Business to Business (B2B)

Business-to-business, often referred to as B2B, is a term used to describe electronic business transactions between companies, as opposed to those between companies and other groups, such as those between a company and individual consumers/clients (B2C, Business to Customer or Business to Consumer) or those between a company and the government (B2G, Business to Government).

This is a term that refers to generic processes between business partners, and can also refer to all transactions carried out in an industrial value chain, before the finished product is sold to the end consumer.

More specifically, Business-to-Business or B2B indicates the relationships that a company holds with its suppliers for procurement activities, production planning and monitoring, or aid in product development activities, or the relationships that the company holds with professional clients, i.e. other companies, located at different points in the production chain.

As an example, the business relationship between a manufacturer and a wholesaler is a B2B relationship. The direct relationship between a manufacturer or wholesaler, on the one hand, and a customer/consumer/private end user, on the other hand, is defined as B2C. Another example of a B2B transaction is a chicken feed company selling its product to a chicken farm, which is another company. Another example of a B2C transaction is a grocery store selling grain-fed chickens to a consumer. B2B can also describe marketing activities between companies, not just the final transactions that result from marketing, although the term can in fact be used to identify business transactions between companies (which we also refer to as “institutional sales”). For example, a firm that sells copiers is more likely to be identified as a B2B business organization than a B2C business organization.

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