The B2B2C model — what it is and how it works
As a manufacturer, your organization’s success depends on expanding into new markets and increasing top-line revenue — day in and day out.
But in an age of evolving customer expectations, product and price advantages are no longer enough to deliver exceptional experiences. Meanwhile, with digital disruption at every front, established competitive advantages aren’t as secure as they once were.
Amid these changes, a robust business-to-business-to-consumer (B2B2C) model can help you restock your wholesalers and dealers faster, solve marketing budget headaches, and reduce operating costs — ultimately acquiring new customers in a sustainable, scalable way.
In this article, you’ll learn what B2B2C means, how it’s different from business models like B2B or B2C, and whether it might be right for your business.
What is B2B2C?
In the business-to-business-to-consumer (B2B2C) model, businesses sell products to retailers while gaining valuable data directly from the customers who purchase those goods. B2B2C businesses are present all around us, in our shelves and closets — from Mondelez, the maker of classic snack brands like Chips Ahoy, to Unilever, which manufactures diverse products like Dove and Hellmann’s.
Because manufacturers partner with a retailer, they can take advantage of a B2C business’s investment in customer experience and marketing, ultimately reaching new markets at scale with greater revenue opportunities.
The B2B2C model hinges on successful relationships to deliver exceptional customer experiences.
B2B vs. B2C vs. B2B2C
When it comes to ecommerce, know the differences between these business models to make the right choice for your organization.
B2B — business to business
In a B2B model, businesses sell to other businesses through a process that can include a combination of a sales force, channel partnerships, and ecommerce. Within this model, there are three common business categories.
B2C — business to consumer
Business to consumer is a business model where businesses sell directly to consumers. B2C businesses may manufacture the products themselves, like Nike or Apple. They can also buy products wholesale from different manufacturers and sell an assortment to consumers, in the case of a B2C brand like Macy’s or Dick’s Sporting Goods.
B2B2C — business to business to consumer
With B2B2C models, businesses partner with other companies to reach new customers. Manufacturers sell a consumer product to retailers, who in turn sell that product to consumers.
How does a B2B2C model work?
In a B2B2C relationship, the manufacturer benefits from direct access to customer data and additional brand recognition through the retailer. With these keys to growth, the manufacturer can accelerate their expansion and scale.
Let’s look at a simple, hypothetical scenario where a baseball bat is being sold through a B2B2C model:
Examples of B2B2C partnerships
Every B2B2C relationship can operate differently based on the business’s needs. Let’s look at some real-world examples of successful partnerships.
Protein bar company RXBAR gained enough early momentum with a B2B2C model to also take advantage of a direct-to-consumer (D2C) model where consumers can purchase directly from them through its B2C ecommerce site.
How it works: RXBAR sells wholesale to a range of businesses like Whole Foods and REI. Whether they’re grocery stores, fitness centers, or convenience stores, retailers purchase the product through RXBAR’s B2B ecommerce site, email, and phone.
A look at the RXBAR websites reflecting the different B2B (left) and B2C (right) models.
A leading manufacturer of gaming and consumer computers, ASUS also finds success with a B2B2C model, complemented by ecommerce capabilities where the company can offer D2C through its website.
How it works: ASUS relies on a network of resellers like Best Buy, Costco, and Walmart. In addition to traditional channels, ASUS offers ecommerce functionality for resellers to browse and purchase ASUS products to resell to its customers through ecommerce and brick-and-mortar stores.
Digital streaming and recording product manufacturer TiVo operates both a B2B2C and D2C business model, partnering with a variety of retailers that can offer national reach.
- How it works: TiVo sells its media streaming devices directly through its website and electronics retailers like Best Buy and QVC, which feature the product both in store and through ecommerce.
Tivo offers its products through its website (left) as well as resellers like Best Buy (right).
Channel partnerships vs. B2B2C
Comparing channel partnerships to B2B2C can be confusing because it’s a similar type of interaction where a manufacturer sells its products to a retailer. But in a channel partnership, the relationship stops after that transaction — the manufacturer doesn’t gain access to any customer data or insights.
A real-world example of B2B2C in action is when Office Depot sells a Swingline stapler. Office Depot purchases the staplers in bulk and sells them to its customers. While Office Depot manages the customer experience, Swingline isn’t responsible for any part of that relationship.
In some cases, channel partnerships can lead to a company relabeling the products it sells under a house brand instead of the original manufacturer. For instance, this would mean Office Depot rebrands the Swingline staplers under its own brand. Because consumers aren’t aware of the original manufacturer, Swingline loses out on an opportunity to build brand recognition.
When to consider B2B2C
Knowing when your business is ready for the B2B2C model is a pivotal moment in an organization. Here are two criteria to keep in mind:
High level of digital maturity
Operating a B2B2C business requires achieving a certain threshold of ecommerce capabilities. Digital maturity is essential for both delivering a seamless customer experience and increasing efficiency to reduce operational costs between the businesses.
While this may seem daunting for traditional B2B businesses, it’s technically simple to set up a B2B2C ecommerce strategy that allows retailers to buy directly from you online instead of traditional channels like electronic data interchange (EDI) or a sales force.
B2B2C works best when both businesses aren’t competing for the same goods or service offerings. It’s an ideal arrangement for manufacturers that want to let the retailer tackle the challenges of customer support and operations.
Perhaps the business wants to focus on product development and rely on the retailer’s marketing expertise to scale. Retail partners typically have access to bigger consumer markets, bringing opportunities like international expansion within closer reach.
Reimagine your business’s trajectory with B2B2C
With a strong understanding of the B2B2C model and its potential impact to change the course of your business, consider whether you have the right technology to take it there. The ecommerce platform you build your business on can drive scalable success. Make sure to investigate new technology purchases to find the features and functionality that matter most.
Ready to find an ecommerce platform to take your revenue to the next level? Check out 12 Things to Know When Choosing a B2B Ecommerce Platform, which teaches you how to make the best decision based on your business needs.