B2B (Business To Business)

What does B2B mean?

B2B (Business to Business) is a term for companies that sell products and services to other companies. This may include SaaS products, B2B marketing companies and much more.

If you own a small business, you'll probably have to work with a B2B company at some point in your journey. It's important to understand what B2B is, why it matters to your business and how you can leverage it to improve your own business.

Conversely, there is also B2C, which together with B2B are the two typical sales models used. B2C (Business to Consumer) is the opposite of B2B, as B2C companies sell their products or services to private consumers.

B2B companies are businesses that sell products that other businesses need to operate and grow. In addition, B2B companies have a completely different target audience than B2C: they offer the raw materials, finished parts, services or consultancy that other companies need to operate, grow and make money. But this is not as easy as it sounds. As a B2B company, it is very important to establish a good relationship with its customers, as the relationship between the company and the customer helps to influence the sale of the product or service to the customer. The better the relationship between company and customer, the more likely the customer is to buy the company's products and services.

B2B or B2C?

Depending on the types of services and products you sell, you can use this perspective to assess whether you want to serve as a B2B or B2C company. If you choose to establish your business as B2B, it is a good idea to use online platforms such as LinkedIn to brand your products and services that other businesses can benefit from as well as your company branding. If, on the other hand, you choose to be a B2C business, you may not need to brand your products and services as much, as private customers do not buy based on the same parameters as businesses.

B2B buyers relate to, for example:

• Whether there is economic gain?
• Will they benefit from your products and services in the long term?
• Do your products and services benefit their entire business?

These parameters, however, do not concern B2C buyers. They have only themselves to deal with, as they are private customers. Therefore, they relate to the following, for example:

• What do they need here and now. They do not consider whether the product or service will be used in the long term.
• Have a greater tendency to impulse buy.
• Should only concern themselves with their own financial gain and not that of others.

If you're interested in learning more about B2C, read our post on B2C.

Examples of B2B companies

There are B2B companies in every industry from manufacturing to retail. Wherever business takes place, you can be sure that a number of B2B suppliers and consultancies are active. Every B2C business requires specific products, services and professional advice, so every B2C business generates B2B activity.

InboundCPH is a B2B company in that we do not sell products or services to individuals - our focus is on helping your business become visible on Google.

An example of a traditional B2B market is in car manufacturing. If we use Tesla as an example, you might think that it is Tesla that produces the whole car, but that is not correct. In every model of any car, there are a sea of other companies' products that help produce a car. These include the tires, hoses, batteries and electronics that are essential to the proper functioning of the final consumer product, which in this case is the car.

The manufacturer purchases the products from its various suppliers and incorporates them into the final product. When you buy a car from one company, you are buying parts created by other companies from around the world. Business-to-business sales are therefore an important part of any industry's supply chain.

However, today there are many different B2B markets, and they are very different from each other. In general, when talking about B2B markets, there are four different types that are most often mentioned. These will be briefly outlined here:

• Manufacturers – This is the most classic B2B market. These are companies that buy products from other companies, which they then use to produce their own products or services, as described earlier with the example of Tesla. Examples of other types of businesses that are in this market are restaurants, airlines and dentists. Restaurants need food such as meat and salad to cook, airlines need fuel and gasoline to take off their planes, and dentists need machines and sharp instruments to treat their patients. Manufacturers buy these products from other companies that produce these types of goods.
• Resellers – Companies that buy products from other companies but resell these products in their original condition belong to the reseller market. These are typically companies working in the retail sector such as Elgiganten. Elgiganten buys products from manufacturers and resells them in their stores to both business and private customers. This is the case with a number of companies in the retail sector, that they act as both a B2B and B2C reseller.
• Governments – Governments buy many different things that they make use of. These range from primitive things like new computers and new printer paper to improving security personnel and preparing public transport.  
• Institutions – Typically, the institutional market consists of non-profit organisations such as Red Cross, churches and hospitals. Like governments, they buy large quantities of products and services, but typically at a low cost. As a rule, they negotiate on the basis that the cheaper the products, the more people can benefit from the products, since organisations in the institutional market serve a large number of people.

B2B Frequently Asked Questions