B2B vs B2C: What are the differences?

What is B2B? 

B2B stands for business-to-business. For example, if your business is selling a product or service to another business, this is B2B marketing. In the same analogy, if you’re a business buying from another business, then you are creating the conversion needed to support B2B marketing. 

The pros and cons of B2B 

So, what exactly are the advantages and disadvantages of B2B?

Pros:

• Target audience – B2B marketing targets a very specific audience, which can sometimes be a downside – but in this instance, it’s an upside. It means that B2B marketers know who their customers are, and therefore marketing for them becomes simpler. 

• Repeat orders – A massive bonus of B2B is the likelihood of customers making repeat purchases. The more repeat customers a B2B business has, the easier it is to have a steady cash flow. This also helps when attracting new customers via word of mouth. 

• Efficient and convenient – Selling in online bulk orders means that products are shipped out quickly and efficiently. This convenience is increased when customers place repeat orders. All they have to do is click ‘buy again’ and their order is repeated for the next month. Simple and fast.

• Larger profits – Due to the large amount of bulk orders, and the higher prices of orders, B2B will generally accumulate higher profits. Many businesses place discounts on larger orders to entice customers to buy more, but this only helps to increase sales and, therefore, profits. 

• Product possibilities – By having a customer base who are reliant on purchasing from you every month, or every week, you are bound to receive some feedback. Whether that includes how to improve your products, or it’s about adding new products, feedback is extremely valuable. The chance to expand your product range will only help to solidify your place within the market niche.

Cons:

• Complex set up – Because of the large quantities of orders, a B2B website needs to be able to handle these sorts of checkouts with ease. If customers find it difficult to make a purchase, it will ruin your chances of repeat buys. So, make sure that your website is up to scratch. 

• Product information – When it comes to selling to other businesses, your customers expect you to be experts in your field – that includes having extremely detailed product information. If you have lots of items available to buy, this can be time consuming, but it’s extremely important.

• Marketing costs – It can get expensive to market to new customers, and more so when your audience are big companies. B2B marketing needs to specifically target other businesses, and this can prove harder than a B2C campaign.

• Large purchases – B2B misses out on selling to individual customers, and is reliant on large purchases from customers. Without them, the costs can quickly stack up. If repeat orders are not made monthly, it can put a massive strain on B2B businesses. 

What is B2C? 

B2C translates to ‘business-to-consumer’. This type of marketing is specifically targeted towards the individual. For example, if you purchase a new vacuum cleaner online, you have played your role in a B2C transaction.

The pros and cons of B2C 

Pros:

• International outreach – B2C is not limited to local regions. With smaller orders to individual personnel, they can ship internationally at low costs. This also means they have the opportunity to market internationally, too. 

• Increased conversions – With people buying smaller amounts of cheaper products, consumers are more likely to buy once they find what they’re looking for. This is normally due to the lower price and cheaper shipping.

• Growth potential – There’s a huge opportunity for B2C shop growth. Why is this? Because there are so many customers they can target, and through successful marketing strategies, this can convert to immense growth.

• Brand identity – There is more of an emphasis on brand identity for B2C, and these businesses create more of a personal connection with their customers. Personalisation can also help to market specifically to individual buyers.

Cons:

• Extreme competition – Competition is fierce in the world of B2C, as there are lots of online and offline stores fighting for the top spot in similar niches. This makes marketing so much more important.

• Profits – As B2C companies have many smaller orders, with lower overall values, profits can fluctuate. B2C will usually require a lot more customers to match the numbers of a B2B business.

• Customer service – Smaller orders to lots of different global customers can cause havoc if something goes wrong. If an incorrect order is sent out, or a package is damaged, customer services need to be there to pick up the pieces. This can make it tricky for a B2C business.

• Possibility of fraud – B2C companies are also more likely to fall victims to fraud. This might involve scam emails being sent to their customers, or fake websites being created under the same name. As detailed in Forbes, this can be harmful to customer retention and can damage their reputation. 

What are the differences between B2B and B2C? 

We have covered briefly the pros and cons of each, and there are some slight differences between the two. 

But what are the stand out differences between B2B and B2C? 

• Repeat buys – B2B companies are more likely to see repeat buys, which can rack up their profits very quickly. However, B2C businesses will not necessarily see this. If there are any B2C repeat buys, it will usually be a smaller amount of less value.

• Wider audience – B2C companies have no limit on who they can sell to. Targeting individuals gives them a wider pool of potential customers. B2B businesses, however, have a very niche clientele who they sell to.

• Rational or emotional? – A major difference between B2B and B2C is what drives their buyers. B2B customers are rationally driven, for example B2B sell to other businesses who are looking for very specific, purposeful products. B2C buyers, on the other hand, are emotionally driven, and can make impulsive purchases. This is not to say all B2C consumers are like this – but they are definitely driven by their emotions.

Looking for some help marketing your B2B or B2C business? Take a look at what we do, and if that piques your interest, get in touch with us today.

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