What is B2B2C? Here’s what you need to know about the eCommerce model that’s quickly growing in popularity.
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 a B2C or B2B model. Although 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 taking cues from more familiar models, B2B2C introduces new considerations to the business world.
Let’s explore what a B2B2C strategy is, what benefits these businesses 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 and serve 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:
B2B
In the traditional B2B experience, one company markets products and services to another. From software companies to office technology suppliers to wholesale retailers, B2B eCommerce encompasses a wide range of transactions in the supply chain.
B2C
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 — though a B2C company can use both eCommerce and brick-and-mortar strategies.
B2B2C
In the B2B2C commerce model, there are three parties involved: the primary business or brand (e. g., a dealer or manufacturer), the intermediary (who acts as a middleman), and the final customer (the end consumer). 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 and the end consumer.
Examples of B2B2C Business Models
While B2B and B2C models may be easy to spot, it’s less common to see a B2B2C company in the current marketing and commerce landscape. Here are a few examples of companies using the B2B2C model:
Instacart
Instacart is a startup B2B2C platform that mimics the grocery shopping experience digitally. Because traditional grocery stores haven’t typically undergone the digital transformation necessary to offer this service, Instacart acts as a platform partner and go-between. 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
Pladur, the leading drywall provider in Spain, has a B2B2C eCommerce platform as a competitive differentiator. Employees, distributors, and customers all use the same solution, enabling simple purchase experiences, connected logistics, and manufacturing management, resulting in significantly reduced lead times in order fulfillment processes.
Tuff Shed
Tuff Shed, a manufacturer of storage sheds and garages, has stores across the U.S. Through a B2B2C partnership with national retailers such as Home Depot, the individual consumer can access Tuff Shed’s online product builder through devices located in chain stores. This approach expands Tuff Shed’s reach to people who shop at these national retailers while allowing Tuff Shed to maintain branding and customer data collection.
AZA Finance
Supporting more than 115 countries, AZA Finance has a simple goal: to “make it easier to do business in Africa.” This B2B2C partner 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 Relationship
As customer expectations grow more complex, companies struggle to scale operations and manage orders. To address new challenges, many B2B businesses 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 customer data. Companies using the B2B2C business model have direct access to the final consumer, enabling the creation of personalized offers and solutions. The result is a more robust digital experience that benefits all three parties.
2. 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, a B2B2C partnership distributes these costs between multiple companies.
3. 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 a broader customer base, utilize existing resources, and ultimately share the financial burden required to explore new avenues.
4. Retain Control Over Their Branding and Pricing
Under the B2B eCommerce 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 the end customer isn’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 B2B buyers. 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.
B2B2C Challenges
Like any other business model, B2B2C eCommerce has both benefits and challenges. Because of B2B2C’s newness to the market, however, the model hasn’t yet had the time or wide adoption necessary to spark the creative solutions other models have.
Let’s take a closer look at what could prevent the B2B2C eCommerce model from skyrocketing in 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, the primary brand needs 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 can 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
A robust self-service system empowers B2B partners, such as resellers or distributors, allowing them to independently manage their accounts, place orders, and access pertinent information. This autonomy fosters stronger B2B relationships and reduces the reliance on manual support, resulting in cost savings.
- Order Management
In a B2B2C scenario, where diverse customer expectations must be met, effective Order Management is crucial to accommodate various order types, quantities, and fulfillment specifications, catering to the unique needs of both B2B partners and end consumers.
- Buying Experience
Offering great Buying Experiences is pivotal for simplifying complex transactions, catering to diverse audiences, building strong relationships, enhancing customer loyalty, enabling personalization, ensuring efficient order processing, and differentiating the business in a competitive market. This contributes to overall customer satisfaction and long-term success in a complex business ecosystem.
- Product Content Experience
By informing diverse audiences, facilitating informed decision-making, enhancing user engagement, and enabling personalization – or in short: by offering a great Product Content Experience – you create a positive and cohesive experience throughout the complex B2B2C business ecosystem.
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. Check out Liferay’s Digital Commerce capabilites or contact one of our B2B2C experts to see how Liferay can transform your eCommerce strategy with a flexible, integration-friendly platform.
