B2B vs B2C Ecommerce: What’s The Difference?

b2bvsb2c

As with all things that intersect technology and commerce, business-to-business (B2B) vs. business-to-consumer (B2C) ecommerce is a fight loaded with complexity:

  • Which business model is more lucrative?
  • Can a company serve both markets?
  • What about retention and customer lifetime value?
  • Are channels and purchase decisions fundamentally different?

With these questions in mind, let’s end the rivalry, unearth the differences between B2B and B2C ecommerce, and bring to light the ways they’re actually much the same.

What’s the difference between B2B and B2C ecommerce?

  1. Breadth of audience
  2. Average (and negotiable) prices
  3. More people involved in the decision-making process
  4. Pressure to produce ROI
  5. Ecommerce messaging
  6. Payment options
  7. Retention and repeat orders

1. Breadth of audience

One of the primary differences between B2C and B2B is the scale of their audiences. B2C brands often strive to reach a broadly defined group of people—sports fans, fitness-minded moms, millennials who are into music, or kids in general.

These are large demographic and psychographic groups that each demand their own customer journey map:

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“The biggest difference between B2B and B2C is your target audience and the size of that target audience,” says Brad Hall, co-founder and CEO of SONU Sleep. “For example, B2C is appealing more so to the masses, and to a greater demographic of people with different likes, dislikes, and purchasing habits.

“Alternatively, B2B is presenting to a smaller audience who typically share a common goal, and therefore require more tailored sales and marketing strategies. However, the advantage of B2C is that there’s many more fish to bait, and where one doesn’t catch, the others will.”

B2B ecommerce audiences are a lot more narrow. There’s usually a set number of buyers, with a pretty straightforward profile. For example, a B2B brand might only target ad agency owners or finance VPs at tech startups.

While you might think this would limit the potential of B2B online sales, the opposite is actually true. Revenue from online B2C transactions in the US reached $875 billion in 2022. The B2B ecommerce market, however, accounted for $1.8 trillion during the same period.

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2. Average (and negotiable) prices

A B2C ecommerce brand might need to reach and sell to hundreds of thousands of people to crack their first million in sales because they’re likely selling products at a lower rate. In B2B ecommerce, it’s common for brands to have fewer than a couple hundred customers but still generate millions (sometimes billions) of dollars in revenue.

The average order value is one of the reasons B2B is taking off. Founder Maria Boustead says that on Po Campo’s B2C site, “most people just buy one or two things. On the B2B, retailers order 15 to 25 items at once.”

B2B businesses typically sell more complex products that are often custom-tailored to the buyer’s specific needs. These products are also usually more expensive than those sold by B2C businesses. As a result, the average order value for a B2B ecommerce business is usually much higher than for a B2C business.”

—Brandon Chopp, digital manager for iHeartRaves

Of course, there are always outliers—B2B goods that cost only $20 and B2C goods with a price tag of $15,000. But across most industries, B2B ecommerce purchases are much higher in price.

B2B ecommerce purchases are also negotiable, whereas B2C customers pay the dollar price listed on your public-facing website (unless you’re running a promotion). Business customers use large value orders as a bargaining chip. Wholesalers get volume discounts. The more they buy, the cheaper each unit is to purchase.

B2B clients equate to a large percentage of our revenue, so if we were to land a B2B client, we actually make significantly more revenue than we do with 100 B2C clients.”

—Varun Sharma, co-founder of Laumière Gourmet Fruits

You’ll need an ecommerce platform like Shopify Plus to distinguish between the two. Display two online storefronts—one for B2C, and another password-protected one for B2B customers—to manage these differences in pricing, without investing into two back ends.

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As Michael Martocci, founder of SwagUp, says, “This can allow B2B companies to put more money into sales and marketing to acquire and expand customers versus a B2C company that has cart values that don’t justify those investments.”

3. More people involved in the decision-making process

Here’s what a B2C buyer sounds like when they’re ready to buy: Ching. Ching. Ching.

Here’s what a B2B buyer sounds like: “OK, I’m ready to share this with my manager, who’s going to pitch it to the senior direction team then pull in finance and legal. I wonder if we should run it by the marketing team, too?”

When the book The Challenger Customer was published in 2015, an average of 5.4 stakeholders were involved in the B2B buying process—and that number has since climbed to between six and 10. In addition, the authors of this must-read for B2B professionals found a clear correlation between the size of buying teams and the likelihood of a sale being successful:

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The idea here is simple: If you want to build a $100-million business, you can catch—i.e., sell to—10 million flies worth $10 each (think B2C) or hunt down 1,000 elephants worth $100,000 each (think B2B).

Here’s perhaps the most important point to take away: Your content—your About Us page, product pages, PDFs, demo videos, pitch decks, catalogs, and more—are going to be shared with at least six decision-makers within the organization.

What does that mean for your B2B operation? First, you need to invest as much into creating an optimal user experience as B2C brands do. From easily shareable content that shares how business customers can resell your products to post-purchase customer support, the buying decision for companies is vastly different from individual consumers.

This key difference between B2B and B2C ecommerce also means you need to ensure that when someone visits your site, they find reasons to trust your brand and believe you’re the best solution for their problem. That’s why it’s crucial to optimize your user experience and clearly communicate your brand story.

Most often, B2C ecommerce transactions have a single-step buying process that results in a shorter sales cycle. For B2B transactions, the buying process is almost always multi-step, and involves more communication than a B2C. This results in a longer sales cycle overall.”

—Kevin Callahan, co-founder of Flatline Van Co.

4. Pressure to produce ROI

Individual customers purchase products for themselves. Granted, while they don’t want any purchase to be a waste of money, it’s less of an issue for an individual consumer to make one single purchase. With B2B purchases, however, customers place a multi-unit order they need to resell and profit on. There’s much more pressure to make the right decision.

As Brian Folmer, founder of FirstLook, says, “B2C customers routinely buy products of all types, constantly testing things out and, in my cases, buying on a whim. Emotions are a bigger part of their consideration. How does this brand make me feel, and do I support their mission?”

However, Brian says the thought process behind a purchase changes with B2B ecommerce: “B2B customers on the other hand, are usually buying with a purpose in mind ahead of time. Not as many ‘this is fun’ type purchases. In that vein, a company making a purchase usually considers one of two things: Will this make us more money, or help us save money?

“It’s a bit more rudimentary compared to B2C buyers, though the purchases are usually much more expensive, which is why they try to leave emotion out.”

Much like B2C marketing, you’re proving the value of your product. The main difference in B2B ecommerce is proving the resale value of your inventory (high sell-through rates, good profit margins, or brand loyalty), rather than the benefits for the end consumer.

“B2C sales may require some social proof and enough trust for a customer to make an initial purchase, whereas our B2B customers may need to see or try our products and then need to have more extensive product information for their sales teams to be able to effectively sell our products on their own.” —Will Stewart, owner of Cedar Spring Recreation

5. Ecommerce messaging

Speaking of marketing materials, another key difference between B2C and B2B ecommerce is the messaging you’re using to attract and convert customers.

Take it from Maria Boustead, founder of Po Campo, a bike accessories company that sells to both B2B and B2C customers. Maria says that across the two platforms, “The product descriptions are somewhat different, as we are talking to different people.

“For example, on the B2B, we say who the product is intended for (i.e., commuters or e-bike riders), so they can pick the right products for their customers.”

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Caption: PoCampo’s B2B product description focuses on the product’s sell-through rate.

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Caption: PoCampo’s B2C product description focuses on the benefits of using the product.

B2B customers also want different information from B2C customers. Brandon Chopp, digital manager for iHeartRaves, says, “Since B2B buyers are typically looking for more complex products, it’s important to provide detailed product information on your website. This includes things like specs, dimensions, application examples, and user manuals.

“The more information you can provide, the better equipped buyers will be to make a purchasing decision.”

Ease this pain point when selling B2B through ecommerce marketing messaging. You could:

  • Share case studies of brands that have bought your products and resold them at a higher margin
  • Talk about how, for some retailers, your products have the highest sell-through rate in the store
  • Use social media to showcase user-generated content from happy customers other B2B buyers have resold to

6. Payment options

B2B and B2C ecommerce operations share one common goal: to get paid for the products they sell online. But the way in which customers prefer to pay for those goods differs based on the type of customer they are.

The most popular payment methods for B2C consumers are:

  • Digital wallets
  • Credit cards
  • Debit cards

When B2B buyers place online orders, however, the checkout process is fundamentally different from B2C. Businesses often opt for alternative payment methods such as bank transfer, and use a buy now, pay later model—such as net 15, 30, or 60—to pay for inventory once they’ve sold it themselves.

Credit card payments direct from checkout can still be relevant in the B2B sales process, but B2B orders can get quite large—and have long payment terms. Additional options like bank transfers, 30- (or even 60-) day invoices, and more are also useful to build into your wholesaling options.”

—Zac van Manen, digital growth manager at BA Creative

Shopify is a B2B ecommerce platform that allows you to accept B2B payment methods without creating an entirely new store. Get access to B2B Checkout, which allows business customers to view company-specific information—such as payment terms, preferred payment method, and wholesale discounts—each time they order.

7. Retention and repeat orders

B2B ecommerce has the advantage of default retention. Unlike B2C customers who replenish items once they’ve used a product (provided they enjoyed it), B2B buyers often need a consistent supply of inventory to resell in their own stores.

Take it from Bernie Schott, owner and CEO of REECH, who says, “REECH customers typically buy a yoga mat every one to two years max, but a studio that stocks REECH mats will typically purchase 10 every two months.”

Capitalize on this advantage with a B2B sales team that prioritizes delivering excellent customer service. Build partnerships and be forthcoming with marketing ideas, upcoming trends, or sneak peaks are new products you’re about to launch.

Similarly, for buyers that prefer a self-serve approach, use a B2B ecommerce platform that makes reordering easy. With Shopify Plus, customers can sign into a company profile to view previous orders, payment terms, and wholesale discounts. They’re able to replenish their own stock within just a few clicks.

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Do B2C and B2B ecommerce have any similarities?

The differences between B2B and B2C ecommerce are significant. But while the differences result in marketers and owners embracing different mindsets, philosophies, and strategic approaches, B2B and B2C ecommerce have a few similarities too.

Multi-channel matters

Despite the differences between B2C and B2C customers, some 80% of B2B buyers expect a buying experience like that of an individual customer.

The vast majority of B2C and B2B buyers spend their time on similar channels. They rely on YouTube for instructional content and networks like Twitter, LinkedIn, and Facebook for social engagement. Just as a university student might check Facebook to learn about their classmates, a C-suite executive uses Facebook to share photos of their kid.

The use case may be different, but both parties can be found in the same place.

According to Forrester, 59% of buyers prefer to do research online instead of interacting with a salesperson because reps push their sales agendas rather than solving the problem. It’s likely that many of these buyers start with Google but—just like their B2C counterparts—multichannel browsing and buying habits dominate.

In other words: don’t assume that just because your audience is B2B you can ignore Facebook or even Instagram. The B2B brands that embrace these channels while everyone else ignores them are likely to be the ones that capitalize on cheaper reach and less competition.

People are people

One of the biggest myths about reaching a B2B audience versus a B2C one involves the person on the other end of the transaction. For far too long, organizations have assumed that a B2B buyer is a completely different type of person than a B2C buyer.

Whether they’re a university student or Fortune 500 exec, they’re still human. And all humans are made of the same neurons and chemicals that trigger emotions and drive us to behave a certain way.

Thus, there’s a great opportunity for B2B marketers to leverage psychology to connect with their target audience. Understand the value of highlighting benefits over features. Realize the role that fear can play when a buyer is deciding between two similar solutions.

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Source

Offer B2C and B2B ecommerce through one back end

The differences between B2C and B2B ecommerce are stark. You’ll need to personalize the shopping experience based on common traits each persona shares.

The good news? With B2B on Shopify, you can operate two online storefronts from the same back end—no switching tools or expensive software needed.

“One of the advantages of Shopify’s B2B tools is that they mean that B2C and B2B can run from the same platform,” says Zac van Manen, digital growth manager at BA Creative.

“This is a huge advantage for merchants, as the differences between the two different kinds of sales channels—aside from length of lead time, volume, and gross margins—are not as different as you’d expect. After all: you’re still selling to a person on the other end of the potential transaction.”

Need help distinguishing between B2C and B2B customers? Shopify Plus has decades of combined experience, plus a network of Plus Partners, to help make both operations a success.

About the author

Elise Dopson

Elise Dopson is a freelance writer for leading B2B SaaS companies. She teaches everything she knows through Peak Freelance.