In this article
Talk to our experts- B2B2C
- B2B2C, short for business-to-business-to-consumer, is a commerce model in which one company sells a product or service to another company, which uses it to sell its own products or services to end consumers. Both brands take part in the transaction, so the consumer knows both are involved. A delivery platform working with local stores is a common example.
Also called: business-to-business-to-consumer
How it works
As Shopify defines it, B2B2C is a business model in which one company sells a product or service to another company, and that product or service enables the second company to better sell its own products or services to end consumers. Shopify adds that both brands participate in the transaction and that the consumer is aware of both brands' involvement.
There are three parties:
- Company A: provides a service, such as a tech platform or a financial product, that lets Company B make more sales.
- Company B: sells its own products or services to consumers through that service.
- The consumer: buys from Company B and sees both brands in the process.
Shopify's example is a reservation platform that sells its software to restaurants. The restaurants use it to reach diners and take reservations, and both brands are visibly part of the process from the diner's point of view.
B2B2C vs. B2B
Shopify places the big difference between B2B2C and traditional B2B in customer ownership. In a B2B2C arrangement, both partners share customers. In a traditional B2B model, only the second company interacts directly with customers.
Shopify also separates B2B2C from a channel partnership, in which a brand sells its products to a retailer for resale. In B2B2C, both business partners have direct access to the end consumer. Shopify describes direct-to-consumer (DTC) as a third pattern: it cuts out the retailer and sells directly to consumers without any intermediaries.
Advantages and disadvantages
Shopify's guide lists advantages and disadvantages for a brand that partners with a B2B2C company, including these:
- Reach more customers: the brand gains access to the partner's customer base and a new discovery channel.
- Offer customers convenience: the result is often a faster, easier shopping experience for consumers.
- Slimmer margins: partnering often means sharing revenue, for example a subscription fee and a commission on sales.
- Differentiation and customer experience: the brand is one of many on the partner's platform, and a poor experience with the partner can reflect back on the brand.
Example
A specialty food producer sells through a grocery delivery platform. A consumer orders $40.00 of its products in the platform's app. The 15% commission here is a hypothetical rate for illustration only; Shopify gives no rate. At 15%, the platform keeps $40.00 x 0.15 = $6.00 and the producer receives $40.00 - $6.00 = $34.00. The consumer sees both brands: the platform that delivered the order and the producer whose products arrived.
On Shopify
Shopify B2B is available on the Basic, Grow, Advanced and Shopify Plus plans. You can use one store for both B2B and direct-to-consumer (D2C) sales, or create a separate B2B-only store.
- Blended store: a single Shopify store that's used for both B2B and D2C customers. All products are available to both by default, products and pricing can be customized using catalogs assigned to B2B markets, and inventory is shared across B2B and D2C orders.
- Dedicated store: a separate Shopify store that's used only for B2B customers.
Shopify advises making this decision carefully, as it's not easy to change at a later time.
How Uncap helps
A related choice for manufacturers is selling to businesses and to consumers at the same time. Uncap's guide to Shopify wholesale vs retail starts there. Most manufacturers and distributors that come to Shopify are not choosing between wholesale and retail; they are already doing both and trying to figure out whether one store can hold them. One Shopify store can serve both wholesale B2B buyers and direct-to-consumer retail shoppers, and the login state of the visitor determines which pricing, payment terms and checkout experience they see.
Sources
Frequently asked questions
What is meant by B2B2C?
B2B2C means business-to-business-to-consumer. One company sells a product or service to another company, which uses it to sell to end consumers, and both brands take part in the transaction the consumer sees.
What are examples of B2B2C?
Common B2B2C examples are grocery and food delivery platforms that partner with stores and restaurants, and reservation platforms that sell software to restaurants. In each case the platform and the merchant both serve the same consumer, and the consumer sees both brands.
What are the differences between B2B, B2C, and D2C business models?
B2B sells to other businesses. Traditional B2C sells to consumers through retailers, while direct-to-consumer (D2C) cuts out the retailer and sells directly to consumers. In B2B2C, one business sells a product or service to another business that serves the consumer, and both businesses share the customer.
Is Shopify a B2B2C company?
Shopify says that in some respects it is, through Shop Pay and the Shop app: shoppers recognize and interact directly with Shopify's services while shopping at individual merchant stores, creating a shared customer relationship between Shopify and the merchants.
