Full Form of B2B
Business to Business
B2B Full Form is Business to Business. B2B is a circumstance in which one enterprise engages in a commercial transaction with another enterprise. This situation generally occurs under the following cases: (1) Where an enterprise is sourcing materials required for the production process. For example, a food manufacturer buying sugar. (2) Where an enterprise requires services of another enterprise for operational purposes. For example, a food manufacturer involving an accounting firm for the purposes of auditing their finances. (3) Where an enterprise re-sells services and goods that are produced by others. For example, a retailer purchasing the end product from a food manufacturer.
B2B is often compared with Business to Consumer (abbreviated as B2C). In B2B, the parties generally have comparable negotiating power and in the case where they do not, each party generally involves legal counsel and professional staff in the negotiation process. On the other hand, the B2C is characterized by implications of Information symmetry. Such implications are economic in nature. Additionally, the overall volume of transactions under B2B model is higher than that of B2C transactions.
The main reason is that in a normal supply chain, there shall be various B2B transactions engaging raw materials or subcomponents and just one B2C transaction. We can take up a simple example for greater understanding: a manufacturer of automobiles enters into various B2B transactions such as glass for windscreens, buying tires, rubber hoses for the automobiles, etc. The final transaction is essentially a single B2C transaction.