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What does 'Business To Business - B To B' mean

Business to business, also called B to B or B2B, is a type of transaction that exists between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business refers to business that is conducted between companies, rather than between a company and individual consumers. Business to business stands in contrast to business to consumer (B2C) and business to government (B2G) transactions.

BREAKING DOWN 'Business To Business - B To B'

A typical supply chain involves multiple business to business transactions, as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business to consumer transactions. In the context of communication, business to business refers to methods by which employees from different companies can connect with one another, such as through social media. This type of communication between the employees of two or more companies is called B2B communication.

B2B Relationship Development

Business to business transactions require planning to be successful. Such transactions rely on a company’s account management personnel to establish business client relationships. Business to business relationships also must be nurtured, typically through professional interactions prior to sales, for successful transactions to take place. Traditional marketing practices also help businesses connect with business clients. Trade publications aid in this effort, offering businesses opportunities to advertise in print and online. A business’s presence at conferences and trade shows also builds awareness of the products and services it provides to other businesses.

B2B E-Commerce

The internet provides a robust environment in which businesses can find out about products and services and lay the groundwork for future business to business transactions. Company websites allow interested parties to learn about a business's products and services and initiate contact. Online product and supply exchange websites allow businesses to search for products and services and initiate procurement through e-procurement interfaces. Specialized online directories providing information about particular industries, companies and the products and services they provide also facilitate business to business transactions.

B2B Examples

Business to business transactions are the backbone of the automobile industry. Many vehicle components are manufactured independently and auto manufacturers purchase these parts to assemble automobiles. Tires, batteries, electronics, hoses and door locks, for example, usually are manufactured by various companies and sold directly to automobile manufacturers. Service providers also engage in business to business transactions. Companies specializing in property management, housekeeping and industrial cleanup, for example, often sell these services exclusively to other businesses, rather than individual consumers.

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