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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 or product directly to a consumer.

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It is the alternative to the business-to-business model, or B2B,

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in which a company sells their products first to another business,

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which will then often sell the product 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 per customer but lower volume;

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whereas B2C is generally a higher volume 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 depending on the service.

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In general, businesses are more price sensitive and care less about the presentation,

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whereas customers are less price sensitive and care more about the presentation.

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Selling chocolate to a business who's going to create something with the chocolate,

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they don't care as much about the packaging the chocolate arrives in,

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whereas if you look at the presentation of chocolates in a grocery store,

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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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For more information, visit www.financestrategists.com.

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Finance strategists, strategies for you...

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Cut!