If you are a living and breathing human, you have been party to a Business to Consumer (B2C) trade. So by the end of this article, you should understand the meaning of B2C and should be able to identify and differentiate Business to Consumer (B2C) from a Business to Business (B2B) model.
What is the Business to Consumer Model – B2C Meaning
A Business to Consumer or B2C model is when a business sells its product directly to end-users. It is the most visible type of business trade, as more people are exposed to B2C companies.
Good examples of B2C companies are supermarkets, online marketplaces, retail chains, fast food sellers, etc. B2C trades are often between individuals and resellers or manufacturers with retail outlets.
Traditionally B2C companies were brick and mortar businesses but with the advent of e-commerce, B2C is used more to refer to online portals that sell their products on the internet.
Types of B2C Models
Manufacturer to End-User
One of the most common B2C trades is between the manufacturer and the consumer. A manufacturer can directly distribute their products to consumers without using a middleman.
Intermediaries to End-User
The most common type of B2C that everyone is familiar with. A great example of a middleman/intermediary is a supermarket like Walmart, which sources a variety of products from different manufacturers and resells them to consumers in a central location.
Marketplace to End-User
Online marketplaces are another kind of B2C operating model as they provide manufacturers and consumers a platform on which they can meet. Marketplaces usually have security measures, like buyer protection, to foster a reliable and safe transaction atmosphere.
B2C vs B2B (Business to Business)
Business to Consumer (B2C) marketing is impersonal and takes a one-size-fits-all approach, whereas Business to Business (B2B) takes a personalized approach to each customer. B2C sellers do not rely on building personal relationships with their clients, while B2B thrives on personal networks and tailored orders.
B2C targets a large group of potential customers, potentially in the millions, by selling small quantities to each customer. Relatively, B2B companies only need a few returning clients who make bulk purchases. The pool of B2B potential clients is very small compared to B2C.
Marketing and Sales
Marketing and sales in B2C are done through mass advertising and publicity tactics. In contrast, B2B relies more on networking, personal connections, demand satisfaction, and online marketplaces. B2C companies create demand for their product. For example, luxury car companies stimulate demand through posh adverts, hero-worship tactics, etc. Whereas in B2B another company requests a custom product and the B2B seller fulfills those specifications.
B2B transactions have an active supplier and an active customer dynamic. This means that the customer is actively involved during the manufacture and design of the product. In contrast, in B2C the customer plays a passive role as only the supplier is active in the design, manufacture, and distribution of the product.
B2B communication is bi-directional as both the supplier must communicate for a while before a transaction occurs. By contrast, B2C communication is one-sided as the supplier only needs to advertise their products to end-users.
Additionally, the transactions in B2C are usually instant. Whereas in B2B, before a transaction happens, there are thorough negotiations or discussions about the transaction.
Relationships in B2B, usually last a long time as buyers and suppliers prefer to continue working with business partners who understand their needs and expectations. Comparatively, B2C relationships are short-term affairs that end once a transaction is completed.
Conclusion – B2C meaning
Many companies adopt a dual business model approach where they make both B2C and B2B sales. By doing so, they expand their potential customer base, consequently making more sales.
To summarize the meaning of B2C – it is any business model, where a company’s primary customers are the end-users of its product.