Today, in the age of technology, the concept of business is experiencing constant changes. During the last 20 years, it had evolved greatly due to the penetration of electronics and computers into everyday business practices. The most remarkable changes were caused by the advancement in telecommunications, with the Internet as the most remarkable mean of telecommunication.
Internet technology made it possible for businesses to reach customers and businesses all over the world. This fact led to dynamic and rapid economic globalization, turning both B2B and B2C into multibillion industries. Understandably, each type of e-commerce, either B2B or B2C, needs a supply chain for the transportation of purchased goods. Even though that there is an opinion that B2B and B2C have the same type of supply chain, the models they use differ.
The supply chain is a series of channels a product takes from its initial production to reach its final destination (Learn That, 2004). This includes warehousing, transportation from a distribution center to store or to customer as a final destination.
According to the definition given by Wikipedia, “Business-to-business (B2B) is a term commonly used to describe electronic commerce transactions between businesses” (Wikipedia Business-to-business, 2007). B2B eCommerce takes place when companies are doing business online with each other, but in later years it expanded over bonds of corporate sales due to outsourcing tendencies these days.
B2C, according to Wikipedia, “describes activities of E-businesses serving end consumers with products and services,” which is stereotyped by a traditional store, which has an online version. Most people associate B2C eCommerce with such websites as Amazon.com, Wallmarket.com, and others, yet online stores form only a part of the B2C industry as it also includes financial institutions and other types of business structures, which contribute to making and receiving purchases online. Such services include online banking and payment processing, online auctions, travel and health services, different types of consulting services, etc.
It might appear from the first sight that B2B and B2C supply chains are similar, yet it’s not accurate. The main difference is in the organization of logistics. The amounts of the channel through which purchased products should go before reaching end-users are different. B2B has a less number of channels, yet channels are greater in size, while there is a greater amount of channels of a smaller size in B2C eCommerce. For example steel mill is looking for iron ore for steel production. In this case, the supply chain will be the following: steel mill – supplier company- mine. For example, if to look at B2C operation of purchasing mp3 player in an online store, the chain will be the following: individual-online store-payment processing house-online store-warehouse-delivery service.
Another aspect, which makes B2C and B2B technology look different, is software implementation, as approaches for B2B and B2C are different due to the different needs of both businesses. In B2B processes, there has to be software integration into the software of both partners for the proper functioning of supply, billing, and support. In the B2C case, there is no need for such integration due to different business concepts. The customer accepts conditions that are set by online store or services sellers using their online systems.
Making a conclusion, it’s important to note that technology made improvements and resulted in changes that occurred in business operations. The supply chain principles have also changed. But both B2B and B2C e-commerce models continue to be extremely successful.
References
- Wikipedia, (2007). Business-to-business. Web.
- Wikipedia, (2007). Business-to-consumer. Web.
- Learn That, (2004) Definition of Supply Chain. Web.
- Murphy, Debra (2007) Marketing for B2B vs. B2C – Similar but Different. Web.
- Leopard, Sherri (2006) B2B vs. B2C marketing — do the differences matter?Denver Business Journal. Web.