B2B Ecommerce Trends: The B2B vs. D2C Model

Everyone runs an online business these days, from hat shops to jewelry manufacturers to even CBD gummies! But with all these other online businesses popping up every second, how are you supposed to remain competitive?

Well, as it turns out, it’s not about what your business is about but the model with which you run it. When it comes to online businesses, they’re usually run by following one of two models: the B2B model or the D2C model. 

But what are these models? What do those acronyms mean? Which one is best suited for your business? Keep reading to find out more about these exciting new developments in the world of eCommerce.

The B2B Model

First, let’s start with the B2B model. The B2B (or business to business model) has been around for centuries. It’s essentially the idea of having businesses as customers. Many companies use this model, including Microsoft, which sells their software both to large-scale corporations and businesses and consumers. 

It’s also possible for online businesses to adopt this model. Many of them do this by selling in bulk or offering special discounts to those who buy in bulk (meaning purchases a significant number of the same item to later re-sell.) This has been particularly successful for eCommerce fashion businesses since they can sell their clothes at relatively low prices to fashion boutiques and customers alike who like good deals. 

However, this business model has proven obsolete in other areas. The reality is that if you only sell to businesses, then you’re shunning out a massive portion of the market: individual consumers. Individual consumers also make up the majority of buyers online, accounting for 75% of online buyers. 

In case you still can’t decide whether or not this is a good model for your business, here are the pros and cons:

Pros

  • It has been used for decades and proven effective
  • Using the B2B business model, sales made by eCommerce companies are expected to grow by 10% annually until 2023.
  • Low-risk, low-reward

Cons

  • It leaves out a giant portion of the market
  • Proven somewhat ineffective in the world of eCommerce except for specialized stores that sell in bulk
  • It doesn’t generate as much revenue as other business models
  • Puts off potential customers

So, in conclusion, while B2B may have been around for a long time, it’s starting to die out. And for online businesses especially, following an archaic business model is not the way to go. Most individuals shop online, and when they do, they want a fast, easy, personalized experience that ensures they’ll get their products within a reasonable period and will be treated courteously throughout. 

But what kind of business model can deliver on all of these promises?

The D2C Model

The D2C model is the latest trend to hit the eCommerce world by storm, with more and more companies adopting it. But what is this business model about, and how is it different from the B2B model?

Well, D2C stands for direct-to-customer. Just as its name suggests, the idea behind this business model is to get products directly to customers, no middle-man. 

This business model is beautiful to consumers, especially online ones, because what they hope to get from an online purchase is a personalized, stress-free shopping experience. 

But is customer service that important? It seems to be according to consumers. Over 61% of them said they’d be willing to share more personal information with businesses if it meant getting better customer service. Those are huge numbers! And they cannot be ignored. 

Another interesting statistic to bring up is that 54% of customers expect an email offering them a discount within 24 hours of interacting with an online business, and 51% of them think it’s vital to post personalized experiences across all digital brand’s media channels. 

So, it seems that the customers have said that a D2C model is much more preferable to them than a B2B model, and it’s easy to see why. D2C models offer a more personalized experience that customers are looking for. They’re friendlier for the only space, and most experts agree that they tend to bring better and more significant results for a business’s quarterly revenues. 

Another interesting fact is that many companies use D2C models to rise above their competitors. Doing so may seem harsh, but it’s precisely what you have to do if you even want to stand a chance of making it in the online space. 

Because the internet is so vast, there are millions of options out there, and customers have the power to choose which one they want based on their preferences. Because of this, customers don’t quite rely heavily on certain online businesses since they can always go shopping for a different one that probably sells the same products for half the price. 

Alright, if you’re feeling a little disoriented by this point, let’s break this down by looking at the pros and cons:

Pros

  • The most innovative business model out there
  • Preferred by customers
  • Shown to increase revenue by substantial percentages
  • Easy to implement, especially in online businesses
  • Creates a trustworthy customer base that can help the company during hard times

Cons

  • It hasn’t been around for as long as the B2B model.

The Bottom Line

Remaining competitive in the online space is challenging. The internet is a nation run on an attention economy, and if you can’t get customers to pay attention to your business, they’ll surely turn to someone else’s. That’s why switching up your business model for one that puts the customer front and center can genuinely make a difference, both in how you run your company and your revenue.

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