What is B2B (Business to Business)?

Sabrina Polin: For every one B to C exchange, there are many B to B’s. Why? And what does that mean? When you order something online, that’s a B2C exchange, or business-to-consumer. B2B, or business-to-business, is the exchange of products, services, or information between two businesses. The B2B market is vast and includes everything from payroll processors to industrial suppliers to software developers. B2B companies exists in every industry, and every B2C company generates B2B activity. For instance, the automobile industry. Every truck or car that ends up in a consumer’s driveway contains dozens of parts and products that the manufacturer purchased through various suppliers in a B2B transaction. B2B transactions typically occur under three circumstances: When a business is sourcing materials like automobile parts; when a businesses sourcing services, such as hiring an accounting firm to manage finances; or when a business is sourcing and products to resell, like a dealership purchasing a car from the manufacturer to sell to a customer. There are significantly more B2B transactions than B2C, because for every one B2C transaction, there are dozens, hundreds, or even thousands of B2B transactions that have to happen first.

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