The distinction between selling to other businesses (B2B) and selling to consumers (B2C) isn’t so clear anymore. As ecommerce grows and develops a new business-to-business-to-consumer (B2B2C) approach is growing in popularity. What could it mean for your business?
What is B2B2C ecommerce?
B2B companies are now building new relationships that will help them reach their target end users and consumers in a B2B2C model. It’s not like working with a wholesaler who sells to a retailer who then sells to the customer or with companies that sell products in a ‘white label’ arrangement.
B2B2C arrangements can include:
- Two businesses that sell to the same end customers; one can’t easily access them while the second already has a relationship with them.
- A business that wants to offer a wider range of products to its customers but doesn’t want to develop them, so is happy to sell another business’s products.
- A business that is happy to offer a product or service to its customers as part of a broader package.
- A business that will allow another business to access its customers to help them increase brand awareness.
How does B2B2C work in practice?
For B2B2C to be effective, the companies working together must provide value to their customers that they wouldn’t achieve on their own. It’s different from selling directly to consumers (D2C) or a channel partnership where products or services are marketed and sold, often with co-branding.
For example, Uber Eats sells its delivery service to restaurants and to consumers as well. Many of the mobile apps used by consumers for deliveries can be regarded as B2B2C.
An ecommerce platform selling groceries could meet the needs of customers who prefer to shop online rather than visiting a store without having to store products in a warehouse. Instead, they will work in partnership with the grocery stores who won’t need to create their own online shopping channel. Customers know that their shopping is coming from their favorite grocery store and not the ecommerce platform. Businesses providing this type of service, like Instacart, have thrived during the pandemic.
Providers like Affirm arrange installment loans for consumers to use at the point of sale to finance their purchases. So, for example, a company selling high value household appliances might pass on customers who want to arrange a finance package. The customer knows that the product and the finance come from different providers and is happy with the arrangement because it allows them to make their purchase.
Generally, the rise of ecommerce provides entrepreneurs with opportunities to create B2B2C businesses in partnership with online sellers. In return, businesses can gain access to infrastructure and customer information quickly and cost effectively.
B2B2C pros and cons
As a manufacturer or service provider you could choose to sell directly to your end users, but it might require a shift from a B2B model to a more customer-centric approach where different sales, customer service and data management skills are needed. In some sectors, like pharmaceuticals, there might also be restrictions on selling directly to consumers. You would also need an updated digital infrastructure to support direct sales.
In contrast, the B2B2C model can help to grow your customer base by providing access to different sales channels and partners. However, it requires careful thought and planning to be sure that the partners will gain mutual benefits and that data security and brand experience are properly managed. It will also be important to understand in advance the relationship each partner will have with the customers.
B2B2C can be especially beneficial to small businesses and start-ups, providing a rapid route to growth. For many existing B2B companies, it’s an opportunity to expand without affecting existing B2B relationships and to gain new insights about end users.
The B2B2C marketing model involves both B2B and B2C audiences, so data sharing between the partners is an important consideration for sales, customer service, and reputation.
Demand generation for both your business partners and consumers will be needed. Some companies focus on increasing brand recognition to drive consumer demand. Others focus on their business intermediaries, using Account Managers for example, to encourage them to promote their product or service. Whatever the balance, messaging is needed to appeal to both audiences.
In an ecommerce collaboration you will be jointly responsible for making sure everything on the website performs well, from load times and effective navigation and page structure to the overall design and branding. Most importantly, you will also need to meet the growing expectation that buying experiences will be personalized.
While one of the big advantages of the B2B2C model is the opportunity to reach new audiences, when customers are in different parts of the world you will need to manage deliveries, documentation, and customer queries in multiple languages and manage multi-currency pricing and local taxes.
Book a free Cloudfy demonstration to find out how you can enable your business to move to a B2B2C model with a powerful ecommerce platform.