B2B industry (Business to Business)

Gone are the days when businesses were done under the shroud of secrecy and privacy.  With the advent and widespread usage of internet and globalized standards around the world and growing need of transparency due to businesses having been  expanded across the borders , now,  let us all welcome ourselves to a completely novel world of commerce with the features of nearly perfect economy including many strange but related terms one of which is B2B Industry !!!

 Say hello to “B2B”:

The innocent mind of a layman can never understand the intricacies of numerous transactions involved from purchasing to manufacturing to marketing a product before it is brought into his hands. We all see the product as one single commodity unknowing the fact that it may contain many different parts from a variety of different vendors.

Did anybody ever realize that the computer they are using might have a brand name Lenovo, Mac, HP, Dell, Apple, on the top but on the inside it may have a hard disk from hitachi, ram from wintec, motherboards from intel,  monitors, screens, modems, batteries, fans, keyboards, Cd drives, graphic cards, and what not from who knows who.  

This brings us to a need to understanding the B2B or Business to Business industry.

So what is basically B2B??

“When two businesses, small or big, shake hands together for the exchange of their products, services or information, they are involved in the transactions of Business to Business”.

The business relationships among manufactures, manufacturers to wholesalers/retailers, wholesalers to retailers etc. are all included in B2B examples.

You did it Internet!  E-Biz:

B2B e-commerce also called e-biz is a completely evolved form of business to business industry over internet helping different companies in their transactions through electronic exchange of business documents.

When talking about a business transaction so many parties are involved in the supply chain of a company like manufacturers, distributors, suppliers, retailers adding into a value chain and all have different documentation requirements at various levels such as proposals, purchase orders, shipment acknowledgments, sales orders, contracts, tenders etc.

Before internet all the business through supply chain used to be carried out through EDI (Electronic Data Interchange), assisting trading partners with the exchange of all necessary information and documentation. However it had its limits of course which have surely been eliminated with the arrival of internet.

Let’s have it further Divided, Categories:

Now that e-commerce has brought everything over our computer screens and we can buy or sell anything just by one click, how about taking an elaborate look at what further categories can b2b be divided into.

These include,

• ·         Corporate sites
• ·         e-procurement sites
• ·         vertical markets portals
• ·         Intermediary sites
• ·         Infomediaries

·      B2B for B2Bs’

Let’s explore each one of them in detail.

Corporate Sites:

Many companies make their websites in a way creating a network of intranet and extranet with totally customized interfaces for each user with limited login access according to their work and needs. The extranet is for other companies or their employees who are the registered users of the company website for the sake of mutual business. Whereas, the intranet is for the company’s internal usage, for its own employees assisting in an overall performance enhancement internally and externally.

These corporate sites also offer direct sales to their customers.

Imagine a world without internet and these network connections, where a whole team of personnel had to be hired to be on the go to get connected with all the offices and branches of the company itself and with the other companies, suppliers, etc. for the sake of business continuation.

How cumbersome, problematic, time consuming, inefficient it must have been in past and could have been in the present and future without the involvement of technology.

E-Procurement Sites:

These sites include a broad range of vendors and buyers industry wise or generalized, products and services offered, state and corporate laws, terms and conditions that may apply to each industry thus helping trade partners by providing an easy and accessible interface that is secure and trustworthy at the same time.

 In the past the job of a purchasing agent was to go and hunt for the lowest prices and highest quality within a timeframe which included personal visits, negotiations, bidding, proposals, offers, purchasing, shipping, delivery, payment, returns etc.

Now the technology has made it further easier by putting everything including a complete list of vendors, prices, products, etc. on such websites that provides vendor management, catalogue management, contract management, purchase order, e-invoicing, e- payment and almost everything to their users and bring peace and harmony to their lives.

Purchases can be made directly through these sites after going through the bundle of information and thus are very cost effective.

Vertical markets Portals: 

Due to the specific and customized nature of the vertical markets, for they offer goods and services to specialized industries, professions, users etc., these sites may not only serve as a hub of information for such industries by providing every bit of information regarding the companies, products, pricing, discussion groups, but may also provide and support purchasing.

A few examples that may be cited for such industries are construction, medicine or healthcare, Banking, oil and gas, insurance etc.

Intermediary Sites:

These, also known as Brokering sites, aim at connecting two parties the seller and the buyer, or the supplier or product/service providers to the customers.

For example the companies involved in research and development or construction can outsource cleaning of the site after completion of the project contacting one of these brokering websites offering such companies with cleaning services.

These sites also mention their own track records along with all the necessary background information about their registered users and other related statistics for the potential users as well as current users of the sites.

Infomediaries:

The sites that provide information about industries and their companies and employees are called infomediaries.

Who are the information seekers??

Banks, insurance companies, credit providers, peer companies, investment companies, money lenders all are different sorts of categories of the users of this information.

Banks need to know the sound background of the company or the person who has submitted a loan request with it to decide for the refusal or acceptance of request.

Insurance companies need statistics to attract potential customers to get them into medical, life, vehicle etc. insurance.

  

Companies need to know the EPS( earning per share), DPS( dividend per share), credit rating, capital structure, leverage , sale ratio, interest ratio and other information of its peer companies in order to compare itself with them to assist in decision making and planning.

Credit providers, moneylenders, investment companies etc. all need to know the credit position of a company before lending it with money or making any sort of investment in it. The decision to purchase or sell the shares of a company are totally relied and made after having such crucial information.

B2B for B2Bs’:

All those businesses involved in b2b need an easy and integrated software that can connect them with other businesses electronically in order to be able to work together smoothly with least interferences, eventually resulting in an overall performance boost.

Many companies offer software that include tools, templates,  electronic forms, common database, customized user interfaces etc. , in order to help businesses create their own b2b websites that may even offer  an intranet to connect the company not even externally but internally within its various departments and branches.

B2B is growing so fast that it has outweighed B2C ( business to consumers) and e-tailing (retailing over internet) and is forecast-ed to earn more revenues in future.

Good Luck B2B.