Business-to-Business

Business-to-business (B2B) refers to commerce models where companies primarily provide goods or services to other companies, as opposed to dealing with individual customers. Business-to-business partnerships are a common component of most supply chains.

A manufacturer, for example, will buy materials from one company, then sell their finished wares to a wholesaler. The wholesaler provides merchandise to the retailer, who sells to the public. Every entity in the chain is operating B2B with the exception of the retailer, whose sales transactions are considered “business-to-consumer” (B2C).

Due to the regularity of sales and the volume of each order, the dollar value of B2B transactions is significantly higher than B2C. Companies can sell in both environments, but that is less common.