What is B2B2C?
You’ve heard of B2B. You’ve heard of B2C. But, how much do you know about the B2B2C model? Many companies arrange themselves around either B2B or B2C models. While these models are still highly relevant in today’s business landscape, another option is becoming more popular in the age of digital tools and mounting consumer expectations: B2B2C.
The B2B2C business model combines the benefits of each approach, allowing a B2B company to leverage the B2C experience and reach a larger customer base. Though it takes its cues from more familiar models, B2B2C introduces new considerations to the business world.
Let’s explore what B2B2C businesses are, what benefits they enjoy, and what types of challenges they might face.
What is B2B2C?
B2B2C, or business-to-business-to-consumer, is an eCommerce model where businesses access customers through a third party but are unable to interact directly through their own brand.
Here’s a closer look at how that compares to other models:
In the B2B experience, one business markets products and services to another. Software companies and office technology suppliers often fall into this category.
A B2C eCommerce model allows a business to interface directly with the consumer. Most consumer brands use this model. The only difference between this and a traditional B2C approach is the form of transactions, which occur online via websites or apps instead of in a physical store.
In B2B2C businesses, three parties are involved: the primary brand, the middleman, and the customer. Consumers are fully aware they’re buying from the primary brand. The purpose of the intermediary company is to provide more direct service at customer touchpoints, creating a mutually beneficial situation for both businesses.
Examples of B2B2C Business Models
While B2B and B2C models may be easy to spot, B2B2C businesses are less common in the current marketing and commerce landscape. For this reason, it’s often valuable to see specific examples:
Instacart is a startup B2B2C model that digitally mimics the grocery shopping experience. While traditional grocery stores haven’t typically undergone the digital transformation necessary to offer this service, Instacart acts as a platform partner for such stores. The resulting B2B2C model allows Instacart to leverage the brand recognition, existing customer base, and inventory of grocery stores, while the grocery stores benefit from Instacart’s digitized customer experience.
Pladur, the leading drywall provider in Spain, differentiates itself from competitors via a B2B2C eCommerce platform. Employees, distributors, and customers all utilize the same solution, enabling simple purchase experiences, connected logistics and manufacturing management, and significantly reduced lead times in order fulfillment processes.
Tuff Shed, a manufacturer of storage sheds and garages, has stores across the U.S. However, through a B2B2C partnership with national retailers such as Home Depot, customers can access Tuff Shed’s online product builder through devices located in chain stores. In this way, a shopper remains a Home Depot customer, but Tuff Shed maintains branding and consumer data collection.
Supporting more than 115 countries, AZA Finance has a simple goal: “make it easier to do business in Africa.” This organization acts as the middleman between other companies and their consumers, offering financial technology solutions spanning multiple currencies to enable simpler international commerce.
Benefits of a B2B2C Business Model
As customer expectations grow more complex, businesses struggle to scale operations and manage orders. To address new challenges, many B2B companies choose to partner with others through a B2B2C model.
Access a 360-Degree View of Customers
A B2B company faces limitations in the collection and utilization of consumer data. Companies using the B2B2C business model have direct access to end customers, enabling the creation of personalized offers and solutions. The result is a more robust digital experience that benefits all three parties.
Reduce Operating Costs
Operating costs increase with growing customer expectations; in response, the B2B2C approach allows companies to eliminate logistics costs and decrease overhead. Similarly, while a large amount of capital is required to enter a new industry or deliver new solutions, B2B2C partnerships allow these costs to be distributed between multiple companies.
Increase Revenue Opportunities
B2B2C businesses also have the opportunity to expand their potential for economic growth. By partnering with others, a company can enter new markets, access broader customer bases, utilize existing resources, and ultimately share the financial burden required to explore new avenues.
Retain Control Over Their Branding and Pricing
Under the B2B commerce model, businesses often have little control over the positioning and sale of their products. This often results in a loss of brand identity, which means end customers aren’t aware of the original manufacturers or suppliers responsible for the quality they’ve come to expect. A B2B2C model eliminates this issue by involving a business more directly with the end customer. When a brand has more control over the price, presentation, and marketing of its products, that brand has a better chance of becoming a “household name” and winning new customers.
While relatively new and growing in demand, theB2B2C eCommerce has both its benefits and fair share of growing pains to overcome. Challenges are inherent in any business model; however, due to its relative originality, B2B2C hasn’t yet had the time or wide adoption necessary to spark the creative solutions afforded to other models.
Let’s take a closer look at what could prevent the B2B2C approach from skyrocketing to popularity:
- Increasing Demands
While B2B2C businesses have more resources to manage increasing customer demand, they still face the same challenges as other companies: How can brands create personalized, seamless experiences without compromising return on investment (ROI)? This question drives some businesses to the familiarity of other eCommerce models, where they won’t have to take a chance on a comparatively new approach.
- Complex Partnerships
A B2B2C partnership has more stakeholders than a traditional B2B or B2C model. Businesses must navigate relationships with intermediaries as well as end customers, balancing partners’ needs with consumer expectations to create an optimized selling environment.
- Customer Experience Management
As with any significant change, switching to a B2B2C model requires companies to rethink their relationship with consumers. Since B2B2C introduces a middleman into traditional transactions, it’s necessary for the primary brand to consider how this will impact the customer experience and whether a more hands-on management approach is required.
- Required Investment
Switching from a B2B or B2C business model requires an upfront investment. This includes the cost of a robust eCommerce platform that is able to interface with customers while integrating with third-party business solutions. It’s also necessary to invest in tools capable of distributing consumer data between parties, enabling all stakeholders to be key players in the commerce ecosystem.
- Infrastructure Modifications
The final, and perhaps most prohibitive, challenge associated with B2B2C businesses is the need to modify or entirely rethink the underlying infrastructure. When commerce has been conducted in a set way for years, it can be difficult, time-consuming, and — even — unsettling to make the switch to something new. As business goals change, so too must personnel roles, financial considerations, target audience, and more. In many ways, these modifications can feel like a complete redesign of the original company — and for some, that much change is simply frightening. Overcoming these logistic and cultural hurdles can keep organizations from making the jump.
Discover the Modern Ecommerce System That Fits Your Needs
To create a B2B2C model that maximizes benefits while dodging significant challenges, you’ll need to cross boundaries between consumer needs and partner requirements. Since these elements are often viewed separately, your business must merge the two perspectives to create something new and promising.
For this reason, it’s crucial for your approach to excel in four areas:
- Self-Service Account Management
- Order Management
- Buying Experience
- Product Content Experience
A truly seamless B2B2C experience requires all four capabilities to be united in a single system.
With Liferay, that single system is never out of reach.