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Management

Difference between B2B, B2C, and D2C

Online Manipal Editorial Team | November 19, 2022

Key takeaways:

  • E-commerce has influenced the buying behavior of consumers and business revenue models.
  • Retail e-commerce models include B2B, D2C, and B2C. They are sometimes referred to as the traditional eCommerce business models.
  • Each model comes with its own set of challenges and advantages. However, a few companies can operate in more than one model simultaneously.

What is a B2B business model?

The full form of B2B is business-to-business. B2B is a transaction between two business entities (the seller and the buyer). This is a good model for companies that sell their products and services to an intermediary before they reach the final consumer. This is the chain from the producer to the retailer to the final customer. This is known as the chain of commerce distribution. This is the best model for merchants selling bulk goods.

Advantages of B2B

  • Increased efficiency: When companies get to know each other as buyers and sellers, they can work more efficiently. 
  • Sharing resources: It is possible to make each other more money or do better with their resources. This could include collaboration in promotion, transportation of goods, or operational synergies.
  • Potential cost reduction: If companies can build good relationships with other firms, they don’t need to spend as much on marketing. A good relationship with the seller can result in a lower price for the product.

Examples of B2B businesses

India has many B2B companies:

  • IndiaMart
  • Udaan
  • Bizongo
  • Infra.Market
  • Elasticrun
  • Buy Now
  • OfBusiness
  • Eworldtrade
  • Bijnis
  • Vendor Infra

What is a B2C business model?

This model is unique to e-commerce business owners and store owners. B2C does not have a retailer or intermediary, allowing them to sell many goods. B2C allows them to expand their options. That’s why it is the best model of all. The final consumer buys goods and services directly from the manufacturer.

Advantages of B2C

B2C is the most widely used business model in the world. Some advantages are:

  • B2C has a broader reach and scale: You can expand your reach and add new brands and products to your sales channel. B2C businesses are more flexible than D2C models.
  • Omni Channel Distribution: B2C companies can sell products through multiple channels such as retail outlets, online shops, social media channels, or eCommerce sites like Amazon and Flipkart.
  • B2C models have better customer insights: They can target customers based on buying patterns and customer preferences. B2C businesses can cross-sell and upsell to their existing clients.
  • Lower prices: The B2C model allows for lower overhead costs, such as rents and staffing. This ultimately results in lower prices. The business’s profitability is further enhanced by digital marketing and online sales channels.
  • Increased accessibility: Customers can purchase products through multiple online, retail, and social media channels. Customers can purchase the product anywhere, anytime. This further increases sale.

Examples of B2C businesses

Nearly every shop in your area follows a B2C example. It can include both service and trading. 

These are the top B2C companies in India.

  • Hindustan Unilever
  • Dabur
  • Flipkart
  • Croma
  • Reliance Digital
  • DMart

Difference between B2B and B2C

Here is the difference between B2B and B2C:

B2BB2C
Stands for business to businessStands for business to consumer
Have to consult with multiple departmentsOnly have to consider themselves
Buyers have a wider perspective, therefore they invest more time in their research and sourcing processes. Customers are more likely to make emotional or impulsive purchases.
Customers typically repurchase goods and services, therefore organizations must account for the protracted consumer cycle. Customers generally purchase a product only once.
Since they are buying on behalf of entire enterprises, B2B customers have a more limited scope than B2C clients.B2C customers make purchases for personal or family use.
Heavy research is done before approaching any firm.Little bit of research, mouth publicity, or advertisements are enough.

What is a D2C business model? 

A D2C model allows for direct business with customers and facilitates transactions. It is similar to B2C in that it involves both the producer and the end consumer. D2C allows your company only to sell its product and brand. The business is run with an entrepreneurial mindset.

Advantages of the D2C 

India’s D2C market is expected to reach $100 billion by 2025. The D2C business model in India is expanding at an alarming rate. There are good reasons.

  • Few mediators-lower profit-higher price: Brands pay more overhead using intermediaries like wholesalers, distributors, and retailers. D2C is a business model that allows manufacturers to sell directly to consumers without needing a wholesaler or reseller. This reduces the selling cost and increases the company’s net margin.
  • Greater control over brand value and vision: D2C businesses can market their products and sell them on their terms. It can rely on something other than opinions from distributors or retailers to present and sell its products. A company can see its sales channels and determine what is required to increase sales.
  • Valuable customer insights: D2C companies have the best assets in customer data and insights. D2C companies collect valuable information such as contact information, demographics, and buying patterns. These data allow companies to cross-sell, upsell and resell products to existing customers and strategically target new markets.
  • Improved customer service and brand loyalty: Companies directly connected to customers can offer personalized service for returns, repairs, or other questions. Customers trust brands because they are directly responsible for their products and how they function. This trust encourages customers to remain loyal to a brand over time.

Examples of D2C businesses 

India has experienced growing D2C business models in the past few years. D2C companies aren’t limited to smartphones and gadgets. The value of eyeglass manufacturer Lenskart, founded in 2021, was $4.5 billion. Nykaa, a cosmetic brand, became India’s first D2C company to go public. D2C companies quickly grew in India as Indian consumers shifted to online shopping. This was due to their excellent customer service and low prices. These are the top D2C companies in India.

  • Lenskart
  • boAt
  • Patanjali
  • Mamaearth
  • Sugar Cosmetics
  • Xiaomi
  • realme

Conclusion

The major difference between B2B and B2C is that the B2B model is suitable for companies that sell their services or products to other corporations that are intermediate customers. B2C is the most common model for online mercantilism. This includes all companies that sell products or services to customers. D2C businesses can be called B2C. 

D2C brands sell their products, while B2C brands may sell entirely different brands. D2C removes the barriers between the producer/shopper and allows the producer to have greater control over their production, marketing, and name.

You now know the most common e-commerce models and the difference between B2B and D2C, as well as between B2B and B2C. If you want to pursue a degree in business management, look no further than Online Manipal. You can obtain a UGC-entitled degree from top universities including Manipal University Jaipur, Manipal Academy of Higher Education and T. A. Pain Management Institute. Check the website and enroll now!

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