B2B (Business to Business) Hi-tech Version
B2B (business to business) companies make their primary profits by selling products or services to other businesses. Such companies often have an important place in the supply chain, channeling resources to manufacturing companies or handling distribution needs for retailers. The communication abilities that have arisen with widespread Internet service and Web-based applications have encouraged the growth of many different kinds of B2B companies that trade and market online.
Since B2B markets concern only businesses, product sales and contracts con often be streamlined, including much larger amounts and longer terms of service than result from selling only to consumers. Certain kinds of markets can be designed specifically for this type of transaction. Online B2B businesses typically use several different Web applications to reach other companies and establish relationships with them, including:
- Company Web sites. Large B2B firms can set up their own Web sites to market services and promote their products. Interested companies can visit the Web site at any time to inspect the available good or service. The Web site can offer either a connection to a more private online structure available to contracted businesses, or can sell products directly from the site.
- Supply and procurement exchanges. These are online markets designed specifically so that company agents can view available goods and services, and in many cases make bids for B2B contracts. This can include auctions, in wich buyers vie to purchase from one seller, and reverse auctions, in which many sellers lower their prices until a buyer accepts a contract. Some procurement sites focus on particular industries and the businesses exchangeing services within them.
- Brokering sites. These sites are a type of B2B company themselves, acting as a go-between for companies searching for a particular good or service and other companies that are able to offer those good and services.
- Information sites, or Infomediary. These Web sites offer a collection of information concerning specific industries. This information can include required legal standards, available businesses that provie needed products and services, and advice concerning purchasing prices and markets. Many information sites function as elaborate search engines on particular topics.
COMMON B2B COMPANY STRUCTURES
There are many types of B2B structures and marketing methods. Many strategies focus on relationship marketing-building a strong, long-lasting connection with a certain number of businesses based on high quality service and trust. Others work with complementary partners that can refer each other to buyers, thereby expanding the customer base via the partnership. Online marketing methods include mass e-mails, selective and effective telemarketing, and search engine optimization (SEO) techniques that creat a significant Internet presence to buyers searching online for B2B supply and service solutions.
The type of products B2B businesses offer usually fall into three categories, based on the buyer’s needs and expectations:
Commodities. These types of products are readily available and can be immediately shipped to the businesses upon sales conclusion. These are usually simple goods that can be readily packaged and include few features. If the commodity is a service, then it is usually a standardized, simple process.
Customized goods. These products are changed in some way to meet the buyer’s specifications. These customizations are usally standard and often included in the markeitng information advertised by the seller. Changes in color or types of customization common in B2B goods. This can slow down delivery, but such a delay is usually considered acceptable by the buyer.
Designed goods. These products are built or engineered directly to buyer specfications, requiring a great deal of independent work to tailor them to company needs. Machine parts that need to work for a particular production system is one example. Designed services include advertising services applied to a specific good. Outsourcing service, especially software outsourcing is highly recomended nowaday, to cut down expense for company.
- Encyclopedia of Management, 6th edition, 2009 Gale, Cengage Learning