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The blooming age of digital selling has given birth to new business models such as B2B2C eCommerce, DTC (direct-to-customer), besides traditional ones like B2B (business-to-business) and B2C (business-to-customers). Embracing these new models gives businesses more choices to promote and distribute their products so that they can grow significantly in today’s competitive market.
This article explores B2B2C eCommerce in the most simple way, as well as clarifies the blurred lines between B2B2C and other business models.
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What is B2B2C eCommerce?
B2B2C is short for business-to-business-to-customer. The business model implies a collaboration between two businesses (B2B) to offer special products and services to customers (2C).
For example, a grocery store integrates with a tech company to offer grocery delivery and pickup services. The grocery mart takes charge of its products, while the app company does all required services.
Also, for the B2B2C business model, customers are well aware of the business collaboration and where the products come from. This differentiates the B2B2C eCommerce model from white labeling and B2B.
Continuing with the grocery example, shoppers know that they are buying groceries from Mart A and use delivery service from Company B.
How B2B2C Works?
B2B2C is said to involve three parties: the main brand (or supplier), an intermediary, and an end customer. Here’s how it works:
- The supplier creates the product or service, and then partners with a B2B intermediary-retail platform, marketplace, or service aggregator.
- The products or services are then advertised directly to consumers without routing through the intermediary platform. Branding appears usually under the name of the intermediary, and main function is to touch the consumers at the essential number of touch points.
- The first “B” (the supplier) fixes the price; the second “B” (the intermediary) takes a cut on every sale.
There are different ways by which a B2B2C partnership can be established, according to the different industries of both companies:
- B2B2C Retail: An intermediary buys products from another business and sells them directly to customers through its channels. In this model, everything about order fulfillment and customer care is handled by the retailer. For example, Amazon is a B2B2C retailer as it allows different manufacturers to put products in its platform, and then sells those products to ultimate consumers.
- B2B2C Service: The intermediary acts as a service provider to a retailer providing conveniences such as order fulfillment and delivery. Take food delivery services like Uber Eats, for example, which are intermediaries between the restaurants and the end clients, where all disputes will be resolved with the customers contacting the intermediary’s customer service.
- B2B2C Financing: The intermediary handles the transaction with the customer by managing the payment options and processing the payment itself. Many of the online payment platforms, such as PayPal and Stripe, or the Buy Now, Pay Later companies like Affirm, would be the marketplace examples for this model.
B2B2C eCommerce Business Model examples
1. Affirm & Casper
- Business 1: Casper. Casper sells mattresses, bed frames, etc to help people sleep better.
- Business 2: Affirm. Affirm enables customers to pay for expensive products in installments over weeks and months.
As mattresses and bedding cost a fortune, people have lots of hesitation when considering buying. Thus, the “buy now, pay later” pricing model Affirm offers can help Casper increase sales significantly.
In this collaboration, Casper’s customers know that they are using a financial service from Affirm. The information is stated clearly on Casper’s website.
You can also see Casper’s product on Affirm website. This means Casper can reach Affirm’s customers to sell their products.
2. Grocery stores + Instacart
- Company 1: grocery stores in the US and Canada
- Company 2: Instacart. Instacart offers prompt groceries delivery and pickup services so that people can receive or pick up their orders on the same day they are placed.
While groceries need to be fresh when people buy them, shipping can take days to fulfill. Therefore, traditionally, they would need to go to grocery stores a few times a week.
Besides, grocery delivery is a complicated service. It requires shipper management, technological expertise, and a good customer success team.
To solve the two pain points, instead of trying to do everything on their own, the grocery stores have borrowed the hand of Instacart – a tech startup.
As a result, the partnership helps grocery stores cut the inconvenience of buying groceries and sell their foods to more customers
3. OpenTable and local restaurants
- Company 1: local restaurants
- Company 2: Opentable. Opentable allows people to conveniently find restaurants in every country, read reviews, and reserve a slot.
Since most local restaurants do not have experience in international marketing, they can not reach travelers who are thrilled to try new cuisines and often willing to pay. Opentable, on the other hand, facilitates a convenient online booking website where international travelers can browse for options, read reviews and take action.
Opentable has helped local restaurants connect better with worldwide travelers and generate more revenues.
Examples of B2B2C partnerships
Retail Marketplaces
Think Amazon, for example. It is a B2B2C retail marketplace, and that allows manufacturers and brands to reach a wider consumer audience through its marketplace. Such businesses usually list their products, manage transactions, and sometimes warehousing and shipping.
While third-party sellers get direct access of Amazon’s countless consumers, end users get to enjoy faster shipping and 24/7 customer care services for a wide variety of products. In 2023, Amazon’s marketplace held an 83.5 percent share of Amazon’s net sales, which consisted mainly of vendors selling $480 billion worth of merchandise.
Food Delivery Services
- Instacart: Instacart has arrangements with grocery stores and other retailers to support online ordering and delivery services. In other words, Instacart has an eCommerce site in which customers can shop from stores but Instacart handles the shopping and delivery. This somewhat combines customer service and gives the stores a good perception.
- Uber Eats: Uber Eats operates as the intermediary that services restaurants to customers so they can both enjoy meals through delivery. They sell their delivery services to restaurants and shops, which in turn sell these services to customers.
App Stores
The main B2B2C marketplaces for software developers are Apple’s App Store and Google’s Play Store, where software developers can market their applications. These platforms allow developers to reach a wider audience and ensure a non-paid user experience. The app stores are also generating revenues periodically from such sales and allow developers access to millions of potential customers around the globe.
Financing Platforms
- Affirm: Affirm partners with eCommerce retailers, like UPLIFT Desk, to offer customers the option of monthly payments. Customers know they are paying Affirm, but the retailer enjoys the brand lift of the seamless integration.
- Katapult: Katapult is another financing service that partners with businesses to provide payment options on their product pages. When a consumer makes a purchase, Katapult pays the business and the shopper pays Katapult in installments.
Online payment platforms, such as PayPal and Stripe, provide processing services to businesses and enable consumers to make online purchases securely.
Travel Services
Kayak is a travel booking site that lists hotels, flights, cars, and experiences. Customers can book these services through Kayak’s platform. The companies providing the accommodations get a wider audience, while consumers benefit from side-by-side pricing comparisons.
In these B2B2C relationships, the intermediary plays a crucial role in connecting suppliers to consumers, often providing essential services like customer service, delivery, or payment processing.
Differentiating B2B2C from other eCommerce models
This table together with such explanations clearly differentiates B2B from B2C, D2C and B2B2C eCommerce business models and explains how they are recognized within the context of their unique operational frameworks.
| Feature | B2B2C (Business-to-Business-to-Consumer) | B2B (Business-to-Business) | B2C (Business-to-Consumer) | D2C (Direct-to-Consumer) | Channel Partnerships |
| Definition | Two businesses partner to provide goods/services to the same end consumer | A business sells products/services to another business | A business sells products/services directly to consumers | A manufacturer/brand sells directly to end consumers | A company partners with a producer to market and sell products, often rebranding them |
| Transaction | Business to Business to Consumer | Business to Business | Business to Consumer | Business to Consumer | Business to Business, then to Consumer |
| Customer | End consumers | Other businesses | End consumers | End consumers | End consumers, potentially unaware of the original producer |
| Intermediary | Yes, there is an intermediary between the supplier and the consumer. | Typically none | Typically none | Typically none | Yes, but often rebrands or white labels products |
| Branding | The end customer is aware of both businesses’ brands. | Business A sells to Business B, often with no branding overlap. | The business sells directly to consumers using its own brand. | Brand sells directly to consumers using its own brand. | Often involves re-branding/white labeling by the channel partner |
| Supply Chain | Streamlined through partnerships between two businesses. | Business to Business | Business to Consumer | Direct from manufacturer to consumer | Often involves a company reselling goods under their brand |
| Examples | Amazon, Instacart, Uber Eats, Affirm, app stores, online marketplaces | Software company selling to other businesses | Online store selling clothes to consumers | A brand selling its products directly through its website | Store brands like Kirkwood (Costco) or 365 (Whole Foods) |
| Control of Customer Relationship | Shared between the two partner businesses | Full control by the business. | Full control by the business. | Full control by the business. | Channel partner typically controls customer relationship and experience, not the original producer |
| Typical Middleman Role | Provides a service to the supplier and products to the consumer, and often handles customer service. | Typically none; direct relationship between businesses. | Typically none; direct relationship with consumers. | Typically none; direct relationship with consumers. | A reseller or marketer, using white label/rebranded products. |
B2B2C advantages and disadvantages
The B2B2C eCommerce business model can shed new light on your current business and open up more opportunities to grow.
However, not every business is successful with B2B2C eCommerce. A deeper understanding of its benefits and drawbacks will help you make a good decision.
The benefits
Improve product marketability
While products remain the star of every business, in this competitive world nowadays, add-on values such as convenience, guarantee, etc do matter.
Thus, integrating with another business that offers these values can increase your product charm in the market, which inevitably leads to a conversion boost.
Maximize each other’s strengths
To stand out, businesses must strive to deliver something others can’t. Especially for small companies, they should avoid being a “Jack-of-all-trades” and be specialized in a less-competitive niche.
Every business has something they are especially good at while being left behind in other fields. Thus, it’s good to collaborate with another business whose expertise compensates for their drawbacks and vice versa.
Two are better than one. By taking good advantage of each other’s strengths, companies can innovate and grow.
Reach more customers
Companies spend years accumulating their customers, some of them are loyal fans. If two businesses in the B2B2C model have the same target customers, they can promote their products/ services to each other’s customer base.
While it takes lots of effort to acquire new customers, those who are dedicated to your partner’s business will be more likely to trust your business and purchase from you.
Reduce costs
Using a service offered by another business can reduce overhead costs. For example, applying an app delivery service in a business’s eCommerce system cuts the cost of logistics and paying shippers.
Moreover, building something new often takes lots of money and human resources. The B2B2C partnership lets one business use an already-established system of the other, so they do not have to develop one from scratch.
Increase brand recognition & reliability
If the two businesses have already had an established position in their niches, the B2B2C collaboration can boost the two brands’ overall credibility.
For instance, if a furniture eCommerce business shakes hands with a famous financial company, its customers will feel safer entrusting their personal information.
The drawbacks
Lower profit
When joining Amazon, vendors must pay Amazon a fee of at least $0.99/an item based on their business size, in return for using Amazon’s facility, customer base, shipping service, etc.
This is similar to any other popular B2B2C eCommerce platforms, such as Booking.com, Airbnbs, etc.
Working in the B2B2C eCommerce model means a business must share a part of their initial profits with another business so that they can win more revenues in the long term. ECommerce store owners, therefore, need to make careful calculations to decide if the collaboration is worth it, and how they can maximize their sales with it.
Not suitable for all products
Whereas B2B2C seems to be a trendy move for B2B businesses, not all B2B brands benefit from this. Some products, such as industrial equipment or healthcare supply, are unique to B2B selling. It’s hard for companies selling these products to transform into a B2B2C business.
Marketing challenges
There’re lots of restrictions on marketing in B2B2C marketplaces such as Amazon or Alibaba.
Besides not being able to collect their own customer data, small vendors could not also run ads on the marketplaces, nor can they freely decorate their stores as they want.
This lack of autonomy is why many merchants decide to run an independent eCommerce website along with their marketplace store.
Moreover, for those who want to establish a B2B2C marketplace, a booking service, or a delivery app of their own, they need to attract both business partners and end customers at the same time.
This doubles the marketing efforts and may cause lots of hassle if digital marketing is not their strength.
Rely greatly on negotiation ability
For a successful B2B2C business, negotiation & communication with your business partner are vital. From controls over customer base, profit percentages to cross-business teamwork, everything must be carefully discussed and implemented in a win-win manner.
Might affect the brand’s credibility
An unhappy customer is never a good thing, no matter whose fault it is: your brand or your partner’s brand.
Same as how a brand’s reliability can grow by joining hands with another reputable brand, if your B2B2C partner is incompetent, they can also negatively affect your business image.
Thus, a business must examine its partner closely before signing any partnership agreements.
B2B2C eCommerce platforms
B2B2C businesses may have different shapes and sizes, for example, they may be:
- A small business that wants to collaborate with a tech company to improve their product services and reach more customers
- A tech start-up that wants to provide services for businesses
- A new marketplace, booking platform, etc
The best B2B2C eCommerce platforms must provide sufficient features and facilities for these different demands. In general, they must meet these criteria:
- Having features for both B2B and B2C
- Can be highly-customized
- Easy to integrate with a new app, new partner, new system for data exchange.
As open-source eCommerce platforms are more flexible than SaaS (software as a service) solutions, B2B2C eCommerce businesses may find them more suitable.
Here are our top-picked platforms for B2B2C eCommerce:
1. Magento (now Adobe Commerce)
Magento is the most popular open-source eCommerce platform, which enables high customizability and integrability. Merchants can get full access to its source code to modify any features to fit their needs.
The platform’s open-source version is free to download, so it’s suitable for tech-driven companies to get started.
Because of its rich features and its robust infrastructure, Magento is great for enterprise businesses as well as those who plan to scale up fast.
2. Spryker
Besides being open-source, Spryker embraces the composable structure, which lets users handpick each feature they need for their websites, no matter if it is for B2B, B2C, or marketplace.
Moreover, it is built with headless architecture & a strong focus on API. To speak in simpler terms, the platform is technology-driven, super flexible that can handle any unique integrations.
3. BigCommerce
Unlike Magento or Spryker, BigCommerce is a SaaS platform, which can not offer the same high customizability as open-source options. However, it is still considered a decent eCommerce platform for versatility, which can satisfy the needs of small businesses.
On top of that, BigCommerce comes with ready-made features so that users can build websites without a single line of code. Also, new merchants only need to pay from $29.99/ month to create a store. Thus, it is an excellent choice for starters with a limited budget.
>>See more: Magento vs BigCommerce
FAQs
What is B2B2C SAAS?
B2B2C SaaS, or Business-to-Business-to-Consumer Software as a Service, is a hybrid business model that combines elements of both B2B (Business-to-Business) and B2C (Business-to-Consumer) eCommerce. In this model, a business provides software services to another business, which then offers those services to end consumers.
What is B2B2C marketing?
B2B2C marketing, short for business-to-business-to-consumer marketing, is a strategy that involves a manufacturer or service provider selling products or services to a business, which then sells those offerings to end consumers. This model allows companies to leverage partnerships to reach broader audiences and enhance customer experiences.
Examples of B2B2C Marketing:
- Grocery Stores and Delivery Services: Supermarkets partner with online grocery delivery services to offer consumers the convenience of ordering groceries online.
- App Stores: Software developers create apps that are distributed through app stores, allowing consumers easy access while benefiting from the store’s marketing reach.
What is a B2B2C social media platform?
A B2B2C social media platform is a specialized type of social media that facilitates interactions between businesses and consumers through an intermediary business. Facebook marketplace, Instagram shopping, Linkedin are typical examples of B2B2C social media platforms.
Is Amazon B2B2C?
Yes, Amazon operates under the B2B2C (Business-to-Business-to-Consumer) model. In this model, Amazon acts as an intermediary between various suppliers (businesses) and end consumers.
Wrapping up
B2B2C is an innovative eCommerce business model that helps businesses reach more customers while lowering acquisition costs. If you want to find a successful B2B2C business, find nowhere but major marketplaces, booking & delivery apps, as well as small businesses associated with them.
That being said, it is not a fluffy road for any business to take and many challenges can be expected.
We hope the article has explained everything about B2B2C eCommerce well so that you can make an informed decision to start or transform your business.
