Most drop shipping businesses use a business-to-consumer (B2C) eCommerce model. However, some facilitate the sale of goods from one business to another (B2B). It all depends on where the drop-shipper is sourcing the items and to whom they are selling.
eCommerce business, especially dropshipping, has gained significant popularity in the recent past, growing by 44.4% in Q2 2020 alone. Although the idea is the same, no two dropshipping businesses are exactly the same. They differ in terms of product types, business size, and target audience.
Traditionally, dropshipping is considered to be a B2C business model, but some scenarios make it a B2B business. Get to know the difference between B2C and B2B dropshipping. This guide will also enlighten you on scenarios when B2B dropshipping is a feasible option.
What is B2C eCommerce?
B2C is an acronym that stands for business-to-consumer. B2C businesses are essentially retailers—buying their merchandise from the manufacturer or wholesaler then selling it to the end-user. As a B2C drop shipper, your target audience is the end-user.
In this regard, you market products to the consumer through your online store. When you get an order, you forward the details to your supplier and have them ship the product(s) to the consumer directly. The majority of dropshipping stores are B2C businesses.
What is B2B eCommerce?
B2B stands for business-to-business. B2B drop shippers are the ones that facilitate online transactions between two businesses. Rather than selling to individual consumers, B2B stores sell their merchandise to businesses.
As a B2B drop shipper, you will often facilitate online transactions between wholesalers and retailers or between manufacturers and wholesalers. A good example is a dropshipping store that deals in office furniture. The primary target for such a business would be other businesses, making it a B2B online seller
How Does B2B Differ From B2C Dropshipping?
The main difference is that B2B sales occur between two businesses while B2C transactions occur between a business and individual consumers. A dropshipping store can apply either or both the B2B and B2C models.
So, what exactly sets the two business models apart?
1. Brand loyalty
In a B2B drop shipping scenario, brand loyalty is an important part of the business. As such, B2B drop shippers focus on establishing long-term commitments as they engage in business dealings with other businesses. By so doing, they foster partnerships that generate a considerable part of their revenue.
Brand loyalty is not as important in the B2C sales process as it is for B2B businesses. This is mainly because the purchase value is comparatively smaller. At the same time, consumers tend to have a vast array of options to choose from.
2. Purchasing process
As compared to a B2B transaction, the B2C buying process is shorter and simpler. Basically, a B2C transaction usually involves a consumer making the purchasing decision based on their individual needs. A B2B transaction, on the other hand, is much more complex.
B2B purchasing decisions usually involve greater risks and money. This being the case, such decisions are usually made by several stakeholders. Such a process can take a few weeks to several months to conclude.
Most B2B eCommerce purchases involve heavier research, less marketing-driven buying, and needs-based buying. As a B2B drop shipper, your customers will have rather tight parameters around their purchases. This means that conventional revenue drivers, such as add-ons, won’t have the same impact on your business as they would for a B2C business.
3. Product Knowledge
Owing to the large investment required in B2B transactions, buyers tend to be more educated and knowledgeable on the product(s). In comparison, B2C customers often don’t have in-depth knowledge of the product(s) they are buying.
B2C online shoppers are also more susceptible to impulse buying.
4. Target Market
Another thing that sets B2B from B2C dropshipping businesses is their target market. B2B dropshipping businesses apply marketing strategies that seek to sell their products to other businesses and companies. Marketing, in such a case, is feature-led.
As a B2B drop shipper, your marketing should also focus on the logic as well as value your product has to offer potential customers. In this regard, B2B marketing strategies seek to offer educational and in-depth product information.
With a B2C dropshipping business, your target market is often individual consumers or end-user. This makes marketing much simpler for your business as you do not need to be as detailed as is the case with B2B marketing.
Does Drop-Ship Work for B2B Businesses?
Yes, B2B dropshipping is just as lucrative as B2C dropshipping, if implemented accordingly. As a matter of fact, some of the leading distributors like Staples, Cardinal Health, and Grainger use the dropshipping model extensively.
As demand shifts to digital channels, it makes sense for B2B businesses to incorporate eCommerce strategies, including drop shipping. Dropshipping is a great eCommerce model for B2B businesses for a number of reasons. To begin with, it lowers startup costs and keeps the overhead costs much lower.
Again, B2B dropshipping offers your business a better cash flow as compared to manufacturing or maintaining a product inventory. As a B2B drop shipper, you will be facilitating transactions between wholesalers and manufacturers.
The main idea here is to offer direct shipment to various points of sale as an effort to complement the main distribution model in your business.
Common B2B Dropshipping Applications
Almost all the dropshipping stores available today employ the B2C eCommerce model. However, this model may also be applied for B2B business transactions. Depending on your target market, B2B dropshipping can be an advantageous sales strategy for your businesses.
Here are some of the scenarios when B2B dropshipping is a feasible business model:
➢ Seasonal Products
Seasonal products are the items that mainly relate to a specific season, such as a festive period. They include summer clothes, Christmas decorations, Easter chocolate, and garden furniture. Such products need to be shipped to the respective customers on time.
B2B dropshipping, in such a case, means that the products will be shipped directly. As a result, you end up processing more orders without having to invest in the logistics.
➢ On-Trend Items
On-trend refers to those products that will be valuable for just a limited period. Such items require a more flexible responsive flow. This makes B2B dropshipping a viable option for such products.
➢ Large/Expensive Items
Dropshiping large and expensive items, such as machinery, from one business to another can have several benefits. It will reduce transport as well as storage costs and risks for your business.
➢ Fast-Turnover Goods
The same applies to products that have a fast turnover or items in high and constant demand. B2B dropshipping would also be a great idea for products that are currently out of stock.
Find a Reliable B2B or B2C Dropshipping Supplier
Whether you decide to use the B2B or B2C eCommerce model in your dropshipping businesses, you need to find a reliable and reputable supplier. In either case, you need a supplier that delivers high-quality products to your customers on time. You could find a good supplier on platforms like AliExpress, but the process could be a long and daunting one.
To avoid the hassle and inconveniences associated with the process, simply source through Best Fulfill—a professional dropshipping sourcing and fulfilment agent. Based in China, we have been helping both B2C and B2B drop shippers to source and ship genuine products.
We also offer additional services like branding and customized packaging for enhanced customer experience in your business.
Despite being the newest eCommerce model, dropshipping is, by far, one of the most popular online business models in use today. If you are dropshipping from a business to consumers, your business is considered to be a B2C drop-ship.
If you happen to facilitate transactions between two businesses using the dropshipping eCommerce model, then you are a B2B drop shipper. Depending on your target market and product niche, you could use either model exclusively or combine them to optimize your revenue.
In either case, you need a reliable supplier and trustworthy supplier. With Best Fulfill, you are guaranteed to get genuine products at the best price points. These dropshipping sourcing and fulfillment agents also offer additional services like quality inspection, dedicated logistics and customized packaging.