If you are wondering what B2B is in simple terms, we will explain right away that it is a business model when one organization sells its products to other companies. Sales in this case are complex, and the deals are long-term. B2G in sales They often last for months and are accompanied by lengthy discussions.
Businesses of the B2B (business-to-business) model include:
- suppliers of resources from which cotton, ore or gas are produced;
- suppliers of component goods, such as flour or screws;
- suppliers of finished products and services, including fabrics, factory machines;
- companies providing outsourcing and consulting services;
- companies that create websites, antiviruses and B2G in sales other programs for legal entities.
In all these cases, the products and services job function email database of companies are used by other organizations. For example, Intel supplies Apple with components for the production of smartphones, and then the finished products go to the consumer. The B2B model is used in the automotive industry. Parts are manufactured by different companies, and car manufacturers buy them to assemble vehicles. B2B also works in the real estate market. Companies that manage real estate or provide cleaning services for industrial buildings work for the benefit of other organizations, not the end consumer.
Characteristics of the B2G model
Long sales cycle
Based onCSO Insights report, 74.6% of B2G in sales take at least 4 months, and in 46.4% of cases it takes about 7 months to bring a customer to a purchase. For example, a company needs to automate marketing. The marketing director whatsapp for business: the future of customer service and engagement discusses this with the marketing department specialists to find suitable options. After choosing an automation system, you need to get approval from the finance director. In addition, you may need to consult with the IT director to make sure the purchased program is compatible with the existing ones. Only after all these steps will it be possible to conclude a deal.
Lots of discussions
The more expensive the goods or services are, the more people are involved in the transaction.Gartner information, a purchase can involve 6 to 10 people responsible for decisions in the company. In the B2B segment, there is such a concept as a “decision maker” (DM). This is a person who makes the final decision on a particular transaction. In some companies, the decision on a deal is made not by one person, but by several, for example, responsible employees or the board of directors. Therefore, sometimes, in order to sell a product, a manager must convince several people at once.
There are significantly fewer buyers than in B2C
For example, Kaspersky provides its services to both individuals and organizations.company information, its products are purchased by more than 400 million users worldwide and over 220 thousand companies.
High transaction cost
In the B2B segment, contracts are india number list usually concluded for several million. Let’s say Xiaomi offers mobile phones for 10 thousand rubles. To earn 20 million rubles, the company needs to sell 2 thousand smartphones. A machine tool manufacturer needs to sell only 2 machines to earn the same amount.
Rationality
B2B deals are usually high value and high risk. Therefore, the buying firm will often analyze several offers and choose the one that will earn more. This partly explains the long sales cycle and many negotiations.
Long-term cooperation
Since B2B transactions are long and involve a lot of risk, the parties are set up for long-term cooperation. Most companies use B2B services regularly when they need raw materials or supplies to make goods.
What is B2C
B2C (from English business-to-consumer) is a business model in which a company sells goods to the final consumer or individual. This applies to the work of stores, entertainment centers, catering establishments, online stores and cinemas.