B2B2C Ecommerce: How to Tap into Economies of Scale

Consumers likely engage with business-to-business-to-consumer (B2B2C) ecommerce without even knowing it.

The advance of B2B2C has blurred the lines between traditional B2B ecommerce sales and the end user. Manufacturing businesses can increase their reach for less cost, distributors can sell more products minus product development outlay and customers win with access to a wider variety of brands showcased within one ecommerce storefront.

Customers’ search and online habits have changed, especially post-COVID. Remote work and social distancing spawned click and collect, one-click restaurant delivery, and microprocessing platforms — all designed to remove friction and make buying easier. 

B2B2C commerce can be beneficial to all parties involved. And BigCommerce is leading the way with its simple yet innovative modern platform built for brands.

What is B2B2C ecommerce?

Simply put, B2B2C acts as an intermediary connecting suppliers and consumers, whether a manufacturer or a supplier of services.

Unlike traditional B2B or B2C ecommerce models, B2B2C streamlines the supply chain, enhancing value for all parties. It’s also different from white labeling a product where a company rebrands an item to present as its own. The end customer understands they are buying a product or using a service from the original company.

Channel partnerships vs. direct-to-consumer

Most people begin their purchase consideration with an online search. They give little thought to the type of ecommerce site they land on. It’s unlikely they know the difference between one sales channel and another. They don’t care, to be blunt.

Before launching a B2B2C ecommerce business, it’s important to understand what B2B2C is, and how it compares to other ecommerce business models so you can make the most informed decision.

Channel Partnerships.

A channel partnership describes when a company partners with a producer or a manufacturer to market and sell their products, services or technologies. 

Unlike B2B2C, channel partnerships often end up with a company re-branding the products or services they sell as their own instead of the original manufacturer.

This is known as white labelling. Food stores often use channel partners to offer savings to their customers, like the Kirkwood brand at Costco or 365 by Whole Foods Market.

Direct-to-Consumer.

Direct-to-consumer is straightforward: a business or brand sells its products directly to the end consumer. Anything you buy in an online store as a consumer — from wardrobe and household supplies to entertainment — is done as part of a B2C ecommerce transaction.

There is no middleman between the consumer and the business, unlike B2B2C.

How B2B2C works

Suppliers focus on creating products and services. These suppliers partner with a B2B intermediary, a retail platform, a marketplace or a service aggregator.

The intermediary platform then offers these products or services directly to consumers through the established network, often under its branding.

B2B2C retail.

Amazon Marketplace is the world’s largest B2B2C ecommerce retailer. Many manufacturers list their products on Amazon which promotes them to consumers and receives a fee for every transaction.

B2B2C service.

Food delivery services, like Uber Eats, act as an intermediary for suppliers (restaurants) to deliver food to consumers.  

B2B2C financing.

Online payment platforms, like PayPal and Stripe, are familiar to most consumers. They provide processing services to businesses and then allow consumers to make online purchases securely. Some investment platforms or robo-advisors partner with other financial institutions (B2B) to offer investment services to retail investors (B2C).

Benefits of B2B2C

B2B businesses are expanding to the B2B2C for many reasons. Shifts in consumer buying patterns, lower operating costs and technology and automation integration have contributed to growing interest in B2B2C ecommerce. 

Remote work. 

Amazon’s recent return to work mandate notwithstanding, hybrid work is here to stay. Because so many people will continue to work from home, buying habits, like home-delivery services which were once considered a luxury, have changed for good.

Amazon's stance contrasts with the UK government's approach, which has promised to make flexible working a default right from day one as part of a new employment rights bill. 

Scalability.

Few B2B brands can rapidly scale their operations without compromising service or sales efficacy. Many B2B companies partner with a complementary business to maximise business opportunities. 

For example, digital platforms can handle larger customer databases with minimal additional infrastructure. Cloud-based solutions allow businesses to pay only for the storage or computing power they use, offering significant savings compared to maintaining physical servers.

Third-party logistics (3PL) providers can handle the warehousing, shipping and delivery process, allowing businesses to focus on their core activities without investing heavily in logistics infrastructure.

Successful partnerships find truth in the adage, ‘The sum of the parts is greater than the whole.’

Lower operating costs. 

In a B2B2C ecommerce model, businesses that serve as intermediaries between manufacturers and consumers can optimise their operations for better cost efficiency. By leveraging technology platforms, digital marketplaces and data analytics, businesses can reduce manual processes, improve demand forecasting and streamline supply chains.

For example, automation in inventory management, order fulfillment and customer service can minimise overhead costs associated with manual labour. Additionally, predictive analytics can enable companies to stock only what’s needed, reducing excess inventory and lowering warehousing and customer acquisition costs.

Affordable consumer pricing. 

The B2B2C model can make prices more affordable for consumers by reducing intermediaries in the supply chain. Connecting businesses directly with end consumers eliminates additional markups from middlemen. This streamlined approach often results in lower operational costs, which can be passed on as savings to customers.

Better inventory management (mentioned above) and reduced overhead, further drive down prices. The model also enables businesses to gather direct customer data, leading to more efficient marketing and personalised offerings, resulting in better value for consumers.

What does a B2B2C relationship look like?

A successful B2B2C business relationship relies on the communication and compatibility between the two companies coming together. 

Within this relationship, one partner typically already has access to the consumer market, while the other wants access. Finding the right balance in helping the other succeed is critical to the relationship’s long-term viability. 

This type of relationship is often dependant on two main factors:

Direct access to consumer data. 

For businesses looking to enter a consumer market, having access to consumer data can be invaluable. The more data they have, the better their chance of a successful business outcome. 

If one of the businesses is unwilling to exchange data, the partnership could fail before it starts.

Brand recognition.

Brand recognition is often the primary difference between a sale and a missed opportunity. 

One of the main reasons B2B2C happens is because of the strength of the partner brand. Brand recognition jumpstarts the other business into a desired consumer market and gives them a distinct competitive advantage. 

Challenges of B2B2C ecommerce

While B2B2C ecommerce offers a host of attractive benefits for brands, it can be challenging to orchestrate. B2B2C partnerships require work from both sides particularly when it comes to:

Data sharing.

Successful B2B2C ecommerce partnerships require real-time integrations between all parties. Data for customer records, stock, inventory, pricing, promos, marketing strategies and loyalty data must be synced. Failure to do so can result in a fragmented customer experience (CX). Balancing the need for data sharing between businesses while protecting consumer privacy can also be tricky.

Brand differentiation

Unlike "white label" partnerships, B2B2C assumes clear differentiation between each company. Also, maintaining a consistent brand image and market position becomes difficult when different businesses are involved in the distribution process.

Product promotion.

Both parties need to contribute to promoting the products fairly. If the partner doesn't give your products a decent spotlight, why bother having them as a partner?

Pricing and margin control.

B2B2C involves multiple stakeholders — the original business, intermediary businesses and end consumers. Each entity in this chain expects to derive value, making it difficult to balance profit margins across the board, so it’s complex. Depending on the type of ecommerce retailer, different regulations may apply at various stages of the B2B2C model, affecting pricing strategies and margin calculations.

Customer service challenges.

Again, multiple stakeholders add to customer service challenges because each group may have different needs and expectations.

For example, the intermediary business often handles most consumer interactions, potentially reducing the original company's ability to gather direct feedback or address issues promptly. Problems may involve multiple parties, making it difficult to determine responsibility and resolve issues quickly. 

Ensuring a consistent brand experience across different business partners can be challenging, as each may have its own customer service practices.

Technology integration and scalability.

Ensuring seamless integration of customer service systems between the company and its business partners can be technically challenging. As the number of business partners and end consumers grows, maintaining service quality at scale becomes increasingly challenging.

Complex supply chain and logistics.

As the number of business partners and end consumers grows, maintaining service quality at scale becomes increasingly challenging. Problems may involve multiple parties, making it difficult to determine responsibility and resolve issues quickly.

Examples of B2B2C partnerships

To better understand how companies have employed a successful B2B2C model, let’s look at some popular examples:

Amazon and third-party sellers.

There are app marketplaces and retail marketplaces. Apple and Google are the two big app stores for your iPhone and Android mobile device.

Amazon is the behemoth of online retail. Once it opened the floodgates to third-party sellers, the rush was on. Businesses understood immediately the value of tapping Amazon’s enormous market size. B2B sellers now had an easy way to list products and reach a ready-made audience of potential new customers with minimal effort.

Business buyers are no different than everyday consumers. They browse marketplaces because they want to source products, compare prices and read reviews, in one place.

The bigger the platform, the better the ROI. In 2023, Amazon’s marketplace captured 83.5% of Amazon’s net sales, with vendors selling $480 billion worth of merchandise. 

You don’t get much bigger than Amazon.

Instacart and grocery stores.

Busy schedules. Hurried lives. People often don't have time to go to the grocery store — today's shoppers increasingly prefer that someone else does the shopping for them. Most grocery stores don't offer this service because of the significant investment in technology and staffing required. 

Instacart demonstrates how B2B2C can work for tech start-ups and legacy grocery stores. They offer an ecommerce site where consumers can replicate the entire grocery shopping experience directly from their website. 

Instacart reaps the benefits of partnering with the existing grocery stores — which provide a built-in customer base — while grocery stores offer a service to their customers with minimal investment.

As an intermediary for stores, Instacart adds critical customer service while enhancing the stores’ brand reputation.

Affirm and finance retailers.

Let's consider the partnership between Affirm and BigCommerce merchant UPLIFT Desk. Instead of offering financing, this Buy Now, Pay Later company partners with the ecommerce retailer to offer customers the option of monthly payments.

Customers know they are paying Affirm for their services, but UPLIFT enjoys the brand lift of stellar customer service. This seamless integration is what makes B2B2C ecommerce work.

The final word

The B2B2C model is great for scaling customer acquisition by tapping into different sales channels and partners. But let’s be real — running a successful B2B2C operation can be tough. You’ve got to negotiate win-win partnerships, keep data flowing smoothly, ensure a consistent customer experience across all distribution channels, manage the supply chain and figure out who actually "owns" the customer. It’s a lot to manage.

By partnering with BigCommerce, our experts can ease many of the challenges you may face running a B2B2C business. With a lower total cost of ownership and the intuitive direct-to-consumer-like experiences your B2B buyers have come to expect, BigCommerce is an innovative modern platform, delivering the flexibility enterprise brands need to outpace the competition.

FAQ about B2B2c ecommerce