Business-to-business (B2B)

The term business-to-business, B2B for short, refers to all commerce transactions between businesses. Examples of B2B transactions include canned goods manufacturers buying wholesale produce farmers or middle men. Another example would be a company that pays an advertising firm to handle the advertising campaign of their different product lines.

Commerce transactions that do not fall under B2B may fall under business-to-consumer (B2C), business-to-government (B2G), and business-to-employee.

Businesses engage in multiple B2B transactions on a daily basis in order to provide their products and services to their customers. For the example given above, after buying fresh produce the canned goods company need to contract the service of trucking companies (assuming they don’t have their own fleet) to bring the produce to their warehouse, they also deal with wholesale and retail vendors of their products as well as advertising firms that help them promote their canned goods. A lot of other B2B transactions overlooked by the example would also ensure that there’s always a continuous supply of raw materials and processed goods.

Due to the need for suppliers and service support, many businesses have other businesses as their main customers. Examples of such businesses are farmers that are under exclusive contract to a specific company, advertising firms, and business process outsourcing firms (BPOs).