*What is B2B?

Have you ever heard the term B2B (pronounced as bee-to-bee), well it doesn't have anything to do with honey farming or something similar. So then what does the term B2B stand for? Actually this is related to business terminology and stands for business to business. So what is the relation of this term B2B with the echelons of the moolah? We all know that business basically consists of exchanging goods or services between the seller and the buyer and the exchange could be local or in the form of import/export or global sourcing of goods or services. Now the buyer could be an individual or yet another business organisation or company. It is here that the differentiation comes in the picture and the concept of B2B or business to business could become clearer. An arrangement where the exchange of goods or services occurs between two businesses rather than a business and a consumer is known as B2B or business to business whether it takes place locally or is in the form of import/export or global sourcing.

Hence it can be seen that the main difference in B2B or business to business transactions and B2C or business to consumer transactions is the volume of exchange during the conduct of the transaction in the form of domestic exchange, import/export or global sourcing. It must be noted that B2B or business to business is a relatively new concept which only came into existence after the era of e-commerce started to take roots in the import/export and global sourcing context in the international arena.

Talking in more strict technical terms, B2B or business to business can also be defined as those transactions which take place in the industrial value chain before the final product actually reaches the consumer at the last end of the chain. Therefore whatever way we see it, basically all such activities in local/domestic transactions, import/export and global sourcing transactions come under this umbrella of the definition of the term. Such transactions are also referred to as institutional sales which mean the one and the same thing.

To take a simple example a company manufacturing some product and selling it to wholesalers is a form of B2B or business to business transaction whilst the same wholesaler selling the product to consumers is a B2C transaction.

There are a lot of aspects of B2B or business to business which will be taken for analysis separately in different articles but broadly speaking, it is sufficient to know at this stage that no aspect of business be it import/export, global sourcing or local exchange, is untouched from the concept of B2B or business to business dealings.

Article Source: http://www.rightbiz.com

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