What is B2B2C eCommerce Business? How does it work?
Business-to-business-to-consumer clients are reached through eCommerce through the utilization of other businesses. In other words, it incorporates elements of both business-to-business and business-to-consumer models. The original company sells goods or services to a third-party company that acts as a middleman to distribute the goods or services to customers.
While the B2B2C eCommerce Business model encompasses a variety of techniques, having a general understanding of what it is intended to accomplish will help you determine if it is the right fit for your firm.
Business-to-business-to-consumer E-commerce models occur in several shapes and sizes, including simultaneously selling products or services to businesses and consumers. A company seeks out another company to buy something from and then sells it to consumers as a third party.
Also, read What is B2C eCommerce? How Does It Work in 2022
Even though B2B2C eCommerce Business looks to be a complex business strategy, everyday consumers interact daily. B2B2C at work occurs when a customer uses one company to order a product or service from another.
Using a mobile app to order from a business is a form of B2B2C. Take Uber Eats, for example. Uber Eats sells its delivery service to a restaurant, and as a result, it may sell it to customers.
Many consumer-facing mobile delivery apps fall into the B2B2C category.
Amazon is a good example of an e-retailer who follows this strategy. They stock goods and act as a sales channel for product manufacturers and service providers. Amazon’s e-commerce hosting, warehouse storage, and shipping services are available to anybody who wants to sell a product or service.
By selling these services to another company, Amazon may bring in customers who use Amazon to buy the things or services they host on their platform.
Why Are B2B Expanding Into B2B2C eCommerce Businesses?
Few B2B CEOs can rapidly scale their firms without compromising service quality or overall sales performance. Rather than attempting to ‘be everything’ on their own, many B2B organizations want to cooperate and change into a B2B2C model to maximize commercial prospects and achieve scalable growth.
Most importantly, the collaboration must be advantageous to the end-users. Here are a few examples of how the B2B2C model benefits all parties concerned:
Company 1:
Creates brand trust rapidly and reduces acquisition costs by leveraging an existing client base.
Company 2:
Offers a new or complimentary service while gaining additional consumer data without investing internal resources.
Consumer:
Benefits from a convenient service offered by a reliable source.
Pros and Cons of B2B2C
Pros:
- Businesses can have access to one another’s clientele.
- They will remember your brand even if they do not contact you directly.
- The effect of middlemen is reduced.
Cons:
- It would be best if you simultaneously marketed to businesses and consumers.
- You must show that customers value you to another company.
- Businesses may be wary of giving you access to their customers.
Advantages Explained
The following are some methods that businesses can tap into one other’s customer base:
Pre-existing ties can significantly aid the B2B2C e-commerce structure. These ties can exploit to gain access to many potential customers. This value alone can make B2B2C a sustainable e-commerce firm, given the high cost of obtaining new consumers.
Customers will recognize your brand even if they don’t contact you Directly
While you can’t avoid consumer marketing entirely, you can benefit from reaching out to those who aren’t actively shopping for your product.
Middlemen’s impact is reduced
B2B2C streamlines the supply chain and removes multiple profit-making opportunities for middlemen.
The Negative Consequences are detailed
You will need to promote to both businesses and consumers at the same time:
Because your business plan relies on both, you’ll need to ramp up your marketing efforts. You must simultaneously reach out to both customers and enterprises to persuade them of the value you bring.
You must show that customers value you to another company:
It would be best if you not only persuaded another firm that you have a product or service that they should buy but also that consumers will pay for your product or service. Your product’s retail value to customers is the value to your biggest customer, which is another company. If they don’t think they can suggest and sell it, they won’t buy it.
Businesses might be wary of letting you benefit from their customers:
Your business and the B2C business you sell to make money from your products. If the B2C believes that adopting your B2B2C product or service will significantly diminish their earnings, this could generate friction. For example, some firms have complained that the costs and fees of employing delivery apps are hurting their profits.
Examples of B2B2C eCommerce Business
Let’s look at some common examples to see how businesses have successfully implemented a B2B2C strategy.
1. Instacart and grocery stores.
Instacart is an excellent illustration of how B2B2C can help newer digital start-ups and existing grocery stores produce a customer-friendly service. It is how it works.
Due to their hectic schedules, consumers do not have time to go grocery shopping. Nowadays, many people prefer to have someone else buy for them and then deliver their purchases.
Because it would necessitate a large investment in technology and manpower, grocery stores rarely provide this service. Instacart is now available. They offer an eCommerce site where users may get groceries directly from the Instacart website to imitate the entire supermarket shopping experience.
In this scenario, Instacart is Company 1 and can benefit from cooperating with existing grocery businesses because they already have a customer base. Company 2 is a grocery store, and they may give a service to their customers without investing any of their own money.
The ultimate buyer, most importantly, is aware that they are purchasing things from a grocery store rather than through Instacart. However, they eventually came to associate Instacart with grocery shopping.
2. eCommerce retailers and Affirm
Affirms the relationship with internet shops is another example of B2B2C. As an example, consider the partnership between Affirm and BigCommerce merchant UPLIFT Desk.
UPLIFT Desk sells various standing desks on its website, allowing customers to create their custom workspaces. However, some consumers may not be able to pay for the desk in full right away.
Rather than providing financing, UPLIFT Desk has partnered with Affirm to offer monthly payments to customers. Customers are aware that they are interacting with Affirm rather than UPLIFT Desk for the payment solution, which is crucial for the B2B2C eCommerce business.
Challenges in B2B2C eCommerce Business
While B2B2C eCommerce Business has a lot of benefits for organizations, it’s not easy to get started.
When it comes to B2B2C connections, both parties must contribute, especially when it comes to:
Data sharing
Successful B2B2C eCommerce Business collaborations require all stakeholders to integrate in real-time. Data must be synced for customer information, stock, inventory, pricing, promotions, marketing, and loyalty data links. Customers will have a fragmented experience if you don’t (CX).
Customer ownership
B2B2C cooperation thrives when both parties provide an equal number of customers and share customer ownership. Alternatively, one party maintains all client records and equitably rewards the ‘contributor’ for increased sales.
Brand differentiation:
Unlike “white label” agreements, B2B2C eCommerce Business recognizes the uniqueness of each organization. For example, UberEats utilizes its name to distribute food to its partners. Starbucks customers (and their data) are also counted as theirs.
Promotion
To promote a product, all parties must contribute equally. Why bother bringing a partner on board if they don’t pay attention to your items?
Is B2B2C eCommerce Business a Good Fit for Every B2B Ecommerce Business?
The lines between diverse business models are becoming increasingly blurred. According to McKinsey experts, eCommerce penetration in the United States rose ten years in three months, jumping from a little over 15% at the end of 2019 to 35% at the end of 2020.
Anyone who asks on the internet can now buy from a brand manufacturer.
However, this does not imply that the B2B2C eCommerce Business model will (or should) be used by every form of business. It is the reason.
1. The B2B2C paradigm necessitates a certain level of digital maturity
At the very least, a clear commitment to implementing digital changes and expanding your online store’s integrations. At this time, not every retail location has made the switch.
2. The product can constitute a limitation on its own.
Medical and industrial equipment, for example, is too complicated, regulated, or specialized to be marketed directly to end-users.
3. You are unwilling to bargain
B2B2C agreements may be tough to sign if your company refuses to grant them appropriate credit, reveal consumer information, or pay them fairly.
Conclusion
By utilizing a variety of sales channels and partners for varied goals, the B2B2C strategy can assist you in growing your client acquisition efforts.
Even yet, building a successful B2B2C company is challenging, particularly when negotiating win-win partnership arrangements, assuring data exchanges and a uniform customer experience across channels, and determining customer ownership.
While this strategy isn’t appropriate for every product or organization, it does have benefits when correctly implemented.
