What is B2B? B2B Review, Features

B2B (Business-to-Business) refers to a business model in which enterprises exchange and transfer data and information and conduct transactions through a dedicated network or the Internet. It closely integrates the enterprise's intranet and the company's products and services with customers through B2B websites or mobile clients, and provides customers with better services through the network's rapid response, thereby promoting the company's business development.

About B2B

· B2B2B, which closely integrates the enterprise intranet with customers through the B2B2B website, provides customers with better services through the rapid response of the network, thereby promoting the business development of the enterprise. At the same time, compared with the traditional B2B model, B2B2B provides more secure and convenient services for online transactions.

·B2B2C, derived from the evolution and improvement of the current B2B and B2C models, perfectly combines B2C and C2C. Through the B2B2C model, e-commerce enterprises build their own logistics supply chain systems and provide unified services.

Mode Introduction

1. Vertical B2B for manufacturing or business

Vertical B2B can be divided into two directions, namely upstream and downstream. Manufacturers or commercial retailers can form a supply relationship with upstream suppliers. For example, Dell Computer Corporation cooperates with upstream chip and motherboard manufacturers in this way. Manufacturers and downstream distributors can form a sales relationship, such as the transactions between Cisco and its distributors.

2. B2B targeting the intermediate transaction market.

This transaction model is horizontal B2B, which brings together similar transaction processes in various industries in one place, providing a transaction opportunity for the buyers and suppliers of enterprises, such as Alibaba, Wosou, Global Sources, ECVV, TOXUE Foreign Trade Network, etc.

3. Self-built B2B model

The self-built B2B model of industry leading enterprises is that large industry leading enterprises build industry-specific e-commerce platforms with their own product supply chains as the core based on their own information construction level. Industry leading enterprises connect the entire industry chain through their own e-commerce platforms, and upstream and downstream enterprises in the supply chain realize information, communication and transactions through the platform. However, such e-commerce platforms are too closed and lack deep integration of the industrial chain.

4. B2B model in related industries

The related industry B2B model is a cross-industry e-commerce platform established by related industries to improve the breadth and accuracy of information on the current e-commerce transaction platform and integrate the comprehensive B2B model and the vertical B2B model.

Implementation

1. E-commerce models for intangible products and services

(1) Online subscription model

An e-commerce model in which companies provide consumers with online direct subscriptions through web pages, and consumers directly browse information. The online subscription model is mainly used by commercial online organizations to sell newspapers, magazines, cable TV programs, etc.

2. Pay-per-view model

An e-commerce model in which companies provide consumers with pay-per-view online information browsing and information downloading through web pages. The pay-per-view model allows consumers to selectively purchase an article, a chapter of a book, or a page of a reference book on the website according to their needs.

3. Ad-supported model

The advertising-supported model refers to the online service provider providing information online services to consumers or users for free, and all business activities are supported by advertising revenue. This model is one of the most successful e-commerce models. Since the advertising-supported model requires advertising revenue from online companies to maintain, whether the company's webpage can attract a large number of advertisements becomes the key to the success of this model.

2. E-commerce model for physical goods

Physical goods refer to traditional tangible goods. The delivery of such goods and services is not through computer information carriers, but still through traditional methods. Although the transaction of physical goods on the Internet is still not very popular, it has made great progress. The online transaction volume has increased.

The main feature of online physical goods sales is that the online sales market has expanded. Compared with traditional store sales, online sales can extend business to every corner of the world.

3. Comprehensive model

In fact, most companies do not adopt just one e-commerce model for online sales, but often adopt a comprehensive model, that is, combining various models to implement e-commerce.

Website Costs

1. Technology Cost

B2B technology costs include software and hardware costs, learning costs, and maintenance costs. E-commerce is the product of the combination of various technologies. Expensive investment, complex management, and high maintenance costs make some companies that lack systems, technologies, and talents reluctant to start.

2. Security costs

In any case, transaction security is always the primary issue that people are concerned about. How to ensure the fairness and security of transactions online, the authenticity of the identities of both parties to the transaction, the integrity of the transmitted information and the non-repudiation of transactions has become the key to promoting e-commerce.

3. Logistics costs

The most difficult problem to solve in e-commerce is logistics and distribution. Logistics and distribution is the important and final link in e-commerce, the goal and core of e-commerce, and an important measure of the success of e-commerce.

4. Customer costs

The customer cost of e-commerce refers to the total cost spent by customers on Internet access, consultation, payment, and finally the arrival of goods during online transactions. This is a service that is completely dependent on the Internet. As soon as consumers start to enjoy such services, they have to bear a minimum cost of several yuan per hour, not including the cost of purchasing corresponding hardware equipment and learning how to use it.

Profit Model

1. Platform commission: e-commerce transactions can receive platform service fees.

2. Supply chain finance. Most of the bulk B2B currently involves supply chain finance.

3. Provide customers with warehousing, processing and logistics services and receive a certain service fee.

4. Traditional consulting, advertising, meetings, etc. are also a type of service fee.

5. Technical SaaS services. Technical SaaS services are a good source of income, but so far, I have not seen any company in the industry say that providing technical SaaS services is a good profit model. 6. Bills. In the settlement of large transactions, in addition to cash settlement, a large proportion is bill settlement. Bill settlement involves silver bills and commercial bills. In the process of transaction and settlement, certain arbitrage opportunities can be generated. I call it bills, and I will not elaborate on it here.

feature

1. The upstream and downstream of the industry are sufficiently dispersed

There are many manufacturers upstream and many customers downstream. The circulation of commodities in the entire industry must be completed through layers of distributors. After multiple levels of product price increase, there are also logistics costs brought about by multiple circulations, which makes each level have pain points in information acquisition and cost.

2. Both parties to the transaction are relatively rational and only care about interests.

Because the transaction amounts between enterprises are relatively large, and the requirements for transaction indicators such as product quality and timeliness are high, both parties are relatively rational.

3. Products are relatively standardized and digitized

There are product "rules" in the industry, and a set of industry standards are implemented. Even if it cannot be accurately expressed with data, there is a set of specifications for describing the product.

4. There are many types of products and SKUs in the industry, and prices change relatively frequently

Only when the product variety reaches a certain level can the advantages of the B2B platform using the Internet be demonstrated. If prices change too frequently, such as changing every day, it will not only make the platform operation difficult, but also reduce customers' trust in the platform. However, if prices are very stable, the platform itself loses its meaning of conveying transaction information.

5. The average order value is moderate.

If the average order value is too low, the company will have no advantage over the 2C platform, will be slow to grow, and will not be able to bring out the advantages of centralized purchasing and marketing. If the average order value is too high, such as exceeding RMB 100,000, companies will generally be cautious about adopting offline transactions.

Development Trend

1. Enterprise-level e-commerce platforms will enter the national strategy

There is another large category of B2B platforms, which are enterprise-level self-operated e-commerce platforms. This type of platform is a traditional American B2B platform model, integrating suppliers upstream and distributors downstream, and can also be called an enterprise supply chain e-commerce platform. Since 99% of Chinese companies are small and medium-sized enterprises, the B2B platform was born as a third-party service model after it was introduced to China. Third-party services are also the most suitable B2B service model for the current situation of Chinese companies. With the strong support of national policies, enterprise-level e-commerce B2B platforms will enter a good opportunity for development.

2. Internet finance becomes a standard service for B2B platforms

Internet finance, especially supply chain finance related to B2B, will become a standard service for all B2B platforms. The strategic layout of enterprises in 2013 is already evident. For example, Alibaba, HC360, and Wangsheng are all setting up related small loan companies or guarantee companies. Enterprises are gradually no longer satisfied with the weak financial cooperation with banks. Since B2B operators really use their own funds to carry out such business, they will have to take credit as seriously as banks in terms of review. B2B operators will not be satisfied with providing isolated loan products to individual enterprises. Loan products that combine upstream and downstream may become loan products with stable profit levels and lower risks.

3. Mobile e-commerce becomes the driving force for the development of e-commerce

Mobile e-commerce has its unique advantages: mobile e-commerce allows users to conduct business activities anytime and anywhere; the user scale is large; personalized services are provided; mobile payment is convenient, fast and low-cost, so the development of mobile e-commerce is undoubtedly a major trend in the future development of B2B e-commerce.

advantage

1. Reduce procurement costs

By establishing inter-enterprise e-commerce with suppliers and realizing automatic online purchasing, enterprises can reduce the human, material and financial resources invested by both parties in transactions. In addition, the purchasing enterprise can integrate the internal procurement system of the enterprise, purchase from suppliers in a unified manner, and obtain discounts for bulk purchases.

2. Reduce inventory costs

By establishing an inter-enterprise e-commerce system with upstream suppliers and downstream customers, enterprises can determine production based on sales and supply based on production, achieve efficient operation and unification of logistics, and control inventory to the maximum extent. For example, by allowing customers to place orders online, the company's business processes can be efficiently operated and inventory costs can be greatly reduced.

3. Save Turnaround Time

Enterprises can also establish a unified e-commerce system with suppliers and customers to achieve direct communication and transactions between suppliers and customers, thus reducing the turnover links. For example, Boeing's spare parts are purchased from suppliers, and a large part of these spare parts are used by its customer airlines to repair aircraft. In order to reduce the intermediate turnover links, Boeing established an e-commerce website to achieve direct communication between Boeing's suppliers and customers, greatly reducing the turnover time of spare parts.

4. Expand market opportunities

By establishing online business relationships with potential customers, companies can cover markets that were previously difficult to cover through traditional channels and increase their market opportunities. For example, through online direct sales, 20% of new customers come from small and medium-sized enterprises. By establishing inter-business e-commerce with these companies, the transaction costs of both parties are greatly reduced, increasing the profit motivation of small and medium-sized enterprise customers for online procurement.

shortcoming

1. The problem of industry scale. The primary problem that plagues industry B2B websites is the problem of industry scale.

2. Industrial chain issue. Industrial chain is a concept in industrial economics. It is a chain-like relationship form that is objectively formed among various industrial sectors based on certain technical and economic connections and in accordance with specific logical relationships and time-space layout relationships.

Development History

Phase 1: Email Phase

This stage can be considered to have started from the 1970s, with the average communication volume increasing several times each year.

Phase 2: Information Release

Since 1995, information publishing systems represented by Web technology have grown explosively and become the main application of the Internet.

Phase 3: EC (Electronic Commerce)

EC stands for the electronic commerce stage. EC has just begun in the United States. The reason why EC is listed as a landmark thing is that the ultimate main commercial use of the Internet is electronic commerce. At the same time, it can also be said conversely that business information in a few years will be mainly transmitted through the Internet.

The fourth stage: the whole e-commerce stage

With the emergence of the SaaS (Software as a Service) software service model, software has been launched on the Internet, extending the e-commerce chain and forming the latest "full-process e-commerce" concept model.

Stage 5: Wisdom

In 2011, as Internet information fragmentation and cloud computing technology became increasingly mature, active Internet marketing models emerged, and i-Commerce (individual Commerce) came into being. E-commerce broke away from the status quo of traditional sales models being moved to the Internet, and communicated with users in depth from multiple angles such as initiative, interaction, and user care. Among them, ICE proposed by IZP Technology Group is the most representative.