You’ve heard of B2B, B2C, and maybe even D2C. To add to the alphabet of business models, there’s also B2B2C, which is business-to-business-to-consumer. This model has also been referred to as B2X (business-to-x), B2E (business-to-everyone), or even B2M (business-to-many).
In recent years, more B2B models have decided to expand their approach to create a B2B2C model that reaches the final consumer. With nearly everything making its way online in one way or another, consumers are demanding much more from those who get their dollars.
This means businesses must take control over the customer’s shopping experience and create a lasting relationship with the end user. This is another way technology has changed how people shop for everything, from groceries and mattresses to clothing and electronics.
Consumers will buy just about anything online, as long as it’s a positive experience. As many as 60% of millennials are loyal to brands that offer a unique shopping experience, and since millennials are positioned to be the biggest spenders in the country, businesses are following their lead. This need to control more than just the product has B2Bs looking toward the B2B2C model.
The B2B2C model can work in several different industries and it doesn’t look exactly the same for each business. So, let’s dive into the corners of B2B2C and take a look at what it is, the benefits and the challenges of it, and how it can succeed.
What is B2B2C Ecommerce?
B2B2C ecommerce takes out the middleman usually between the B2B organization and the B2C, putting the businesses directly in contact with the consumer. The B2B2C model can best be described by looking at how a wholesaler or manufacturer interacts with traditional B2B and B2C models.
In those cases, the wholesaler or manufacturer sends goods to the B2B, and those goods are then sold to the final consumer. In a B2B2C model, the wholesaler or manufacturer reaches the final consumer by either partnering with the B2B or directly selling to the consumer. With B2B2C ecommerce, these transitions happen online, often through virtual storefronts, an ecommerce website, or even apps.
In many B2B2C ecommerce models, the consumer knows they are getting products from a business that’s separate from where they purchased it. For example, the consumer may purchase a product from an affiliate blogger but the product is branded and sent by the manufacturer.
For many long-standing B2B companies, taking things one step further and moving from a B2B model to B2B2C is becoming a popular choice. Let’s take a look at why.
Why are B2B Businesses Expanding to B2B2C?
For some businesses, the B2B2C ecommerce model simply makes sense given today’s retail climate. As consumers grow more comfortable with shopping online, they’ve come to expect a seamless buying experience, which includes having a relationship with the brand.
Because of this, many B2Bs are finding it difficult to stay relevant. In some cases, the relationship between B2Bs and B2Cs is siloed, and savvy consumers—especially millennials and Gen Z—are starting to notice.
Millennials have forced many brands to change the way they work and interact with consumers. With the power to spend $1.4 trillion (accounting for 30% of all retail sales in 2020), this unique group of consumers is not one to ignore.
Having grown up in the digital landscape of Google and Amazon, along with a myriad of social media platforms, millennials expect a lot from the places where they choose to shop. They want a store to offer self-service, with 24/7 access, so they can purchase at their convenience.
Even business buyers have become more critical of the wholesalers they work with. According to research, 70% of business buyers are looking for a user experience similar to Amazon when they purchase goods and 74% of business buyers want their shopping experience to be personalized.
B2B2C Ecommerce: Maximizing Business Opportunities
B2B2C ecommerce models have plenty of benefits for the B2B and the B2C to make the bridge. In a B2B2C model, it takes work on both sides of the hybrid agreement.
A B2B2C benefits the B2B — or the wholesaler or manufacturer — by reaching a large and loyal customer base, making bulk sales, retaining credibility by working with trusted brands, and having low customer acquisition costs.
A B2B2C benefits the B2C — the retailer or service provider — by making sales without backend logistics, attracting loyal customers to the store or website, having a wide-range of high-quality products to offer, and selling similar products and services.
Let’s take a deeper look into the benefits of B2B2C ecommerce:
1. Strategic customer growth.
When a business is a B2B2C, one of the major benefits is getting access to customers who are ready to buy. Consider this: if a B2B decided to switch to a B2C model, they’d have to create a consumer-facing brand from the ground up, including building a robust marketing strategy.
When a B2B decides to partner and move to the B2B2C model, the consumer-facing elements are already in place and successful. A B2B2C hybrid also looks to make business sense, in terms of the consumer. For example, a discount store isn’t going to partner with a high-end candle wholesaler. The partnership is targeted, so the B2C already knows the consumer will be excited and ready to purchase items from the manufacturer.
2. Removes disconnect.
In the traditional B2B model, a manufacturer sells their inventory to a retailer and the transaction for the B2B is over. The retailer, or the B2C, can then take those items and sell them at a price-point they choose and can market them in any way they like.
In a B2B2C model, the manufacturer gets to create and maintain the relationship with their customers. The sales process is also simplified. The business has control over all of the branding, and they get to keep consumer data. This improves the customer experience and can help make for a frictionless buying process.
3. Maintain control over supply chain.
Remember, in a B2B2C ecommerce model, there’s no middleman. This means a supplier can bypass the supply chain, purchase items for less and sell products for a lower price point. Lower prices make everyone happy.
Skipping the supply chain also means manufacturers can offer products faster. Today’s buyer wants to be able to purchase and return items as fast as possible. Many times, traditional B2B and B2C models couldn’t keep up with buyer demand. A B2B2C is more efficient, especially for the fashion industry which must keep up with seasonal fabrics and styles.
Challenges of B2B2C Ecommerce
Of course, the B2B2C ecommerce model has its challenges along with the benefits. One of the disadvantages of the B2B2C model is creating an effective marketing strategy. Generally speaking, a B2B2C is dealing with different groups of buyers — the retailer or the affiliate and the consumer — so creating a cohesive plan can be a unique challenge.
There’s also the issue of integrating the technical side of the business. In a B2B model, the manufacturer used a website created for selling to other businesses. While B2Bs often work years to create innovative online options for their clients, creating a consumer-facing site has different needs. With a B2B2C, there’s a more complex online buying experience that must work seamlessly with an inventory warehouse.
Does B2B2C Make Sense for All B2B Ecommerce Businesses?
In short, B2B2C doesn’t make sense for every B2B ecommerce business. In order for this model to be successful, everyone involved should benefit.
If a B2B is considering the B2B2C model, their clients would have to be willing and ready to provide access to consumers who would be interested in purchasing the products. The B2B would also need to have direct access to consumer data so they can personalize products to match customers’ needs.
If a B2C is considering the B2B2C model, their B2B partner should be willing to sell additional products or services outside of its core business. The B2B partner should see the advantages of working with you, instead of entering the market on their own.
The B2B2C model is a hybrid solution; a true partnership. Although it’s not for every business, it does work for many, especially as consumers’ buying habits continue to evolve. Even if the B2B2C model isn’t right for a business today, it might be the right solution in the future.
Building the Ultimate B2B2C Strategy
If the benefits of a B2B2C ecommerce model are enticing, next comes creating a strategy that’s built for success. There are several parts to a strategy, but having an ecommerce solution — such as a B2B2C ecommerce platform — that works for the customers and for the business is key. Here’s what any B2B2C should prioritize in their strategy:
1. Prioritize customer experience.
The customer experience is one of the major differences between the B2B and B2B2C models, which is why it’s at the top of the list. B2B2Cs should create a customer experience that drives loyalty.
The consumer-facing website needs to have the bases covered when it comes to page load speed, page structure and overall design. It should also feature relevant content and a seamless buying experience, from selecting items to completing checkout. Finally, the security of the site is paramount since it will house sensitive customer data and payment information.
2. Make your store web responsive.
Mobile ecommerce in the U.S. in 2020 will bring in $314 billion, which is 44% of total ecommerce sales. Making your online store responsive to mobile will cater to those smartphone shoppers. Having an omnichannel approach to B2B2C sales will also work in your favor.
Millennial and Gen Z consumers prefer using their phones to shop because of the convenience. Once you’ve gone through the efforts of creating a responsive mobile site, you can also attract buyers with exclusive discounts or rewards by using branded shopping apps.
3. Cross-selling and upselling.
An online store can — and should — offer similar products to customers in real-time, just as an in-store sales associate or a member of a sales team would do. Certainly we’ve all found great products by looking at those suggested under “Customers who viewed this product also viewed…”
This kind of product suggestion really comes in handy if an item requires multiple pieces, such as a desk and the matching chair or electronics with proper charging equipment. This is another small way to build loyalty, as the customer will appreciate the helpful and frictionless buying process.
4. Flexible and fully integrated platform.
Having a fully integrated platform means catering to B2B customers as well as the end consumer. When B2B clients visit your site, they will likely be looking for catalogs, ready-to-ship kits and multiple payment options. On the other hand, consumers are more interested in the overall look and ease of your site as they complete transactions.
Tactics for Being Successful with B2B2C
Once you’ve got the components of a winning strategy figured out, it’s time to get into the tactics that will create a successful B2B2C.
1. Create B2B specific promotions.
It’s easy to forget that even in the B2B space, buyers are humans. B2B customers want a great shopping experience and, just like end consumers, they’re less-likely to walk away from a targeted promotion. Expand your B2B reach by offering trade-ins and price reductions.
You can also tap into other sales channels and create social media promotions for your B2B clients. A study from Hinge Marketing revealed that more than 60% of buyers research service providers online before making a purchase.
2. Advertise customer service.
Good customer service can help your business stand out, but it’s usually only considered in the B2C model. Having customer service — and making it known — will also help customer retention.
Use your customer service to help your clients save money. You can also use this department to reach out to clients for feedback. Answering questions and assisting current or potential clients on social media is also a great way to help them, while also letting others know that you have a team available for assistance.
3. Create a referral program to benefit your dealer network.
If customers consistently have a positive experience with your product, a referral program can expand your reach to new clients. Consider the type of reward that would resonate best with your current clients — this could be a discount, a free training, a gift card, etc.
Next, figure out when and how the client will be rewarded. Of course, you’ll want to automate this process so it doesn’t require additional business processes on the backend. Finally, promote the referral program so clients can start spreading the word.
Examples of B2B2C Ecommerce
There are B2B2C ecommerce models in many different industries, from insurance and construction to fashion and food. Let’s take a look at some of the companies that have morphed into B2B2Cs to meet consumer demand and reach business goals.
1. Lammes Candies.
The family-owned candy company in Austin, Texas opened in 1885, long before ecommerce was an option. Lammes Candies made a name for itself with its pecan pralines, mailing them around the world in the 1920s. But over the years, Lammes Candies has shifted its model to keep up with consumer demand and business needs, all while utilizing available technology.
With the birth of the internet, Lammes Candies took a step toward ecommerce by creating a visual online catalog, but making sales over the phone. Today, the company has a robust online ordering system and they make 50% of their revenue from wholesale customers, and the other 50% from consumers. The B2B2C model works for Lammes Candies because of the relationships they maintain with other businesses, but also because of their direct sales with the end consumer via their website and retail shops.
UPLIFT Desk, a manufacturer and retailer of standing desks, ergonomic chairs and other office accessories won over customers by creating an online experience that lets them customize and truly see their desk before purchasing it. Customers enjoy this type of option, especially when the item is a higher-priced investment piece.
UPLIFT Desk sells directly to consumers online, but is working to expand their B2B efforts. Through their website, they’ve provided desks for large employers including Google, NBC and M.I.T, among many others. Their unique online buying experience makes UPLIFT Desk attractive to end-consumers, but also to B2B customers.
Before all of the changes of 2020 came along, more consumers were making the shift to shopping online. The effects of the pandemic was the push many businesses and consumers needed to get online, and it looks like they’re going to stay for a while.
Consumers are now looking for personalized shopping experiences that are convenient and financially savvy. This demand has not gone unnoticed from B2Bs around the globe. Making the transition to a B2B2C model allows businesses to have more control over the customer experience and, if done right, it can also result in more revenue and more opportunities.