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- Hi I'm Ranie, finance strategist.

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In this lesson, we're going to cover

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understanding the B2B business model.

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A business-to-consumer,
or B2C business model,

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is one in which a company sells a service

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or product directly to a consumer.

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It is the alternative to the
business-to-business model,

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or B2B, in which a company
sells their products

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first to another business,

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which will then often sell the product

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at a retail store at a marked up price.

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Companies can either be a B2B,
a B2C or a hybrid of both.

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B2B as a business model,
is generally higher revenue

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per customer but lower volume.

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Whereas B2C is generally a higher volume

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but lower revenue model.

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Examples of the hybrid
model are SaaS companies,

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which often has several
different tiers of service,

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tailored to companies or individuals

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depending on the service.

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In general, businesses
are more price sensitive

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and care less about the presentation,

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whereas customers are less price sensitive

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and care more about the presentation.

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Selling chocolate to
a business who's going

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to create something with the chocolate,

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they don't care as much

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about the packaging the
chocolate arrives in,

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whereas if you look at the
presentation of chocolates

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in a grocery store, by
companies like Godiva,

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there's a huge emphasis
placed on presentation.

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Generally businesses are more elastic,

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and generally customers are less elastic.

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(upbeat music)

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For more information, visit
www.financestrategists.com.

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(beeping)

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Finance strategists, strategies for you--

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- [Director] Cut!