The defining difference between B2B and
business-to-consumer trade (B2C) is that the first one refers to commerce transactions between manufacturer and retailer, and the second one it is the retailer supplying goods to the consumer. In B2B commerce, it is often the case that the parties to the relationship have comparable
negotiating power, and even when they do not, each party typically involves professional staff and legal counsel in the negotiation of terms, whereas within a B2C context, relationships are shaped to a far greater degree by the economic implications of
information asymmetry. However, in B2B, large companies may have many commercial, resource and information advantages over smaller businesses. The
United Kingdom government, for example, created the post of
Small Business Commissioner under the Enterprise Act 2016 to "enable small businesses to resolve disputes" and "consider complaints by small business suppliers about
payment issues with larger businesses that they supply." In B2B there are business people on both sides, whereas in B2C there is normally one business person and one consumer. In the first case, the decision is pursued by need (because the other business needs it), and in the second case, they are expectations rather than needs. B2B concentrates on raw data for another company, but B2C focuses on producing something for consumers. A B2B transaction entails direct-sourcing contract management, which involves negotiating terms that establish prices and various other factors such as volume-based pricing, carrier and logistics preferences, etc. B2C transaction is clearer, it has spot sourcing contract management that offers a flat retail rate for each item sold. Time is also different as B2B has a slower process than B2C which is concluded in shorter periods (that could be minutes or days). Business-to-business generally requires an upfront investment whereas business-to-consumers do not need a business to spend money on infrastructure. The last difference mentioned here is that in B2B, lagging in the digital transformation, has to deal with back-office connectivity and invoicing a number of different partners and suppliers, while B2C results in more seamless transactions as options, such as cyber-cash, allows the business to accept a wider variety of payment options. B2B typically only allows payment via credit card or invoice, making the purchasing process longer and more expensive than with B2C. B2B, as there are normally bigger amounts involved over longer periods of time, usually have higher costs than B2C, which consists of quick, daily transactions. Businesses typically want to buy on net terms, meaning that B2B merchants have to wait weeks, if not months to get paid for their goods or services. As a result, smaller businesses with less capital often struggle to stay afloat. In B2B, brand reputations greatly depend on the personal relationship between businesses. On the other hand, in B2C, the business's reputation is often fueled by publicity through the media. In many cases, the overall volume of B2B (business-to-business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical
supply chain there will be many B2B transactions involving subcomponents or
raw materials, and only one B2C transaction, specifically the sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windows, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (
B2C) transaction. ==National characteristics of B2B trade==