Understanding B2B and B2C eCommerce

Most eCommerce websites follow one of the two business models - the B2B (Business-to-business) model and the B2C (Business-to-consumer) model. Although today's eCommerce sphere is filled with numerous selling models, we can say that all of them fall under either the B2B or B2C business model. Among these business models, we, as a general public, are familiar with the B2C model. In a B2C transaction, we buy a product online through a dedicated eCommerce store or an eCommerce marketplace.

The B2B ecosystem may be new to the general public, but it is the most promising eCommerce market out there, offering a major strategic opportunity. Although not as widespread as B2C, the B2B market has been booming over the past few years as more people choose to buy online. While a B2C transaction typically sells a product to its end users, the B2B transaction often involves selling to other businesses. This means that the B2B transactions would naturally involve large orders as they deal with massive quantities.

The buying process in both B2B and B2C purchases is also drastically different, B2B deals with rational buying, whereas B2C relies mostly on impulsive purchases. Even though there are many differences between the B2B and B2C business models, they do have some common grounds. Despite how differently both B2B and B2C eCommerce are implemented, they are dependent on the customer experience.

As the B2C business interacts with the end consumer directly and since it's been around much longer than B2B eCommerce, the retail business has somewhat perfected the user experience aspect. There is a growing trend among B2B companies to bring in a B2C-like experience in their eCommerce stores. Hence it is no surprise that the B2C user experiences set the standards for its B2B counterpart.

Understanding the Difference Between B2B and B2C Business Model

Apart from the few common grounds shared by the two business models, the B2B, and B2C businesses operate and function quite differently. Below we discuss some of the key differentiators between a B2B and B2C business.

1. Payment

The B2C model has a much more streamlined payment process than B2B because it is pretty straightforward. The B2C transactions are easily carried out with a simple credit/debit card payment. However, that is not the case for B2B business transactions as they deal with large shipments and, ergo, large purchase amounts. In the case of B2B eCommerce payments, flexibility is more important than anything else.

Hence include multiple payment methods such as wire transfer, payment through credit, partial payment of invoices, etc. In B2B eCommerce, it is not uncommon to incorporate a mix of online and offline payment methods. Furthermore, B2B payments are often subjected to approval from the company's finance management, while the B2C ones are self-determined by the customer.

2. Products

B2C products often turn out to be a simple product like a pair of shoes or some form of fashion accessory. B2C products do not come with complicated instructions or even a well-detailed product description, and they are rarely customizable. Whereas the B2B products come with a detailed description of the products and usually require high customization. The detailed description of the product is owing to the substantial order value, and the information provided by the seller may even include diagrams, manuals, and brochures.

3. Buyers

In a typical B2C purchase, the consumer is free to choose whether or not to make a particular purchase. This is a short and straightforward buying cycle where the onus of making the purchase solely lies on the consumer. Whereas a B2B purchase is subjected to order approval. The buying decision is made by a procurement officer. The B2B purchases are well thought out and never an impulsive decision, which means that the buying cycle is much longer than the B2C.

4. Pricing

The pricing for a product in a B2C business is the same for all customers. Although you can see customized discounts being offered to retail buyers, the pricing remains pretty much consistent for every customer. As the B2B model deals with a significantly larger sales order, and since B2B businesses prefer to establish long-term relationships, the pricing is subjected to customization.

B2B often employs personalized pricing based on the buyer's past orders, frequency of order, and more. Furthermore, the pricing may be subjected to negotiations making the pricing in B2B completely different from the ones seen in B2C.

5. Frequency of Purchase

As far as a B2C purchase is concerned, it is safe to assume that the buyer is unlikely to repeat the same order twice. Even when the B2C buyer returns to your eCommerce store, it is more than likely to buy a different product. There is no telling when the customer may return as the buying decisions are often impulsive, and hence most if not all B2C purchases are one-time purchases.

In a B2B business, however, the purchases are often made regularly, and they opt to buy from a reliable supplier rather than try new products. As mentioned before, the B2B model relies on long-term partners for their product. Reorder and replenishing stock is a priority for B2B brands, and this works best if you have established a long-term working relationship with the supplier.

6. Conversion Approach

Both B2B and B2C businesses use various marketing strategies such as PPC, social media ads, and so on. But it is the B2C brands that make the most out of strategies like these as their business model is best suited for such eCommerce optimization. Although B2B brands do employ the same strategies from time to time, they still mostly rely on inbound traffic for their sales. The B2B transactions are based on trust and long-term relationships, and hence marketing campaigns are often limited to finding new customers.

7. Finding the Product

Finding the right product is easy for a B2C buyer; all he/she has to do is type in the product name. In B2C, the product can be found almost immediately from the search result as long as you use the relevant keywords while searching. However, when it comes to B2B, orders are often placed using stock keeping unit or product identifiers. Why? Because unlike B2C buyers, the B2B buyers do not have the luxury of making silly mistakes. A refund or product return is not a practical solution because of the vast quantities they deal with. Furthermore, the B2B buyer often uses the details on their documentation throughout the process.

8. Displaying Stock Availability

As far as a B2C end user is concerned, all he/she needs to know about the availability of a particular product online is whether it is in stock or not. That is all the data that is required by the B2C end-users to make a buying decision as far as the stock is concerned. If you are starting a B2C store, then it'll be more than enough to implement a simple 'in/out of stock' status on your store. But, if you are running a B2B eCommerce store, then you'll have to show them the precise quantity available and lead-time estimates. Why? Because the B2B buyers buy in bulk and need their specific goods delivered to them.

9. Shipping Address

Although B2C customers may not necessarily have their products delivered to the same address every time, it is the general tendency. We often see the B2C customer use the same personal shipping address, and it is improbable for someone to use more than two or three addresses. It is, therefore, easier to implement a simple one-click checkout process for B2C. On the other hand, businesses may often require several delivery addresses. For example, consider a construction company that needs the same raw materials delivered to multiple sites.

The Difference Between B2B and B2C eCommerce Platforms

As we have already discussed that both B2B and B2C businesses are unique in almost every aspect. It is then only natural that their platforms are also unique and different from each other. Here we discuss what makes the eCommerce platform for B2B and B2C businesses unique and their differences.

1. Product Information

The product information displayed on a B2B and B2C store is quite different from each other. While B2C demands a concise short description of the product, the B2B audience requires a more detailed and technical specification. This is because the buying behavior of both B2B and B2C buyers are different.

The B2B purchase process is always based on a well-informed decision, and the B2C purchase is often an impulsive decision. So how does this affect how the product information is presented on their website? It is said that 70% of the B2B buyers rely on videos to assist in their buying decisions. Making a sale on either B2B or B2C stores is dependent on how you present your product and its details.

Product Description Characteristics in B2B vs. B2C Stores

2. Homepage Design

One of the fundamental differences that set apart the B2B and B2C eCommerce stores is their homepage. Once again, the B2C website has attractive and maybe even flashy homepages that can captivate the user into exploring your products. The B2C eCommerce stores are built to drive conversions by presenting the users with an enhanced user experience.

B2B eCommerce stores make it a point to showcase their experience and reliability in the hopes of making a good impression on potential customers. As a result, most B2B eCommerce websites do not go for the flashy homepages usually seen in B2C stores. Instead, the B2B eCommerce stores are built to be informative to appeal to the B2B buyer.

Homepage Design Focus in B2B vs. B2C

3. Catalog and Pricing Model

We have already discussed that the pricing method used in both B2B and B2C businesses are different. While the former uses a pricing system based on their relationship with the individual customer, the latter base it on a more general or broad customer base. More importantly, B2B deals with wholesale buyers, and B2C stores deal with retail buyers.

Naturally, as the order's volume increases, the price per item goes down as far as wholesale transactions are concerned. Therefore, it is much easier to implement the pricing for your B2C eCommerce store compared to B2B. While both B2B and B2C websites employ dynamic pricing on their stores, the focus is given to different aspects in both.

In a B2C store, the pricing is consistent, and the price per piece does not go down by increasing the order quantity. However, the price does become dynamic for the B2C stores in specific scenarios like first-time purchase, discount coupons, season sales, etc.

Dynamic Pricing Focus in B2B vs. B2C

4. Minimum/Maximum Order Quantity

The Minimum Order Quantity or MOQ is one of the essential requirements of a B2B eCommerce store. One simply can not buy a single item from a B2B business, and it must be impossible to do so in your B2B eCommerce store. On the contrary, the B2C store has no such minimum limit, and customers can make a single product purchase.

Although the B2C eCommerce store does not have a minimum order quantity, it does have a Maximum Order Quantity barrier. This means that there is a limit to the number of products that can be purchased from the B2C store. As soon as the customer's order exceeds a set value, the B2C website displays a message alerting the customers that the order quantity has been exceeded.

Minimum/Maximum Order Quantity Focus in B2B vs. B2C

5. Checkout Process

The checkout process is the last stage of the customer's purchase journey, and the stark difference in B2B and B2C checkout processes are clearly distinguishable. The B2C setup for the checkout process is pretty simple and straightforward. In B2C, the customer navigates through the cart, the payment gateway, and subsequently the acknowledgment with little to no hindrance.

The checkout process for B2B is, however, much more complicated. For starters, the typical B2B checkout process is a combination of a pre-programmed checkout process with live human assistance. Human intervention is introduced to make your business more reliable, given that B2B deals with a significant amount of money. However, trends do change, and your website needs to be prepared for both personnel assisted checkouts and self-checkouts.

A talented eCommerce partner like Virtina can easily set this feature up for your B2B website and ensure that your customer's checkout process is smooth and easy. There are a few things that you should look out for in your checkout process in case of both B2B or B2C.

Checkout Process Focus in B2B vs. B2C

6. CTAs or Call-to-action

The CTAs or Call-to-action on a website may seem relatively unimportant at first glance. But, the truth is that they can have a much bigger impact on your eCommerce store than you might think. They have the potential of reassuring the customers about your product/service. As far as B2B businesses are concerned, their CTAs should be aligned to their product and how it can benefit their customer's business.

CTAs are also capable of generating curiosity in your target audience's minds and pushing them to explore your website. While B2B appeals to the customer's business through the CTAs, B2C appeals to individual customers' benefits. What is common about CTAs in both B2B and B2C is that they are both human-centric, and its success is based on the emotional connection they can make.

CTA Focus on B2B vs. B2C

7. Customer Support

The customer support provided by B2B eCommerce stores and B2C eCommerce stores is also unique. The B2B eCommerce stores deal with bulk orders and they need to be well-informed because the stakes are much higher as compared to the B2C stores. Therefore, it should come as no surprise to you that the B2B business follows "First Contact Resolution."

B2C customers, on the other hand, spend way less in comparison and the order volume is, without question, the differentiating factor. The B2C buyer enjoys the luxury of not being answerable for their purchase as the decision is self-driven. The logistical challenges faced by the B2C business is easily solvable as long as you have the right systems in place.

Customer service is essential in both B2B and B2C businesses; however, what they focus on and how they deal with the customers are far from similar.

Customer Support Focus in B2B vs. B2C

The Difference Between B2B and B2C in Marketing

Just like the functioning and selling of B2B and B2C is unique, the marketing of both is also diverse and unique. The way you approach marketing and how it's also executed changes because of the difference in various factors to be considered while coming up with an efficient marketing approach. Below we discuss the aspects that you should consider for B2B and B2C marketing.

1. Overall Buyer Experience

The overall buyer experience in B2B focuses on presenting more information about the product. The B2C, on the other hand, tries to appeal to their buyers with the latest products launched and products on sale. This is reflected in their respective marketing tactics as well.

2. Group Vs. Individual Decision Making

When it comes to marketing, the target audience is of the utmost importance. While the B2C seller is pitching their ideas to the individual customer who is the sole decision-maker, the B2B seller must keep various personnel involved in the decision making.

3. Long or Short Buyer Lifecycle

The B2B buyer lifecycle is unpredictable and rarely reliable. The customer may or may not choose to buy from you sooner or later. It is dependent on your marketing skills and their needs. On the other hand, the B2B buyer has a long buyer cycle with periodic purchases to meet their business's needs.

Conclusion

The cardinal difference between the B2B and B2C business and their eCommerce stores is not how they function or present themselves but on their buyer persona, buyer intention, and decisions. Everything else that follows is merely a reflection of these fundamental factors that define a B2B and B2C business. Hence you must understand these essential requirements of both B2B and B2C businesses.

Once you have figured out what matters and what doesn't matter to the B2B and B2C business, it is only a matter of implementation. The B2B and B2C eCommerce stores are unique with their own set of specific requirements. You must meet these requirements with advanced and innovative solutions. One abundantly clear thing is that the future of both B2B and B2C business lies in eCommerce, and the sooner your business goes online, the better.