The world of commerce is constantly evolving, especially in the electronics/digital niche. That means new business models are being developed every decade or two. One of these developments is the creation of B2B2C. Read on to know more about it, the benefits it can provide you as a small or medium-sized business owner, and important points on how to make it work.
What Is B2B2C?
B2B2C or Business to Business to Consumer is a type of business model where two companies partner up or collaborate in selling products and services to customers. Simple isn’t it? Not really. Although you might think that this model is exactly like dropshipping or retail, it’s different.
This business model is a new and emerging market and a form of innovation where a company can rapidly scale its operations without having to handle everything itself. A good example of B2B2C is Instacart and grocery stores.
Instacart offers services of packing up the ordered products from the grocery store and delivering the goods to their customers. The customer knows that the goods delivered are brought from the grocery store of their choice and they’re paying Instacart for the convenience.
Because B2B2C boosts a company’s sales while making things easier for consumers to purchase goods and avail services, more and more businesses are adopting this model. In fact, the insurance sector is predicting their market shares to significantly improve in the next 6 years by following the B2B2C model.
How Can You Benefit From This Business Model?
1. It boosts your brand’s reputation
Either you own company 1 or company 2 you can deliver your goods or provide services at maximized efficiency because you follow a streamlined system of operations. This will make customers very happy and they would easily come back to transact again.
2. You’re able to expand your operations with less time and effort
As a follow-up to benefit #1, you can increase your production or operations without too much time, manpower, and monetary investment. Producing companies will not worry about the delivery because convenience companies will handle that.
Convenience companies will also not worry about production and storage because producing companies will take the helm. Overall, both companies can funnel their funding into buying more equipment, machinery, raw materials, and hiring more talents to increase sales.
3. Access to qualified leads
Because B2B2C is mainly a partnership, company 1 can say to company 2 to “advertise to these guys because they are good customers”. Company 2 can then say to the customers to buy from them because they deliver quality goods. And finally, company 1 can say to customers to avail company 2’s services because they deliver purchases in a quick and safe manner. Think of B2B2C as a symbiotic relationship in the world of commerce.
3 Strategies To Make A B2B2C Business Model Work
1. Be ready to negotiate
If your brand is still small, you’re really going to give most of the benefits to the bigger company to sustain the partnership. It won’t be a gamble but it requires a lot of patience from the start. The good thing is that if the partnership pays off, the bigger company will repay your quality services and goods with better perks. Some will even invest in your little brand.
2. Strive to improve digital systems
B2B2C is mostly run on digital platforms. It is essential that both companies 1 and 2 will use a centralized, safe, and stable digital platform to prevent transaction errors and communication confusion.
3. Keep the products and services to deliver simple and small to medium-sized
B2B2C is still limited to small or medium-sized transactions. While most digital platforms designed to work for the business model are not further developed, businesses that seek to adopt it are strictly advised to keep things simple.
For now, the best way to scale up operations is to increase production capacity, delivery manpower, and reach out to more customers. Only Amazon has the capacity as a B2B2C company to handle large-scale deliveries.
The topics I’ve covered about B2B2C in this article are just an introduction. If you feel this is a business model that would grant your brand a lot of opportunities to scale up in the future, I highly recommend that you research more about it.
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