Business-To-Business (B2B) Definition

The term business-to-business, or B2B, refers to commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Businesses can also buy from other businesses in order to obtain goods or services to help them run their own operations. For example, a company might purchase office supplies from another business. The purchase of these supplies would be considered a B2B transaction.

Different from business-to-consumer (B2C) transactions, which involve sales to individuals, B2B transactions usually take place between companies. In order for such transactions to occur, both businesses must have an understanding of the products or services that they are offering to one another. Because B2B sales often require more time and effort than B2C sales, businesses must carefully consider whether or not entering into a B2B relationship is right for them.

There are several advantages and disadvantages of conducting business-to-business transactions. Some of the advantages include:

· Access to new markets: When two businesses agree to engage in B2B activity, they are effectively opening up new markets for each other. By agreeing to sell their products or services to one another, both companies gain access to new customers that they would not have had otherwise.

· Improved relationships with suppliers and customers: Conducting B2B transactions can help improve relationships between companies and their suppliers or customers.