- Hi I'm Ranie, finance strategist.
In this lesson, we're going to cover
understanding the B2B business model.
A business-to-consumer, or B2C business model,
is one in which a company sells a service
or product directly to a consumer.
It is the alternative to the business-to-business model,
or B2B, in which a company sells their products
first to another business,
which will then often sell the product
at a retail store at a marked up price.
Companies can either be a B2B, a B2C or a hybrid of both.
B2B as a business model, is generally higher revenue
per customer but lower volume.
Whereas B2C is generally a higher volume
but lower revenue model.
Examples of the hybrid model are SaaS companies,
which often has several different tiers of service,
tailored to companies or individuals
depending on the service.
In general, businesses are more price sensitive
and care less about the presentation,
whereas customers are less price sensitive
and care more about the presentation.
Selling chocolate to a business who's going
to create something with the chocolate,
they don't care as much
about the packaging the chocolate arrives in,
whereas if you look at the presentation of chocolates
in a grocery store, by companies like Godiva,
there's a huge emphasis placed on presentation.
Generally businesses are more elastic,
and generally customers are less elastic.
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