B2B stands for “Business-to-Business”. This is a business that primarily sells products or services to other businesses rather than to individual consumers. These businesses cater to the needs of other companies, helping them solve problems such as operations, tech, manufacturing, marketing and so on.
Here’s an example of a B2B business:
ABC Office Supplies is a company that sells office equipment to other businesses. They offer a wide range of products such as stationery, desks, chairs, printers, and more.
Instead of targeting individual consumers, ABC focuses on establishing relationships with corporate clients, small businesses, schools, universities, and government agencies.
Because ABC offers its products in bulk they can customize their pricing and services to better cater to the needs of their business customers.
Key Takeaway:
The B2B model would typically have a higher AOV and CLV compared to D2C. However, it can be a capital intensive model to start, and your always at risk of loosing a contract with a client, which can be problematic if your revenue mostly comes from a few big clients. This is why diversification is important.
