Business to business: B2B refers to the business to business segment. In this segment, companies who engage in trade with others require a channel of communication to do so. The channel that is used may be a phone call, an email, or a personal meeting. These communication channels are commonly used for marketing and sales purposes.
Business to business: B2B is generally used in international trade. In this case, the channels used are the internet and telecommunication. The main difference between a B2B and a traditional trade or business is that in the B2B case, there is no personal contact between the companies. Hence, the personal relationship between the parties does not exist. This makes the business process easier.
There are various other uses of the term ‘business to business’. It can apply to the business-to-commerce arena. Business to business is also widely known as business to the enterprise, business to affiliate, or business to customer. In this case, there is no personal interaction between the companies, and the products and services that are exchanged are directly related to the businesses, their products and/or services.
Let’s look at how a business to business transaction works. When a company engages in business to business exchange, it saves money on its overhead expenses. This means that there is no need for business managers to allocate resources for purchasing of business inventory and supplies. By channeling trade via the internet and phone, these companies save money as well. They can spend the money saved on researching new products, expanding their businesses, training their employees, and other aspects related to business.
There are many mediums through which communication can be channeled between companies. The most common forms are the email, telephone, fax, and the web. Emailing documents that contain product and service information is one such method of business to business exchange. In other cases, the internet is used to provide for smoother business process operation. The fax and telephone are also used to communicate between businesses and their customers.
Companies engaged in business to business transfers are able to reduce cost, time, and resources. However, the process is not very effective unless the parties involved in the business to business transaction are willing to share resources. This may mean sharing costs, labour, technology, advertising, and other resources. Many companies are hesitant to share such resources because they believe that they would lose control over their own information. However, companies that do not share control of their business data are more prone to fraud.