales will usually be based on agreements and terms, and you will not always be able to receive payments on the exact day. A more difficult financial planning.

• Long Decision Processes: Since customers will make bulk purchases and contracts, the sales process will sometimes take a long time. This means more time cost.

Why Is B2B Important?

B2B will always remain important for businesses because companies will always need to receive services. This situation goes from products that can be seen as minor to major services, and the most important thing for a business model is sustainability. B2B is a sustainable business model.

What Is B2B E-commerce?

The B2B e-commerce business model covers the purchase and sale of products between companies through online sales channels. It focuses on sourcing goods and services from one business to another.

Since both parties are commercial entities, B2B e-commerce transactions are evaluated logically, based on needs, and comprehensively, rather than impulsively. They usually involve longer-term interests.

Adapting the B2B business model to e-commerce has many advantages. We can list these advantages as follows:

• Better customer experience

• Reaching larger audiences

• Having more data

• Low-cost marketing channels

In this article, we tried to answer all the questions related to the B2B business model that could be useful to your business. We hope it has been beneficial to you!

Frequently Asked Questions About B2B

Below you can find frequently asked questions and answers about the B2B business model.

What Does B2B Dealership System Mean?

The B2B dealership system is the name given to the system that B2B businesses create for their customers.

Is Trendyol B2B?

No, Trendyol is a B2C business.

What is Amazon B2B?

Although Amazon uses the B2C sales model, its subsidiary AWS (Amazon Web Services) is a B2B sales platform.

What is Digital B2B?

Digital B2B is the B2B business model carried out over the internet.