November 2, 2022
Startup Finance

B2B vs. B2C: What's the Difference?

You've probably heard the terms "B2B" and "B2C" before, but what do they actually mean and what makes them different?
John Ladaga

B2B vs. B2C: TL;DR

In a nutshell, B2B and B2C refer to different types of business models. A B2B business model is one in which a company sells its products or services to another business, while a B2C business model is one in which a company sells its products or services to consumers.

The truth is that there are a ton of differences between the two but you don't have all day so let's just talk about the three biggest differences between B2B and B2C business models.

Difference #1: Sales Cycle Length

First, B2B businesses typically have longer sales cycles than B2C businesses. This is because the decision-making process is often more complex in a B2B setting; when a company is considering making a purchase, it will usually need to get approval from multiple decision-makers within the organization. In contrast, individual consumers can usually make buying decisions on their own.

Difference #2: Price

Another key difference between B2B and B2C businesses is that B2B businesses typically sell more expensive products or services than B2C businesses. This is because businesses are usually willing to spend more money on products or services that will help them increase their bottom line, whereas individual consumers are usually more price-sensitive.

Difference #3: Target market

Finally, B2B businesses typically have smaller target markets than B2C businesses. This is because there are only so many companies that a B2B business can sell its products or services to, whereas a B2C business typically markets to a much larger group of consumers.

In conclusion...

So, what's the difference between a B2B and a B2C business? In short, it boils down to three things: the length of the sales cycle, the price of the product or service, and the size of the target market. Keep these things in mind as you're planning your business model, and you'll be well on your way to success.