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Business-to-business

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Business-to-business, commonly known as B2B, is a term that describes the exchange of products, services, or information between businesses, as opposed to between businesses and consumers (B2C). It typically involves large-scale transactions as it forms a crucial part of the supply chain[1] for most industries. B2B transactions often require significant upfront investments, professional staff, and legal counsel. They also have their own unique negotiating power dynamics and are usually based on raw data. B2B can extend to include e-commerce for consumers, known as B2B2C. B2B operations face various challenges, so it’s essential for organizations to develop effective strategies and relationships. The emergence of e-procurement, where businesses make purchases via online platforms, has significantly transformed B2B operations.

Terms definitions
1. supply chain. The main entity in this text is the Supply Chain. It is an essential process in business that entails the movement and conversion of raw materials into final products that reach consumers. This process involves multiple stages, including sourcing materials from suppliers, manufacturing products, distributing them through various channels, and selling them to customers. Managing this process efficiently, known as Supply Chain Management, is critical for businesses to save costs, improve customer satisfaction, and respond swiftly to market changes. It is also becoming increasingly important to consider social responsibility and security regulations in supply chain management. The supply chain process is subject to different types and models, and its performance and resilience are key factors for success. Technology adoption, sustainability, e-commerce, and data analytics are emerging trends in supply chains, while global uncertainties, balance between efficiency and responsiveness, transparency, cybersecurity, and skills gap pose significant challenges.

Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a commercial transaction with another. This typically occurs when:

  • A business sources materials for its production process for output (e.g., a food manufacturer purchasing salt), i.e. providing raw material to the other company that will produce output.
  • A business needs the services of another for operational reasons (e.g., a food manufacturer employing an accountancy firm to audit their finances).
  • A business re-sells goods and services produced by others (e.g., a retailer buying the end product from the food manufacturer).
The "electronic components district" of Guangzhou, where numerous shops sell electronic components to other companies that would use them to manufacture consumer goods

Business-to-Business companies represent a significant part of the United States economy. This is especially true in firms with 500 employees and above, of which there were 19,464 in 2015, where it is estimated that as many as 72% are businesses that primarily serve other businesses. One possible argument of economics to explain the levels of Business-to-Business activity is that it allows for business segmentation.

B2B is often contrasted with business-to-consumer (B2C) trade.

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