B2C = Business to Consumer

What is B2C?

Business-to-consumer (B2C) is a sales term that refers to selling goods and services directly from a business to an individual consumer, the end-user.

What is business-to-consumer B2C model?

While B2C applies to any direct-to-consumer selling, it has come to be associated with running an online store. There are generally five business models within the B2C umbrella:

• Direct Sellers: This is the most common model in which consumers buy goods from online retailers.
• Online Intermediaries: These go-betweens — like Expedia or Etsy — connect buyers and sellers but don’t sell an actual product.
• Advertising-based B2C: This model uses free high-quality content to attract site visitors who then encounter and interact with digital ads. HuffPost, and other sites like it, use this model.
• Community-based: In this model, social media platforms use the communities they’ve built around shared interests to help advertisers market their goods and services to site users.
• Fee-based: Direct-to-consumer sites charge a fee for access to their content. This model typically includes publications like The New York Times or entertainment services like HBO Max.

What are the benefits of a B2C business model?

• Lower prices: Direct to consumer business models are often able to charge lower prices due to not having to involve multiple 3rd parties.
• 24/7 reach: B2C eCommerce allows your business to generate revenue at any time. Post a product or service on your website, and you can make sales while you sleep.
• Quicker sales cycle: B2C traditionally has a much faster sales cycle than B2B, which can experience months-long sales processes because of required buy-in from various stakeholders.

Why is the B2C market less attractive than B2B for a Saas Startup?

• Higher revenue potential: B2B customers typically have larger budgets and are willing to pay more for software that helps them solve complex business problems. This means that SaaS startups can potentially generate more revenue per customer in the B2B market.
• Longer customer lifetime value: B2B customers tend to have longer lifetimes than B2C customers, as businesses are less likely to switch providers once they have integrated a SaaS product into their operations. This means that SaaS startups can potentially generate more revenue over time from each B2B customer.
• Lower customer acquisition costs: B2B customers are typically easier to reach and market to than B2C customers, as they are often concentrated within specific industries or markets. This can result in lower customer acquisition costs for SaaS startups targeting the B2B market.
• More predictable revenue streams: B2B customers often sign long-term contracts and pay recurring fees, which can provide SaaS startups with more predictable revenue streams than the more volatile B2C market.