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B2B Versus B2C

In today's fast-paced world, the way of doing business has evolved to accommodate the global market. Traditionally the way of doing business was strictly through brick and mortar. However the Internet has changed the way businesses are reaching their customers. The use of technology has given businesses the ability to tap into additional markets. Two segmented markets that will be discussed in this paper are Business-to-Business (B2B), and Business-to-Customer (B2C), and their supply chains. In addition, this paper will define the terms, and explain how the supply chains differ from B2B and B2C.

According to learnthat.com a supply chain is essentially a distribution channel from which a product comes from sourcing or production to the consumer, its destination (learnthat.com). A real world example of this may be a customer in BestBuy that wants to purchase the latest Xbox 360 game console. The chain of events begins when the manufacture received the raw goods possibly some finished components from other manufactures to produce the product. Next, the product is shipped to BestBuy's distribution center. Then Best Buy's distribution center ships to an individual BestBuy location (brick and mortar). Finally, the customer purchases the Xbox 360, and possibly a few accessories. This is a supply chain and how a product is produced, and consumed by the consumer producing a partnership.

B2B, when people hear the ambiguous word they may think of the B2 bomber. In fact once people are aware of what it is, they may recall the days of a dairy sales man, which delivered fresh milk every morning. Now that those days are long and gone, business has emerged through B2B ecommerce. This is done when companies are buying and selling to one another online. In its infancy, B2B was just basic purchasing. B2B now encompasses the sales of supplies, and the supply chains in which it gets to the consumer.

B2C is business to consumer; it is traditionally a brick and mortar operation. A consumer goes to a physical location to make a purchase. In its infancy, B2C was thought as different websites offering products for a cheaper price, due to fewer overheads. A good example of this is eBay, or overtock.com to name a few. Today B2C offers a whole arrangement of buying, selling, and services. These services ranging from online banking, travel services, auctions, information, real estate, and recipes.

Supply chains between B2B and B2C may seem quite similar. Contrary to common belief there are differences. One of the main differences is the amount of channels or middleman a product must go through before reaching its destination. With B2B, there are fewer channels because a business is buying directly from the manufacture. With B2B, products are usually shipped in bulk, and then broken down into smaller items from B2C sales. Examples of this would be Best buy is looking for Xbox 360s to buy, so they deal directly with Microsoft to get their product. Therefore, this is an example of supply chain for B2B. Now lets look at B2C if an individual wanted to buy an Xbox 360. The consumer must first go to BestBuy, where BestBuy is the middleman in order to buy Microsoft's products. This supply chain would utilize Microsoft selling product to BestBuy and BestBuy selling to the consumer. Additional requirements are also warranted when a business is dealing B2B such as an integration of technology to do business across the world. B2B is oftentimes integrated through a common medium such as software, to help manage re-supply of product, and create smooth billing transactions. This integrates software solution for B2B does not have to be in place for B2C simply because the customer may only buy one Xbox 360.

In conclusion, technology has changed the way a company does business in order to compete with the global economy. Not only does a global economy play a role in business but also the dynamics of business has evolved into segmented groups. Both B2b and B2C supply chains are moving faster to meet the demand for the global economy.

References
http://www.learnthat.com/define/view.asp?id=339 retrieved March 7, 2006

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