Business-to-business trading can be done through teleconferences.
Also known as B2B, business-to-business commerce is a term used to identify business transactions that take place between businesses. This is in contrast to transactions involving the sale of goods or services to a private consumer or a government agency. With this specific application, a company buys the products of another company, and the recipient operates as a retailer or wholesaler.
Business-to-business trading relies heavily on establishing a strong working relationship between the two entities.
In a business-to-business transaction, the recipient may also use the purchased items as components of products that the buyer offers to customers for sale. The case of a car manufacturer is a classic example of B2B activity. Car and truck manufacturers purchase windshields, tires, hoses, and other components that are used in the assembly of a new vehicle. These vehicles are then sold to consumers, resulting in what is known as a business-to-consumer or B2C transaction.
The same general approach can be taken with the purchase of services offered by one company by another company. For example, a teleconferencing bureau may choose to allow another teleconferencing company to resell its services under its own brand name. In this case, the buyer of the services acts as a wholesaler. The recipient company buys services from the provider at a specified rate, brand these services with its own company name, and sells the services at a profit.
A wide range of industries use business-to-business trading to function. In the food industry, supermarket chains rely on buying products from manufacturers at competitive prices that allow them to resell food products to consumers. Auto repair companies use volume purchases with manufacturers to secure tires, batteries, and various engine components at prices lower than individual consumers could afford, making it possible to charge prices that consumers consider fair and still so make a profit. Retail stores also buy in bulk from manufacturers for different products that can be sold in their stores at a profit.
As with any type of situation involving a buyer and a seller, the business-to-business business process relies heavily on establishing a strong working relationship between the two entities. The buyer must be satisfied that the goods or services offered by the seller are of acceptable quality, available at a fair price and ultimately useful. At the same time, the seller must be satisfied that the buyer is willing to comply with all terms related to the sale and has the ability to pay for purchases within a reasonable period of time. If these fundamentals are not present, the business-to-business business cycle will not be complete and the relationship between the two businesses will cease to exist.