Start selling with Shopify today
Start your free trial with Shopify today—then use these resources to guide you through every step of the process.
Start free trial
![What Is Business-to-Business (B2B)? Definition and Guide - Shopify (1) What Is Business-to-Business (B2B)? Definition and Guide - Shopify (1)](https://i0.wp.com/cdn.shopify.com/b/shopify-brochure2-assets/2ecdaa09da44408d3c2a2b9cba3a2c07.png?originalWidth=1005&originalHeight=1288)
![What Is Business-to-Business (B2B)? Definition and Guide - Shopify (2) What Is Business-to-Business (B2B)? Definition and Guide - Shopify (2)](https://i0.wp.com/cdn.shopify.com/b/shopify-brochure2-assets/8262a99b5702f964162106b94a23ad2d.png?originalWidth=1005&originalHeight=1288)
![What Is Business-to-Business (B2B)? Definition and Guide - Shopify (3) What Is Business-to-Business (B2B)? Definition and Guide - Shopify (3)](https://i0.wp.com/cdn.shopify.com/b/shopify-brochure2-assets/16db235a9390238e6f9b8fd2a5c29680.png?originalWidth=1005&originalHeight=1288)
blog|Starting Up
Business-to-business – “B2B” – refers to commerce between two businesses rather than to commerce between a business and an individual consumer. Transactions at the wholesale level are usually business-to-business while those at the retail level are most often business-to-consumer (B2C).
by Shopify Staff
![What Is Business-to-Business (B2B)? Definition and Guide - Shopify (4) What Is Business-to-Business (B2B)? Definition and Guide - Shopify (4)](https://i0.wp.com/cdn.shopify.com/s/files/1/0070/7032/files/What_is_B2B.jpg?v=1671553679)
Business-to-business, or B2B, refers to commerce between two businesses rather than between a business and an individual consumer.
Transactions at the wholesale level are usually business-to-business, while those at the retail level are most often business-to-consumer (B2C).
The dollar value ofB2B transactions is significantly higher thanB2C because businesses are more likely to purchase higher priced goods and services—and purchase more of them.
A bicycle manufacturer, for example, will purchase a truckload of bicycle tires, or a coffee manufacturer will buy a massive, industrial bean grinder. Compare that with what’s purchased by a biking enthusiast or the individual coffee aficionado.
How business-to-business selling is different
Selling to a business is different from selling to an individual consumer. Key sales and marketing differences forB2B transactions include:
- Selling sometimes requires participating in a bidding process by responding to a purchaser’s request for proposals, or RFPs. On the business-to-consumer side, this compares to asking various auto dealers to provide their best offer on a specific make and model.
- The decision-making process on a purchase can take days, weeks, or months, depending on how the purchasing company works and the size and nature of the order.
- Purchasing decisions are often made by committees, so each member needs to be educated and “sold.”
- The dollar value of goods or services sold is much higher than on the consumer or retail level, so the buyer needs to take steps to minimize risk. That sometimes involves requesting a product prototype or customization.
B2Bdoesn’t exclude B2C
A company selling to businesses can also sell directly to consumers. A bead manufacturer selling its beads in bulk to costume jewelry manufacturers might also package them in smaller quantities sold to crafters at craft stores.
Acell phone manufacturer can sell in bulk toservice providers or one at a time to consumers shopping online. A firm that provides health and wellness consulting to corporations can also advise individuals one-on-one or in group presentations.
It’s about the customer, not the transaction size
While business-to-business transactions often involve high prices and volume, they can also happen on a much smaller scale, like when a small business sells products or services to another small business.
The hallmark of business-to-business commerce then, is the participants—two businesses rather than a business and a consumer.
Read more
- How To Start a Business in South Carolina in 8 Easy Steps
- Indiana LLC: How To Start an LLC in Indiana in 12 Steps
- Rhode Island LLC: How To Start an LLC in Rhode Island in 12 Steps
- Mississippi LLC: How To Start an LLC in Mississippi in 11 Steps
- Ecommerce Basics: A 101 Guide
- Kansas LLC: How To Start an LLC in Kansas in 11 Steps
- Montana LLC: How To Start a Montana LLC in 12 Steps
- Idaho LLC: How To Start an LLC in Idaho in 11 Steps
- What Is a Business License? Definition and Guide
Business-to-Business FAQ
What is meaning of business-to-business?
Business-to-business (B2B) is a type of transaction that occurs between two businesses, such as a manufacturer and a wholesaler, or a wholesaler and a retailer. Business-to-business transactions usually involve goods and services that help one business to operate. Examples include raw materials for production, components for product assembly, and services such as advertising or consulting.
What are the 4 types of B2B?
- Manufacturer-Distributor: This type of B2B relationship involves the purchase of products from a manufacturer by a distributor, who then resells them to the end consumer.
- Manufacturer-Retailer: This type of B2B relationship occurs when a manufacturer sells its products directly to a retailer who then resells them to the end consumer.
- Manufacturer-Wholesaler: This type of B2B relationship occurs when a manufacturer sells its products directly to a wholesaler who then resells them to the end consumer.
- Service Provider-Client: This type of B2B relationship involves providing services such as marketing, consulting, logistics, and financial services to businesses.
by Shopify Staff
Published Nov 7, 2022
Share article
by Shopify Staff
Keep up with the latest from Shopify
Get free ecommerce tips, inspiration, and resources delivered directly to your inbox.
By entering your email, you agree to receive marketing emails from Shopify.
popular posts
Social Media OptimizationHow To Make Money on Instagram in 2024 (9 Actionable Ideas)Starting UpHow To Start an Ecommerce Business: Guide for 2024GuidesWhat Is Dropshipping and How Does It Work? (2024)Find an Idea
The point of sale for every sale.
Start free trial
popular posts
Sell OnlineHow To Create a Website in 9 Steps (2024)Starting UpHow To Start an Online Store in 2024 (Step-by-Step Guide)Find an IdeaHow To Make and Sell Merch Your Fans Will Love (2024)Sell Online10 Best Ecommerce Website Builders for Your Online Store (2024)
popular posts
Social Media Optimization
How To Make Money on Instagram in 2024 (9 Actionable Ideas)
Nov 8, 2023
Starting Up
How To Start an Ecommerce Business: Guide for 2024
Sep 1, 2023
Guides
What Is Dropshipping and How Does It Work? (2024)
Dec 5, 2023
Sell Online
How To Create a Website in 9 Steps (2024)
Sep 20, 2023
Starting Up
How To Start an Online Store in 2024 (Step-by-Step Guide)
Nov 23, 2023
Find an Idea
How To Make and Sell Merch Your Fans Will Love (2024)
Dec 2, 2023
Sell Online
10 Best Ecommerce Website Builders for Your Online Store (2024)
Nov 6, 2023
![What Is Business-to-Business (B2B)? Definition and Guide - Shopify (14) What Is Business-to-Business (B2B)? Definition and Guide - Shopify (14)](https://i0.wp.com/cdn.shopify.com/b/shopify-brochure2-assets/c46f986d892538f4b0a15f25692330f7.png?originalWidth=1420&originalHeight=1040)
Keep up with the latest from Shopify
Subscribe to our blog and get free ecommerce tips, inspiration, and resources delivered directly to your inbox.
Unsubscribe anytime. By entering your email, you agree to receive marketing emails from Shopify.
Latest from Shopify
See allPodcasts
Fuel Business Growth With This Founder’s Winning YouTube Strategy
Mar 21, 2024
Inside This Black-Owned Bookstore’s Massive Organic Growth
Mar 19, 2024
Podcasts
A Latin American Game's Remarkable Journey to US Target Stores
Mar 12, 2024
Retention
44 Best Thank You for Your Purchase Messages
Mar 11, 2024
Sell Online
50+ Best Shopify Stores to Inspire Your Own (2024)
Mar 11, 2024
Starting Up
Oklahoma LLC: How To Start an LLC in Oklahoma in 6 Steps
Mar 11, 2024
Sell anywhere with Shopify
Learn on the go. Try Shopify for free, and explore all the tools you need to start, run, and grow your business.
Start free trial
Try Shopify for free, no credit card required.