Chapter 3 - Applications in B2B

Question- What is business to business e-commerce ? Discuss the applications of it.

Related Short Answer Questions
What is B2B e-commerce?

Ans.

B2B e-commerce

The original first stage of commerce on the Internet was that of E- Commerce which is business to consumer activities. Business to business goes well beyond that popular form of consumer purchasing. It is intended to bring "Just In Time" concept to a greater height which allow businesses to coordinate with its business associate for real time transaction and improving efficiency and productivity for both organizations. Because Time is money; people are money, good management or both means more money for the business and less expenditure on others. Business-to-business electronic commerce typically takes the form of automated processes between trading partners and is performed in much higher volumes than business-to-consumer applications. For example, a company that makes chicken feed would sell it to a chicken farm, another company, rather than directly to consumers. An example of a B2C transaction would be a consumer buying grain-fed chickens at a grocery store. B2B can also encompass marketing activities between businesses, and not just the final transactions that result from marketing.

Business-to-business (B2B) is the exchange of products, services, or information between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of sales efforts. Instead of receiving orders using sales force - by telephone or e-mail - orders are received digitally, reducing overhead costs. Business-to-business is a form of transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. It refers to business that is conducted between companies, rather than between a company and individual consumer.

In most B2B business models, each organization benefits in some way and typically has similar negotiating powers:

1. Business-to-business is a transaction conducted between one business and another, such as a wholesaler and retailer.

2. B2B transactions tend to happen in the supply chain, where one company purchases raw materials from another to be used in the manufacturing process.

3. B2B transactions are commonplace for auto industry companies, property management, housekeeping, etc.

4. B2B buyers plan for purchases and make recurring purchases.

5. B2B purchases often involve several layers of approval and may involve different departments.

6. B2B purchases are based on long-term and on-going relationships.

7. B2B prices are usually negotiated individually.

8. In B2B payment is often on terms and may be 30 or more days after goods are shipped.

9. B2B buyers want deliveries on a reliable schedule.

Supply chains are more important to B2B transactions. Manufacturing firms obtain components or raw materials from other companies and then sell to a wholesaler, distributor, or retail customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles.

In the context of communication, B2B refers to methods by which employees from different companies can connect with one another, such as through social media. This type of communication between the employees of two or more companies is called B2B communication.

Company websites allow interested parties to learn about a business's products and services and initiate contact. Online product and supply exchange websites allow businesses to search for products and services and initiate procurement through e-procurement interfaces. Specialized online directories providing information about particular industries, companies and the products and services they provide also facilitate B2B transactions.

B2B transactions and large corporate accounts are commonplace for firms, in manufacturing. B2B transactions are the backbone of the automobile industry. Many vehicle components are manufactured independently, and auto manufacturers purchase these parts to assemble automobiles. Service providers also engage in B2B transactions.

B2B transactions require planning to be successful. Such transactions rely on a company's account management personnel to establish business client relationships. B2B relationships must also be nurtured, typically through professional interactions prior to sales, for successful transactions to take place.

Generally, B2B web stores have search, navigation, detailed product information and personal account history pages. Most B2B businesses have complex ordering processes, large collections of attributes and elaborate back-end systems. Moreover, in a B2B scenario, buying is part the customers job. He needs to make sure he buys all necessary products or components for keeping his company up and running. Since organizations can be very large, they need a lot of products or components to keep their business going. Therefore, B2B buyers ofter place large orders B2B purchases are also characterized by recurring orders instead of single purchases. Because of that companies make deals based on their monthly or even yearly demand. They closely collaborate with each other, and each B2B customer can have its specific prices for certain products. Multiple people are involved in B2B purchases. For instance, a company can have multiple buyers or buying centers. They are responsible for finding the right products and making the right deal with resellers. Because multiple people are involved in a single deal. B2B is more fact based.

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