Are you an entrepreneur deciding on a business model for your startup? Wondering whether to sell B2B products or B2C products? Want to hone your sales craft and learn more about customer needs?
Whatever brought you here to this article, welcome. Today I’ll take time to distinguish some finer details between B2B vs B2C sales. At the end of this article, you’ll better understand the sales role, how B2B and B2C differ, and what elements you can pull in to enhance your processes.
What is B2B Sales?
B2B salespeople have a number of decision-makers that they must get a “yes” from before making a sale. Business buyers could include executives, CEOs, boards of directors, or even teams that will be using your product, like the accounting department or marketing team.
B2B sales typically provide a service or supply base products for other businesses to consume or use to create their own products. Here are a few examples of B2B sales models:
Supply Sales
If your business has a preferred partner for purchasing office printer paper or employee uniforms, then you’ve experienced B2B supply sales.
Wholesalers provide the items needed for a business to get their job done. For example, a baker requires a mixer, pans, and an oven to mix ingredients and bake their treats; then needs display cases, to-go boxes, and stickers to display, package, and seal the baked goods. The consumer doesn’t purchase any of those items—they’re purchasing the end product: the cakes and cookies. All of these supplies can be purchased through a food service supplier.
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Distribution Sales
Distribution sales involve an intermediary that purchases products at a discounted rate, then sells them at full price to the end consumer. The intermediary benefits from not having to build or manufacture the product, while still collecting a profit. An example of a distributed sales model would include grocery stores, who buy in bulk from bakeries, farms, canning, and manufacturing plants, then sell at full price to consumers.
Service Sales
Instead of providing a tangible product that businesses need or resell, B2B service sales provide other businesses with services to help them get their work done. This includes both physical/in-person services and online/digitally provided services.
For example, a commercial car wash company that does interior and exterior cleaning of another company’s fleet vehicles provides a B2B service. Or, in a different aspect, a company that handles DTC Codes and telematics information for another company's fleet also provides a B2B service.
A third and more straightforward example would be software as a service (SaaS), where businesses use a proven online platform to streamline their work processes. This would be a type of B2B eCommerce model.
What is B2C Sales?
Unlike B2B sales, B2C salespeople generally only have one decision-maker they must convince: the consumer themselves (unless they want to check-in with the wife first!).
While B2B sales relies more on personal relationships between sellers and B2B buyers, B2C sales usually sees individual customers going through a checkout process on their own. B2C marketing draws in new customers using influencers, content marketing, and other lead generation tactics built to attract the individual.(Looking to magnify your content marketing reach? Check out our AI article.)
Here are some of the types of businesses you'll see using a B2C model:
Direct Sellers
Apple, Samsung, and IKEA are all direct sellers. These brands create an emotional connection with their target customer, and work to create an incredible customer experience for each individual in their customer base. B2C companies like Apple rely on strong customer relationships and brand loyalty to create repeat sales.
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The direct sales model also includes big box stores like Walmart and Target. Stores like this often have their own brand of products, as well as being a retail seller for other brands, too. It’s ideal for big box stores to hire their own employees to complete deliveries, as they’re more likely to represent their brand in a positive light. This is just one of the many retail delivery best practices direct sellers will use to differentiate themselves from the competition. For even more insights and a comprehensive list of delivery driver apps these days, check out Upper's compiled list of the best apps for delivery drivers.
Online Intermediaries
If you’ve ever bought a book off of Amazon or booked a trip via Expedia, then you’ve bought from an online intermediary. These types of B2C businesses connect products and services from one business to consumers who are looking for them. Online intermediaries will often group many similar options together, making it easy for online consumers to type in a search term, scroll through the available options, and pick the product or service that meets their needs at the lowest price point.
Subscription Services
Subscription services, like your local gym or your streaming HBO access, offer recurring memberships (usually monthly or annually) for consumers to purchase and access otherwise restricted content. Subscription services are generally a fantastic money-maker for businesses, as many consumers will purchase a subscription and forget to use it. (No comment on failing to use the gym and instead staying home to binge-watch The Sopranos.)
And while some B2C companies do offer products for sale (like all of the apparel found in the gym “sweat shop,”) their primary function is to provide a service, so they’re still considered service-industry businesses.
B2B vs B2C Sales: How Do They Differ?
B2B and B2C sales differ in many ways throughout the sales process, with the B2B side often being a more extended and more formal process. Here, we differentiate the various differences between the two, including market size, leads per salesperson, sales cycle, user needs, the decision-making process, value per customer, and salesperson experience.
Total Market Size
One of the biggest differences between B2B and B2C sales is the market size. Because B2C sales targets the individual consumer, your market size can be massive depending on your product. According to Grand View Research, the global B2B e-commerce market in 2022 was worth $7,907.07 billion (or almost 8 trillion!) In contrast, it's estimated that the global B2C e-commerce market was worth "only" USD 4.34 billion in 2022.
Just to help put it in perspective, here’s a solid example. They say every man needs a good suit, right? Meanwhile, not every man needs a space suit for a trip to the International Space Station. It’s safe to say that your local formalwear company and NASA’s space suit manufacturers have a significantly different target audience.
Need help finding your focus? Read more about ideal customer profiles vs buyer personas.
Marketing & Value Per Customer
Another difference between B2B and B2C sales is the cost of marketing and the related value per customer–details found by doing a sales analysis of current processes. With such a wide market of potential customers, B2C businesses can afford to spend less on marketing than a B2B company could, and still attract tons of customers. With a more affordable product (think formal suit), value per customer will be low, but you’ll have lots of customers buying.
B2B customers, on the other hand, have a much smaller range of choices when buying a product. The small pool of competitors means B2B businesses have to out-market each other, making sure their own brand name stays at the top of the consumer’s mind. A significantly more expensive product (think space suit) will have an incredibly high value per customer, but only a handful of sales each year.
Identifying User Needs
Both B2B and B2C sales involve identifying and solving user needs. However in B2B sales, you (the salesperson) will experience a more formal identification procedure to thoroughly establish and understand the business’s current workflow, then provide recommendations using your product or service as the solution.
In B2C sales, the sales process is much simpler. The conversation is more personal and informal, often requiring no more than a half hour or so to find out what the customer is looking for, discuss your product, and make the sale.
Sales Cycle
In B2B sales, the sales cycle is a long process of establishing trust, building rapport, investigating needs, convincing the decision-maker of your product’s good fit, negotiating a price, closing a deal, and providing ongoing support. Add to this, your prospect’s internal decision-making and buying cycle timelines can vary, adding even more time to an already long ordeal. It’s a lot of work, but remember—the payoff on those large contracts just about always makes it worth it.
B2C sales is a much shorter sales cycle, usually involving low-effort inbound marketing strategies that bring the customer to you after they’ve already done a fair amount of research (and have done most of the work in convincing themselves that your product is the best option). From there, B2C sales reps simply have to take the sale the rest of the way. Most of the time, B2C customers have high levels of brand loyalty, making upselling, repeat purchases, and future referrals more common.
Stakeholders & Purchasing Decisions
Many business-to-business sales require the oversight or approval of internal stakeholders beyond the single point of contact you’ve been speaking to throughout your sales process. Purchasing decisions are often run through a series of decision-makers, and a single veto can cause the entire process to restart from the beginning or even be lost, right then and there.
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I learned this lesson the hard way many years ago, when I successfully closed a deal with a very high-level executive at a large enterprise. The big boss wants this to happen, it's done… right? Nope. I had failed to get other stakeholders involved, and even though they were much lower in the organizational hierarchy, they prevented this deal from going through.
Business-to-consumer sales are not the same. Instead, this more relaxed process typically involves no more than two people with final decision-making powers, and even that’s only common in large purchases like houses and cars. In most cases, after presenting your product or service, the consumer can make a final purchasing decision right then and there.
Number of Leads Per Salesperson
The average number of leads per salesperson, for both B2B and B2C sales, comes down to the size of the contracts being sold, the amount of work and touch points they require, and the length of the sales cycle.
In B2B sales, contracts are larger, touchpoints are frequent, and sales cycles are long. B2C sales experiences smaller contracts, infrequent touchpoints, and short sales cycles. For this reason, B2C salespeople can usually take on many more leads at a time than B2B salespeople.
Average Sales Team Experience
The size of the contracts and lengths of the sales cycle in B2B sales typically require more experienced salespeople who know how to exert confidence and authority, and handle sales objections gracefully so as not to lose an important sale. That said, there’s always an exception to the rule.
In B2C selling, lower contract values and more potential customers makes it easier to bring in new salespeople who can hone their skills without fear of losing a big deal due to their lack of experience. It helps that the B2C customer journey is less complex and, in some respects, more “self serve.” Learn more about how to train less-experienced sales teams.
Sales Tips for B2B & B2C Sales Professionals
Although many differences exist between the B2B sales model and the B2C sales model, some common ground also exists. No matter where your sales career takes you, the following tips will make you a better salesperson.
- Take advantage of social media. Although social media automation is included more frequently in B2C sales strategies, there is still room for it in B2B sales, too. Sites like LinkedIn, Twitter, Facebook, Instagram, and TikTok all have opportunities for B2B or B2C sales.
- Find overlap if you’re looking to expand your reach. Companies like Apple and Microsoft have both B2B and B2C customers. Having customers in the B2B market and the B2C market increases your bottom line.
- Develop a realistic plan for generating leads. More leads equals more sales—but only if you’re sure to follow up with them. Promising a whitepaper when a lead provides their contact information, but then never providing that whitepaper, can easily create more harm than good.
- Don’t push for a decision until you’ve spoken to all the decision-makers. This is as true in B2C sales as it is in B2B sales, particularly for big purchases. A “no” from a spouse is just as powerful as a “no” from a CEO. Both end sales.
- Pay attention to trends. Marketing trends can work for you or against you when influencing buying decisions, so you have to be careful which bandwagon you jump aboard. B2C and B2B buyers are equally affected.
- Keep track of your customers using CRM software. CRM software helps you through the entire buying process, from cold call to mid-funnel messaging to close.
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