Business-to-Business vs. Customer Site’s Supply Chain

Introduction

B2B site is the place where various partners and suppliers transact whereas B2C site is the point of interaction between buyers and customers. B2B is based on a relationship which exists between business partners and the companies that practice them while staying competitive. Thus, competition is a significant trait of the B2B e-commerce where integration between two supply chains is done with convenience, since supply chain develops among them the trust and confidence, which is more stronger than in B2C. B2C involves a direct exchange where goods are forwarded in lieu of money flowing in through consumers.

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Competition versus Marketing

Distribution in B2B is minimum and is more driven towards competition rather than marketing. On the other hand B2C entails extensive and careful distribution of end products because of more end consumers. Marketing, advertising, and branding play a major role in B2C sites where the only aim of the site is to attract customers for profit making. Moreover, B2C sites encompass more distribution channels in order to reach the product to the end-user whereas B2B sites involve lesser distribution channels.

Cost Reduction

With a tremendous increase in the B2B and B2C commerce sphere, what matters is to adopt the most convenient way to reduce the intermediary cost savings. This way whether B2B or B2C both requires a strong logistics and computer-focused approach. The B2B site is strongly favored by personnel designing the logistic supply chain because it eliminates the intermediary and encourages transparency.

It not only enables the international sale logistics team to concentrate on selling and efficient supply chains development but is also low cost and benefits the importer or exporter once he is able to maintain good relationship with other buyers (Branch, 2008, p. 36). ‘Google adsense’ is a good example of B2B website where businesses interact with each other for the same purpose i.e, to make profit. On the other hand B2C differs by the nature as well as usage of the customer and the way he uses the product. B2C e-commerce websites include food products, home appliances, online shopping sites and financial services.

Logistic Management

Logistic systems are more tended towards B2B than B2C for the reason that their delivery in B2B is convenient due to the fact that buyers and suppliers are available at the time of delivery. In the case of B2C, logistic providers experience delays and avoidance for often the consumers are not available at their homes at the time of delivery. This causes inconvenience to the logistic management and they prefer to work in the B2B sector.

Another reason for preferring B2B sites is the improved on-time delivery and customs clearance. B2C entails some complexities, for instance a beverage company is provided with over 35 worldwide brands with a clear objective of receiving and handling stocks and to arrange transport and overseas shipment. This service includes features like inventory management, updated online reporting status on the site, order picking, ensuring that deliveries are shipped direct to end consumers, quality control and security.

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Payment

B2C sites provides the consumer with a wider variety of payment options like electronic mode of payment, PayPal, credit card and bank wire which makes the transaction hassle free. B2B offers a limited scope of payment due to trust factor and good relations and usually allow credit card transactions for businesses or partners.

Structure

B2B sites offer much more to the companies in the supply chain context than what it used to offer in traditional supply chain relationships. These sites offer more easily accessible resources and let the manufacturers and distributors to acquire competitive advantage. The vertically structured B2B websites are beneficial for communicating critical information that not only promotes the end product but also extends and encourages the performance of member partner companies for the benefit of the end-consumer.

In this scenario retailers have the opportunity to equip the supply chain with the critical feedback. Horizontally structured B2B sites gives freedom to various industries to allow their companies to operate by providing auction platforms which can help dispel surplus inventory. B2C sites differ structure wise from B2B sites in a sense that they are easily accessible by the general public and usually focus on sale transactions and marketing functions.

No doubt that larger organizations have greater technological and economic resources than smaller organizations and even when at times they squander these advantages, this interferes with their ability to profit from B2B e-commerce (Tie, 2001). One reason for this is that despite the small but growing interactive B2C market, B2C requires different types of relationships and information approaches which take into account all the contacts and is typically shorter term with shorter sales cycles (Ragins & Greco, 2003).

On the other hand the B2C consumer seeks a mixture of convenience, price and product capabilities. Companies usually gather information about the customer in terms of demographics, his past and current purchase behavior and his preferences. This strategy works better than B2B market and includes the preference of previous purchase behavior to evaluate new needs of the end-user to target with new offers.

References

Branch E. Alan. (2008). Global Supply Chain Management and International Logistics.

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Ragins. Edna, Johnson & Greco J. Alan. (2003). Customer Relationship Management and E-Business: More Than a Software Solution. Review of Business, 24(1), 25.

Tie, Robert. (2001). Get Ready for the World of B2B. Journal of Accountancy, 191(6), 49.

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NerdyTom. 2021. "Business-to-Business vs. Customer Site’s Supply Chain." November 2, 2021. https://nerdytom.com/business-to-business-vs-customer-sites-supply-chain/.

References

NerdyTom. (2021) 'Business-to-Business vs. Customer Site’s Supply Chain'. 2 November.

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