Business to Business (B2B) models refer to the structure of a company. They are the internal processes and procedures that a company uses to sell its products or services to other companies instead of individual consumers. B2B businesses are also called “business-to-business” or “B2B” suppliers, customers, vendors, and partners.
- Any business has three options:
- Manufacturer, wholesaler, or reseller
- Product owner, agent, distributor, or licenser
- Service provider, contract worker, or consultant
The business model is not only about the external customers but about how employees and managers interact within the organization. The B2B structure of your business is a reflection of your company’s values and principles. The sophistication of your organization will determine how your company operates internally and externally.
B2B Organizational Model
An organizational model provides a wide perspective on the structure of your company. It organizes employees based on the nature of their jobs. The most common organizational models are functional and geographical, with variations of hybrids. You can decide to use a functional organizational model or a separate departmental organizational model. A functional organizational model divides tasks by type of work such as accounting, IT, marketing, and sales. A departmental organizational model divides tasks by departments, such as sales, marketing, IT, accounting, and HR.
The best organizational model for B2B companies depends on the nature of their products and services, buyers, and industry. You can choose a functional organizational model or a departmental organizational model to scale your company.
B2B Transactions
B2B transactions are business-to-business (or B2B) transactions that involve a business that purchases or uses another company's product, service, or technology. These types of transactions may include orders for goods or services, consulting or contracting work, or the purchase of advertising space.
B2B transactions can take many forms, including online sales, phone calls, and email interactions. They can also occur offline and between individuals who know each other and trust each other.
A B2B transaction may take place between businesses that are based in different countries. It may also involve companies that operate in different industries. A B2B transaction can be one-time or ongoing. These B2B transactions can be really helpful in getting along with unlocking potential customers from both parties if both parties are engaged in investment or collaboration with each other.
For example, it could be an order for a product whose value increases over time if the buyer decides to reorder it later on. It could also be recurring if the buyer purchases more than one product at a time from the same supplier.
B2B Marketing Model
A B2B marketing strategy/model describes how your company acquires, retains, and grows its customers. Basically, it’s the strategy your business uses to attract, cultivate and maintain customers by providing them with value. The marketing model is a strategic plan for increasing sales. It’s about understanding customers and how your company meets their needs. It answers questions like who your customers are, what are their needs, and how can your company satisfy them. A B2B marketing strategy covers all aspects of marketing, including sales, branding, advertising, and public relations.
The marketing model is an integrated part of a business’s strategic plan. It’s part of the company’s business model. Your marketing model will depend on the type of goods or services you offer, your customers and their needs, and your marketing objectives.
B2B Sales Model
A sales model describes how your company generates sales to generate revenues. It also describes how your company trains and compensates its sales personnel. A sales model is a single integrated system for generating leads, closing sales, renewing customers, and managing the logistics of order fulfillment. Your sales model may be a single-source solution or a multi-source solution depending on the nature of your goods or services.
A single-source solution is when one department takes care of all sales activities. A multi-source solution is when more than one department takes care of sales activities. A single-source sales model is best for B2B companies that sell complex products and services. It works best when the company has the capacity to handle all sales activities in-house. A multi-source sales model is better for B2B companies that sell products or services with lower complexity.
B2B Supply Chain Model
A supply chain model describes how your company acquires and manages the raw materials, parts, components, and logistics needed to produce your products or services. It also describes how your company transports its finished products to your customers. A supply chain model is a single integrated system for managing the entire supply chain process. A supply chain is the movement of goods from the original source of production to the final end user. A supply chain model can be a single-source solution or a multi-source solution.
A single-source solution is when one department takes care of all supply chain activities. A multi-source solution is when more than one department takes care of supply chain activities. A single-source supply chain model is best for B2B companies that produce simple products with low risk. It works best when the company has the capacity to handle all supply chain activities in-house. A multi-source supply chain model is better for B2B companies that produce complex products with high risk.
Key Takeaway: What exactly is B2B?
A business model is not only about the external customers but about how employees and managers interact within the organization. The B2B business model refers to the structure of a company. It includes the internal processes and procedures that a company uses to sell its products or services to other companies instead of individual consumers. The B2B structure of your business is a reflection of your company’s values and principles. The sophistication of your organization will determine how your company operates internally and externally. B2B businesses are also called “business-to-business” or “B2B” suppliers, customers, vendors, and partners.