A type of commerce where transactions occur between two businesses rather than between a business and individual consumers.
What is B2B (Business-to-Business)?
B2B, or business-to-business, refers to the sale of goods or services from one company to another. Instead of selling directly to end consumers (as in B2C), B2B transactions involve businesses purchasing products, raw materials, software, professional services, or wholesale inventory for their own operations, resale, or production. Common examples include a manufacturer selling components to another manufacturer, a wholesaler supplying retailers, or a software company providing enterprise solutions to corporate clients.
B2B sales often involve larger transaction values, longer sales cycles, and more complex decision-making processes than consumer sales. Contracts, negotiations, and bulk purchasing agreements are common, and relationships are typically long-term and based on reliability, quality, and pricing.
For U.S. companies owned by non-U.S. residents, B2B can be a strategic model because it often bypasses the high marketing costs associated with reaching consumers directly. Instead, efforts are focused on targeted outreach, industry networking, trade shows, and building partnerships. E-commerce also plays a role in B2B, with specialized wholesale platforms and digital catalogs allowing for streamlined purchasing and fulfillment.
While B2B offers the potential for steady, high-volume sales, it requires an understanding of business contracts, compliance (such as sales tax collection for wholesale transactions), and in some cases, resale certificates to allow clients to purchase without paying sales tax on goods intended for resale.
