Business time B2B vs B2C ?
It`s business time! As a business owner you must have heard that B2B is the best strategy that allows you to build your way to success. Let`s dig a bit deeper in what B2B definition exactly means and how it can benefit you. As you can figure, B2B is shorten from “business to business”. “Business to business” requires a strong chain of business connections and the buying process in this model is a bit longer than usual. It can include personal offers to the different suppliers and marketers and buyers, of course. B2B “business to business” is a model with a lot of business flexibility/ The core of this business model stands the terminology that express the transmission of information or goods, between two business product brands ( including distributors, manufacturers, etc.).
If you are a company with more than 500 employees, you are surely using the B2B model already. B2B model is mostly used by big brands with large manufacturing process, requiring a lot of elements and business connections with other manufacturers. For example, if you are producing bikes, you surely have relations with tires and bells manufacturers and you are making purchases and transactions. That`s a B2B model, making you a business player with certain control over the market prices and business stats.
What is valuable in your niche?
That`s your business time, of course. Taking care of your business is just a necessity to grow it faster. Having the right connections in a B2B model can help you speed up that process. Here`s a tip: hire a real experienced business operations manager ! This is the person you should not make any compromises with their qualities! B2B “business to business” requires someone who makes the right researches and plan sheets for a proper B2B model decisions, powering each part of it with maximum capability. B2B business manager is who will save a lot of your business time, making the proper business researches and product process development. Imagine yourself having to read all this documentation of a 1000 people, offering tires for your bike! That`s a huge minus in your own business time to broadcast your company. And surely not the core of a B2B.
B2B vs B2C – if you are confused of the many business terminology – don`t be! You already know what B2B is- long word short – “business to business”. Now let`s figure B2C. It`s actually pretty simple – B2C stands for “business to consumer”. Your B2C business model is targeting directly the end consumer who is the buyer of your goods. No other businesschains,no other potential business hands shaken. Here the payment process is more simplified – the price of your product is the same price for all the customers.
If you run a B2C promotional offer, its targeting all your potential buyers. While in B2B model`s market, the price would be different for each customer group. According to lot`s of factors- for example the B2B logistic channels may differ per customer. Also, they receive business invoice with certain payment rules. You can also implement those models in a website-based B2B business systems. Have in mind, that building a business online in a B2B model, requires much more mechanism chains to be set than B2C.
Speaking of business justification and software implementation in B2B and B2C, that surely depends on the model you run. Below is a table, registering the main differences between B2B vs B2C marketing model and CRM (customer relationship management) main points.
|B2B CRM||B2C CRM|
|Data base is relatively small||Data base is bigger|
|Buying cycle is small||Bigger buying cycle|
|Budget is bigger||Budget is smaller|
|Wider marketing decisions||One-on-one marketing|
|Contact database is big||Contact database is small|
|Task management is difficult||Task management is easy to control|
You can see that depending on B2B vs B2C marketing model, there are quite a lot of marketing differencesthat your business will meet. Currently there are marketing solutionsthat can cover both of your marketingbusiness strategies quite successful. Social media is also a key factor for B2B companies, who decide to go with paid advertisements on Facebook or LinkedIn. In B2B market, when the supplier satisfies the customer, it is almost guaranteed that the purchase he makes will become recurrent. In this context, the customer is looking for a private space with ease and speed of purchase process. This also gives you the advantage of sending the client personalized offers, discounts and purchase strategies. Also, that private space for the client is very important for the complexity of the documents he needs to have for the product- business tax, invoices, purchase downloads.
You need to make sure that the software you purchase is really backed up with all the tools either for B2C ot B2B business model. Then of course, as mentioned before, B2B model requires much more complicated software tools.Remember: In B2B model the private area of the client is more important or as is important as the public part. While in B2C model is just the opposite!
Taxes for the business models for B2B and B2C are mainly regulated by the country where the business is located in, but there are also some specifics. Let`s review a scenario where your business is located in the EU,in England for example.
- Tax rates for B2B business model:
For example, if the B2B business is located in England, then VAT is charged according to England rates. If the potential customer is based in another country from the EU, no VAT is due if the customer provides their own registered VAT number. The customer will have to pay VAT in their own country tax offices with special tax mechanism. The business owner, a.k.a “seller” on the other hand, should record the VAT number and submit it with the EC sales list. What about if the customer is outside the EU? A VAT is not charged at all. The same is valid for the reversed case – if the B2B business is based outside the EU and the customer is in the EU.
- Tax rates for B2C business model:
The B2C business is separated on tax categories. For telecommunication, broadcasting and electronic services applies that if the customer is in an EU state, then VAT applies according to his country tax rates. If the customer is outside the EU, then VAT does not apply on sales.
For all other business categories- VAT applies according to the business registry country ( England for example in the case above), if the customer is in the EU. If the customer is not in the EU- VAT does not apply. Should you choose higher business tax rates over product quality? Yes, you make the choice as an owner. If you are not sure – you can always make your own research. Take a look in business online services and company profiles data.
Business 80/20 rule.
You may have or you may not have heard about it. The so called “business 80/20 rule” is actually also well known as Pareto principle. It states in general that for most of the events, about 80% of the results come from at least 20% of the causes. Confusing, right? Let`s translate it to business language, shall we. It means that 80% of business sales come from 20% of customers. That rule can be used for almost any aspect of business life. Even in makreting! In any chain of a complex B2B or B2C marketing chain. As well where you need to define campaign sales efficiency versus company spending budgets, for example.
If you have a long period chain of purchasing goods- you can also define customers buying efficiency by pre given factors as locations, gender, interests groups etc. In business 80/20 rule`s core is to manage to find which clients are circled in the 20% amount that makes up 80% of your sale goals. That is valid both for B2B and B2C business leads.
B2B and B2C Online Services
In business online services sector, B2B and B2C online services are most of the time standing on the two sides of the tunnel. While B2C is directed to the end consumer, its very difficult nowadays to bring and maintain their businesses online with direct sales. And that comes from the huge competition in each sector.
But the B2C plus is, these type of business online services does not require huge maintenance and complicated administration. It can be even directly funneled and entirely located on a huge re seller base like Amazon, Ebay and others.
The minus of B2C online business is that there is no much flexibility- i.e. not personal client offers. What is valid for one customer is in most cases valid for all – promo codes, offers, newsletters etc. In B2B business online services, on the other hand, a lot of flexibility and customization is possible therefore- a good B2B online software is needed and specialists in administrating such online business service.
As a B2B plus- you can build online customer panel with specified offers for the different business groups and a lot of products targeting. B2B or B2C business online services- make sure you lead your business the proper way according to their structure. A specialists consultation is always an option, if you are not sure with your next business move.
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