Business To Business: B2B
Business to business: B2B is a much more complicated case where one company makes a large commercial transaction with another which they may not have done before. This usually happens when: A new product or service is developed or introduced, a company needs to upgrade their current product or service in order to compete in the market and so on. The two companies can also work out a multi-deal business-to-business deal which has a number of benefits for both sides, including increased sales volume, improved client base, increased profit and lower costs. If you are involved in a business to business: B2B transaction, it is advisable that you get an expert’s opinion on how this type of arrangement works and what potential pitfalls there are to avoid.
Business to business: B2B arrangements generally involve a third party taking on the role of a middleman. They will act as a facilitator between the two parties so that a smooth and efficient transaction takes place. A business to business: B2B transaction will involve many parties, which all have a direct interest in the transaction. These are the business owners, the customer and any suppliers of the business’s products and services.
Some people believe that the middleman is not directly involved in the process but is more like a gate keeper, helping to protect the interests of the business owner. However, there is no legal requirement for the business to disclose this to the third party, and it could well be the case that a middleman has to act as a shield to protect the business from unwanted and undesirable outside influences.
It is important to keep in mind that if you are involved in a business to business: B2B deal and you fail to deliver the goods, you could have to face serious consequences for your failure. For example, if you do not meet your financial commitments, the company can sue you and make a series of claims in court. Similarly, failing to make payments on time may lead to you losing your contract or even a lawsuit. The most common consequence of failure to pay up is a chargeback where the client will be charged the difference between the original amount of payment received from the business and the amount owed.
In many business to business: B2B2B deals, the company will not be liable for any claims made against you by your customers or suppliers. If you are unable to meet payments on time, the company may decide to charge a fee on your behalf to a third party. The third party will take care of any liabilities incurred by the business.
Therefore, in order to maximize your profits, do as much research as possible about the company you wish to do business with. Also ensure that the contract you sign is written in such a way as to protect both you and the company you are doing business with.