B2B2C eCommerce Model

Let us disclose B2B2C meaning. Business-to-Business-to-Consumer (B2B2C) is the term used to describe the eCommerce model wherein Business "A" and Business "B" engage in collaborative business deals and development exercises whereby Business "A" pays Business "B" for the ability to offer Business "A’s" product or service to Business "B’s" consumer customer channel for selling online.

This means an original business that enters the B2B2C collaboration and has a hope to acquire more consumer customers. 

In the classical market model of channel partnership, Business "A" has to find a wholesale buyer, such as a distributor or a retail chain, and establish trade relations with them to sell Business “A’s” goods to retail buyers at the last stage of the sales channel. 

The advantage of B2B2C model in ecommerce is that Business “A’s” products immediately fall into the view of Business “B’s” customers at Business “B’s” ecommerce website, bypassing the intermediate stage of wholesale, resale between companies, and other intermediate stages. Moreover, orders placed online in Business “B’s” online store can be delivered to consumers directly from Business "A", i.e., Business "A" could have direct access to customers if it is allowed by an agreement with Business “B”.

This model is especially effective for the small biz niche and emerging brands that can take advantage of Business “B’s” popularity and reputation.

The essence of the B2B2C model is based on partnership and successful business deals. Such a model is viable if the products of Business "A" do not compete, but complement the products of Business "B". In general, B2B2C model products coming from Business "A" usually expand the functionality of Business “B’s” products or help them be used more effectively.

As an example, consider Business “B”, which sells premium footwear, and Business “A” as a furniture factory. In this case, Business “A” can offer Business “B’s” wealthy clientele its nice-looking oak shelves to store shoes in home dressing rooms.

B2B2C belongs to a win-win-win model in which all parties benefit. Business “A” gets access to Business “B’s” customer base at their ecommerce website and thus increases its sales volume. Business “B” is expanding its range of products offered to the market, can run more cross-sell campaigns, and get commissions from Business “A” for orders made on its online store. 

Consumers can buy Business “A’s” products in their usual sales channel owned by Business “B”. In addition, consumers often benefit from marketing promotions, especially in the first months when Business “A” joins the B2B2C model.
 

Quite often, for Business “A”, the conditions for joining the model are similar to the rules of marketplaces. This means they receive no access to the contact data of the consumers. Accordingly, Business “A” cannot grow its customer base in this way. For example, many analysts classify Amazon as a B2B2C model giant, where small business sellers do not get access to Amazon’s customers and cannot run analytics on such customers. In other words, customer ownership for Business “A” is often not supported in the B2B2C model.

Business “A” can also incur large commissions that go into Business “B’s” pocket. For example, mobile app stores, such as the App Store and its rival Google Play, also work under the B2B2C model, taking up to 30% of the revenue of applications sold there and also charging a fee for joining their mobile app store. 

There is a threat of removing an app from the App Store and/or Google Play at any time, and this is a big risk for the development teams. Given the monopoly nature of the App Store and Google Play, any removal of mobile applications results in the loss or total ruin of numerous Business “A” members who host applications in the App Store and/or Google Play.
 

In the B2B2C model, Business “A” can join Business “B’s” marketing programs, which are usually held on national holidays and events, but could also be personalized (e.g., on the birthday of every person in the client database). This also imposes obligations on Business “A” to get well prepared for sales events and create a sufficient stock of goods in their warehouse to meet the peak demand during sales.

Marketing cooperation between Business “A” and Business “B” provides great opportunities that must be used flexibly and effectively. But Business “A” shouldn't rely on the B2B2C model as its only sales channel and needs to develop its own client base and customer communications. Otherwise, as mentioned above in the section on B2B2C model disadvantages, the cooperation could suddenly stop because of a Business “B” decision, and Business “A” must be prepared for such a risk.
 

Any case when a consumer uses one business to order a product or service from the online store of another business is an example of a B2B2C model in action. Amazon, Alibaba, the App Store, and Google Play are good examples of B2B2C models.

However, large marketplaces implement other sales models along with B2B2C. For example, since other businesses can shop on Amazon along with consumers, the B2B2B model is being implemented. Interestingly, consumers can also place their goods on such marketplaces; therefore, C2B2C and C2B2B models are implemented there as well.
 

B2B2C is a mutually beneficial relationship that offers Business "A" the benefit of introducing its products and/or services to a new range of potential customers. B2B2C also simultaneously generates a new revenue stream for Business "B", as well as positions Business "B" to present its customers with new and relevant products and/or services. The consumer customer base also benefits as a consequence of being the recipient of Business "B’s" expanded products and/or services diversification.

For small manufacturers and startups, the B2B2C ecommerce model offers good opportunities for business development budget savings. This is a way to expand sales - not only in local markets, but also to establish your presence in other markets in which Business “B” operates.