Jul 24 2010

What is B2B?

Category: Business & Economy


B2B or “Business to Business” refers to a strategy in which one business sells directly to another business. It is most often seen when manufacturers sell to wholesalers or wholesalers sell to retailers. The advantage of B2B transactions is convenience and volume. The wholesaler is selling a large volume of products to one entity rather than having to ship smaller quantities to individual consumers. As the product moves down along the supply chain these costs are ultimately filtered down to the individual buyer. Larger companies like Walmart, who are retailers, will often leverage their buying power and buy massive quantities directly from the manufacturer, thus eliminating the wholesaler. This cutting of the supply chain, allows them to sell products to consumers at the lowest prices possible and still make a decent profit. Companies like Walmart have changed the traditional framework of the supply chain by cutting out the wholesaler or middle man. The largest B2B selling transactions actually occur during the manufacturing process.

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