Customers frequently use business-to-business-to-consumer (B2B2C) eCommerce without even realizing it. B2B2C helps businesses reach their customers indirectly through other companies, boosting their strength, market presence, and customer case. B2B2C is mostly used by Manufacturers, distributors, and consumers.
Manufacturers can reach more consumers at a lower cost by using B2B2C. Distributors can offer a greater range of products without incurring significant development costs thanks to it. Having access to several brands on one platform is advantageous to customers.
After the COVID-19 pandemic, the need for online shopping has accelerated and altered consumer behavior. Global B2B eCommerce sales in 2022 were an estimated $20.4 trillion, a boost of 12% from the year before, according to a Statista report, underscoring the growing significance of the B2B2C model.
Buy online, pay in-store, and convenient delivery services are innovations that have surfaced. B2B2C eCommerce has increased due to this change, which has made it harder to distinguish between B2B and B2C models.
This blog will focus on the b2b2c model along with its benefits, challenges, and success stories.
What is B2B2C eCommerce?
The B2B2C model connects suppliers and manufacturers directly with consumers, making it clear who made the product. Unlike white labeling, it guarantees transparency.
This model helps businesses to deliver products efficiently. For example, a restaurant delivery platform connects customers with restaurants that do not provide delivery on their own. This allows both businesses to focus on their strengths while saving money.
B2B2C is gaining popularity. According to a May 2021 survey, 42.3% of industry leaders sell directly to consumers via online marketplaces, and nearly 40% of manufacturers intend to use this model to improve customer experience.
Overall, B2B2C combines elements of the B2B and B2C models to help businesses gain visibility and reach, particularly small and emerging brands.
Channel Partnerships vs. Direct-to-Consumer
A channel partnership involves a company collaborating with a producer or manufacturer to market and sell their products or services. In contrast to B2B2C, channel partnerships frequently involve the partner rebranding the products or services as their own, a process known as white-labeling. Grocery stores and the healthcare industries are frequent users of channel partners. They use this channel to provide good discounts to their customers.
Direct-to-consumer (DTC) is a simple yet effective business model in which a brand sells its products directly to customers, bypassing intermediaries. This approach promotes a more personalized customer experience that frequently leads to more competitive pricing.
When considering a B2B2C eCommerce business, it is critical to understand the differences between B2B2C and other eCommerce models.
Let’s explore the following five differences between channel partnership and direct-to-consumer:
Sales Strategy
Channel Collaborations
Retailers, distributors, and resellers are examples of middlemen who sell goods and services. These partners are essential to the brand’s consumer outreach.
Direct to customer
To keep control over the sales process, brands sell directly to customers without the use of middlemen, usually through their own websites or physical stores.
Customer Relationship
Channel Partnerships
Since the partner frequently mediates the relationship with consumers, brands may not have much direct contact with their final consumers.
Direct to customer
By interacting directly with customers, brands build stronger bonds that enable more individualized marketing and a deeper comprehension of their needs.
Brand Control
Channel Partnerships
Since the partner chooses how to present the brand to customers, brands have less control over how their goods are marketed and presented.
Direct-to-Consumer
Brands are able to create a consistent and customized shopping experience because they have complete control over branding, messaging, and the customer experience.
Revenue Sharing
Channel Partnerships
Profit margins may be impacted by the frequent sharing of revenue with the intermediary. Brands might have to give partners commissions or discounts.
Direct-to-Consumer
Since brands sell directly to consumers, they keep the majority of the revenue, which could result in higher profit margins.
Market Expansion and Scalability
Channel Partnerships
Because partners may already have established customer bases, using existing channels can offer faster scalability and access to a larger market.
Direct-to-Consumer
Even though DTC can be more difficult to scale at first, by using focused marketing techniques, brands can develop a devoted following and reach niche markets.
Advantages of B2B2C
A number of factors, such as shifting consumer purchasing habits, lower operating expenses, and the incorporation of automation and innovative technologies, are driving the shift towards B2B2C.Growth of Hybrid or Remote Work
The hybrid work trend has become a long-term shift that influences consumer purchasing behavior. Most of the population prefers home delivery services, which are now more than just a luxury; they are now necessary.
Convenient delivery options are more necessary now that more people are working from home. From groceries to office supplies, this covers it all. Since more remote workers are looking for home delivery, businesses like Instacart and Amazon Fresh have expanded dramatically.
Make your business Scalable
It can be difficult for many B2B businesses to grow without compromising the quality of their services. They can optimize opportunities by forming partnerships with businesses that complement each other.
For example, cloud-based solutions enable businesses to pay only for the resources they use, resulting in significant savings when compared to maintaining physical servers, while digital platforms can handle larger customer databases with little additional infrastructure.
Minimized Operating Expenses
B2B2C intermediaries can increase cost efficiency by streamlining operations. To streamline their supply chains, companies can improve demand forecasting and decrease manual processes by utilizing technology, digital marketplaces, and data analytics.
Automating order fulfillment, inventory management, and customer service can reduce overhead expenses, and predictive analytics can help inform inventory choices.
Get Budget-friendly Consumer Pricing
By cutting down on supply chain middlemen, the B2B2C model can result in more affordable prices for customers. Customers can benefit from lower prices by removing additional markups from middlemen when businesses are connected directly to end users.
What Are the Characteristics of a B2B2C Relationship?
Communication and compatibility between the partnering companies are essential for a successful B2B2C relationship. Usually, one partner seeks entry into the consumer market while the other already has access to it. Important components of a fruitful collaboration include:
Easy Access to Customer Information
Access to customer data is crucial for companies looking to enter consumer markets. The likelihood of success increases with the amount of data available. Before a partnership even starts, it may be hampered by a lack of data sharing.
Recognition of Brands
The strength of your brand may make the difference between a sale and a lost chance. One of the main drivers of business-to-business (B2B2C) partnerships is the recognition of one partner’s brand, which can give the other company looking to enter the consumer market a competitive edge.
The Collaborative Ecosystem
A B2B2C model involves several companies working together to provide value to the final customer. Retailers, wholesalers, and manufacturers may collaborate in this partnership to offer a smooth consumer experience. To deliver products straight to customers, for example, a food manufacturer may collaborate with a grocery delivery service.
Collaborative Marketing and Branding Initiatives
Even though the B2B intermediary frequently has its own branding, there is usually a common marketing approach that emphasizes the benefits of the collaboration. For instance, a skincare company and an online beauty marketplace could work together to co-brand advertising campaigns, increasing both companies’ visibility.
The Customer-centric Method
Improving the customer’s experience is the ultimate objective in a business-to-consumer relationship. To adjust offerings appropriately, businesses need to comprehend the preferences and behaviors of their customers. For instance, a tech business may offer retailers software solutions that let them offer individualized shopping experiences based on customer information.
B2B2C eCommerce’s Challenges
Despite its many advantages, coordinating a fruitful B2B2C collaboration can be difficult, especially in areas like:
Data Sharing
All stakeholders must seamlessly integrate their data for B2B2C partnerships to be successful. It is necessary to synchronize pricing, marketing plans, inventory, customer records, and loyalty information. A fragmented customer experience may result from failure to accomplish this, and it can be difficult to strike a balance between the necessity of data sharing and customer privacy.
Distinguishing Your Brand
B2B2C relationships presume distinct brand differentiation, in contrast to white-label partnerships. When several companies are involved in distribution, it can be difficult to maintain a consistent brand image across various businesses.
Product Marketing
Fair contributions from both sides are required for product promotion. The partnership may lose its effectiveness if one partner fails to sufficiently promote the other’s offerings.
Margin control and pricing
Profit margins and pricing strategies are complicated by the numerous stakeholders involved in B2B2C transactions, each of whom hopes to gain something from the agreement. At different phases of the B2B2C model, different regulations might also be applicable, which would have an impact on the structure of pricing.
Challenges in Customer Service
Numerous customer service issues arise when there are numerous stakeholders. Since the intermediary company frequently manages the majority of consumer interactions and each group may have different needs, the original company’s capacity to obtain direct feedback or quickly address problems may be limited.
Scalability and Integration of Technology
It can be technically difficult to ensure smooth integration between customer service systems, especially as the number of partners and customers increases. Maintaining service quality at scale is becoming increasingly challenging.
A tale of b2b2c partnership success
B2B2C implementations can help identify successful strategies. The following are two notable examples:
Facebook and Spotify
Spotify is a well-known music streaming service that wanted to boost user interaction and share music effectively. They collaborated with Facebook, which helps Spotify users share their favorite songs and playlists on Facebook. This makes it simple for their friends to find new music and share exciting content that keeps users engaged on Spotify’s network.
McDonald’s and Uber
McDonald’s and food delivery service Uber Eats teamed up to deliver meals right to customers’ doors. Customers who preferred to eat at home could be reached by McDonald’s by utilizing Uber’s logistics capabilities. This collaboration proved to be a great success, as Uber Eats gained access to a well-known brand that increased platform usage, and McDonald’s was able to capitalize on the rising demand for delivery services, particularly during the pandemic.
Walmart and Nestlé
The world’s leading food and beverage company, Nestlé, partnered with Walmart to market its goods both online and in its physical stores. Nestlé boosted sales and brand awareness by working together on joint marketing campaigns and taking advantage of Walmart’s wide audience. This collaboration improved the shopping experience for customers searching for high-quality food options by enabling Walmart to carry a wide variety of Nestlé products.
The Final Word
Using a variety of sales channels and alliances, the B2B2C model offers a successful way to scale customer acquisition. But running a profitable business-to-business (B2B2C) operation can be challenging.
Companies need to manage supply chains, establish clear customer ownership, maintain seamless data flows, negotiate profitable partnerships, and guarantee consistent customer experiences. Connecting with an expert can be helpful for implementing b2b2c in the most effective manner for ensuring a successful outcome.
