B2B Definition | Business-to-Business Model (2 Minutes!) | Finance Strategists

- 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.

(upbeat music)

For more information, visit
www.financestrategists.com.

(beeping)

Finance strategists, strategies for you--

- [Director] Cut!