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Major Differences Between B2B and B2C

You must have heard the terms B2B and B2C, and you could be wondering what they are. We are going to highlight differences between B2B and B2C. B2C stands for Business to Consumers. B2C are businesses that sell their products or services directly to consumers. B2B stands for Business to Business. B2B are businesses that sell their products and services to other businesses.

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Main Differences Between B2C and B2B

B2C and B2B differ in different ways, like in the decision-making process, purchasing process and also in the marketing process. We are going to discuss various ways in which B2B and B2C differ.

1. Purchasing Process

In B2B, the purchasing process is usually long and takes time. Customers have to order goods they require to have them delivered to their premises. Also, before purchasing goods, the board must meet to deliberate on the products to be purchased and in what quantities.

In B2C, the purchasing process is usually easy and straightforward. Customers walk to businesses to buy products and services they require. Consumers do not have to consult other parties to purchase commodities.

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2. Decision Making

In B2B business models, the decision-making process is slow and involves many stakeholders like the board of directors and the tendering committee. Those in management must meet and deliberate on the quantity of products to be purchased and where to purchase them.

In B2C, the decision-making process is fast and does not require any consultation. The consumer doesn't have to consult other parties to purchase goods.

3. Payment Process

In B2C, consumers select goods that they require and then pay before consuming them. The payment methods can be in the form of cash, debit cards or credit cards. Prices are usually the same for all consumers.

In B2B, businesses make orders for the products they want. Usually, payment is made after goods have been delivered through a logistics system. Payment is not made instantly. Prices vary from one customer to another, depending on the quantity of orders made. 

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4. Customer Relationships

In B2B, businesses want to build personal relationships for long term business. As such, customers can keep on coming back for more purchases. Also, there is a chain of relationship like, wholesaler-retailer relationship, supplier-manufacturer relationship and -wholesaler relationship.

In B2C, businesses build a transactional relationship with the consumers. Businesses have less time to know their consumers. The main focus is for businesses to sell more and high-quality products. There exists retailer-consumer relationship. 

5. Quantity and Frequency

In B2B, the quantity of goods ordered is usually high. Businesses purchase goods in large quantities and the frequency of purchase is usually low. It is because goods ordered are usually for resale and made in large quantities.

In B2C, the quantity of goods ordered is usually low. Consumers purchase products or subsistence use and as such, they buy in fewer quantities. However, they purchase goods frequently since they do not purchase in large quantities and do not maintain large stock.

6. Average Prices of Products

Generally, in B2B, the average prices of products are usually high. It is because businesses buy products in large quantities and mostly, payment is made through bank transfers. This way, businesses get high discounts since they can purchase large quantities.  

In B2C, the average prices of products are usually low since consumers buy products on a small scale. Consumers do not qualify for large discounts due to small scale purchases. In most cases, payment is made in cash.