B2B stands for business-to-business and is a type of sales model that involves the exchange of products, services and information between two or more businesses. This model can take place in a variety of ways, including through e-commerce or traditional channels like retail stores and office spaces.
Companies that sell to other companies are called B2B sellers or wholesalers. These businesses typically supply raw materials or a finished product to other companies, such as a garden hose manufacturer buying rubber from a supplier.
These transactions are generally larger in scope and size than the same purchases made by individual consumers or small businesses, as they typically involve a variety of people and decision-makers involved with the purchase. Time is also usually required for the transaction, with multiple parties involved in the process and potential negotiation over the price and makeup of a sale.
There are many different types of goods that can be sold in the B2B market, ranging from hardware and clothing to furniture and food supplies. There are even some specialized products, like e-commerce software and digital goods.
Some businesses that have an online presence also offer a range of services, such as accounting, consulting, and telemarketing. These services help companies to communicate with customers and establish business relationships, as well as provide a platform for selling their own products.
Other types of B2B businesses are those that sell software exclusively developed to serve a specific purpose or function, such as invoicing software or CRM (customer relationship management) software. These businesses often have extensive IT departments to ensure that their systems are secure and maintained.
This model is a popular choice in many sectors that have an overabundance of suppliers and buyers, such as the e-commerce industry. Companies such as Amazon, Alibaba and Upwork all have marketplaces that are designed to connect the buyers and sellers of goods and services in a business-to-business environment.
This business model can also be used to service government agencies, where a government agency puts up an RFP for projects that a company will bid on. This enables the ecommerce company to build up a clientele of government entities and make money through their contracts.