The B2B2C model, short for “business-to-business-to-consumer” model, is a new business framework where a company sells products or services to consumers in partnership with another company. It is a sort of combination of two older business models—business-to-business (B2B), where a company sells to other companies, and business-to-consumer (B2C), where a company sells to consumers.
In the B2B2C model, Company A doesn’t directly sell its products and services to consumers. Instead, it sells them to Company B, which then resells them to end users. In most cases, the organizations that adopt the B2B2C model initially employed the B2B framework.
- How Does the B2B2C Model Differ from a Channel Partnership?
- Why Are B2B Companies Shifting to the B2B2C Model?
- How Does the B2B2C Model Work?
- Can All B2B Companies Adopt the B2B2C Model?
- What Are Some Popular Examples of B2B2C Partnerships?
- Key Takeaways
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The B2B2C model may sound similar to a channel partnership, but it actually differs.
How Does the B2B2C Model Differ from a Channel Partnership?
In the B2B2C model, the company that resells the products and services of the source company doesn’t rebrand them. Channel partners, meanwhile, can and typically rebrand the products and services from the source company before they’re sold to consumers.
Why Are B2B Companies Shifting to the B2B2C Model?
The B2B2C model gained mainstream adoption around the time of the COVID-19 pandemic. Several companies shifted to the model to address the rise in remote work and enable scalability.
The pandemic changed the way consumers bought products and services. It mainly made home delivery services, which used to be a luxury, a norm. That presented real business opportunities that only the B2B2C model could address.
It’s also worth noting that companies can’t excel in every area. Sometimes, trying so hard to be excellent in sales and marketing means sacrificing quality. Several companies left sales and marketing to partners to prioritize quality assurance, giving rise to the B2B2C model. By doing so, they can scale their business faster.
Note, though, that the B2B2C model will only work if the partners target the same consumer base.
How Does the B2B2C Model Work?
The B2B2C model involves three players—two companies and the consumers. In it, Company A is the product or service manufacturer. It builds up its brand by producing high-quality goods. Company B, meanwhile, strives to become a credible source of information about the best products and services available in the market. It also knows its target consumers very well.
For the B2B2C model to be effective, Company A’s target consumers must also be Company B’s. Only if they rely on what Company B says about goods will they trust it to buy Company A’s products and services.
Can All B2B Companies Adopt the B2B2C Model?
Shifting from the B2B to the B2B2C model isn’t easy. A primary requirement to do so is digital maturity. What does that mean?
An ideal candidate for the B2B2C model is a fully digitalized company, meaning it can readily sell online.
The products and services the company sells must also be general-purpose products and services. Niche and highly regulated goods like medical equipment aren’t ideal B2B2C products.
Finally, the company planning to adopt the B2B2C model must be willing to negotiate with potential partners. It must be willing to share as much information as possible about its target customers and provide enough credit and fair compensation to its chosen partner.
What Are Some Popular Examples of B2B2C Partnerships?
Many companies have taken the B2B2C route, and some have been relatively successful, including:
- Instacart and grocery stores: Grocery stores that want to sell online but don’t have the technical expertise and resources to do so can partner with Instacart to instantly take the e-commerce route without having to invest vast sums of money on building the necessary infrastructure or hiring technical experts.
- Affirm and retailers: Even retailers that already sell online can’t always offer customers goods on credit. Affirm can help them quickly make the buy now, pay later option available to those who want it.
- Amazon and sellers: Any manufacturer can start selling goods on Amazon and even rely on its distribution platform.
While not all B2B companies can take the B2B2C model route, getting there can be their goal. The model can let them grow their business without costing as much as building their own infrastructure and hiring the best employees would.
- The B2B2C model is a new business framework where a company sells products or services to consumers in partnership with another company. It combines the B2B and B2C models.
- The B2B2C model differs from a channel partnership in that no product and service rebranding happens in the B2B2C model.
- In the B2B2C model, the company that sells products and services doesn’t directly deal with consumers. It leaves marketing and sales to its partner.