Definition

B2B (Business2Business or Business-to-Business)

On the Internet, B2B (business-to-business), also known as e-biz, is the exchange of products, services, or information between businesses rather than between businesses and consumers. Although early interest centered on the growth of retailing on the Internet (sometimes called e-tailing), forecasts are that B2B revenue will far exceed business-to-consumers (B2C) revenue in the near future. According to studies published in early 2000, the money volume of B2B exceeds that of e-tailing by 10 to 1. Over the next five years, B2B is expected to have a compound annual growth of 41%. The Gartner Group estimates B2B revenue worldwide to be $7.29 trillion dollars by 2004. In early 2000, the volume of investment in B2B by venture capitalists was reported to be accelerating sharply although profitable B2B sites were not yet easy to find.

B2B Web sites can be sorted into:

  • Company Web sites, since the target audience for many company Web sites is other companies and their employees. Company sites can be thought of as round-the-clock mini-trade exhibits. Sometimes a company Web site serves as the entrance to an exclusive extranet available only to customers or registered site users. Some company Web sites sell directly from the site, effectively e-tailing to other businesses.
  • Product supply and procurement exchanges, where a company purchasing agent can shop for supplies from vendors, request proposals, and, in some cases, bid to make a purchase at a desired price. Sometimes referred to as e-procurement sites, some serve a range of industries and others focus on a niche market.
  • Specialized or vertical industry portals which provide a "subWeb" of information, product listings, discussion groups, and other features. These vertical portal sites have a broader purpose than the procurement sites (although they may also support buying and selling).
  • Brokering sites that act as an intermediary between someone wanting a product or service and potential providers. Equipment leasing is an example.
  • Information sites (sometimes known as infomediary), which provide information about a particular industry for its companies and their employees. These include specialized search sites and trade and industry standards organization sites.

Many B2B sites may seem to fall into more than one of these groups. Models for B2B sites are still evolving.

Another type of B2B enterprise is software for building B2B Web sites, including site building tools and templates, database, and methodologies as well as transaction software.

B2B is e-commerce between businesses. An earlier and much more limited kind of online B2B prior to the Internet was Electronic Data Interchange (EDI), which is still widely used.

Contributor(s): Paula Jones
This was last updated in November 2010
Posted by: Margaret Rouse

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