Glossary

B2B = Business to Business

Definition:

 

Business-to-business (B2B) is a sales term describing transactions between businesses — like when a wholesaler buys from a manufacturer or a retailer buys from a wholesaler.

Does B2B mean business-to-business?


Why, yes it does.


What are the 4 types of B2B?


Producers: These companies purchase goods and services and turn them into a different end-product. This category includes manufacturers and service providers like General Motors, McDonald’s, and Apple. Whether it’s GM buying steel, Apple sourcing microchips, or McDonald’s purchasing beef, they need those materials to make their products.


Resellers: These are companies that sell products and services made by other companies. Retailers, wholesalers, and brokers make up this category like Target and Costco.


Government: The world's largest purchaser of goods and services is the U.S. government. Whenever they need parts for a NASA shuttle or printers for the FBI, a B2B transaction takes place. Local and state government entities apply here as well.


Insitutitions: This category includes nonprofit organizations like churches, hospitals, charitable organizations, universities, civic clubs, etc. Much like government entities, these organizations also have to buy goods and services from other businesses to provide their services to the public.


What is an example of a B2B business?


Many companies that are well-known for serving consumers also do a lot of B2B business. Examples include:

  • Amazon through Amazon Web Services (AWS)
  • Apple through partnerships with companies like Intel and Panasonic
  • Any auto manufacturer



However there are also more strictly B2B companies like:

  • Quill: A Staples ecommerce subsidiary that sells office supplies to small and medium sized businesses.
  • Upwork: A job search platform that connects freelancers with employers.

What is meant by B2B model?


In most B2B business models, each organization benefits in some way from the transaction and typically has similar negotiating powers.


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