Business-to-Business (B2B) and Business-to-consumer (B2C) - Essay Example

B2B AND B2C Business-to-Business (B2B) and Business-to-consumer (B2C) are two types of e-businesses found on the Internet. E-commerce is an umbrella term used for all business done online but when close studied there are some technical differences which set of type of business apart from another. B2B is the business where both parties are organizations or companies working with each other for some kind of mutual benefit such as Skillbay.com. An example of this would be industrial suppliers or manufacturers who sell to a business that eventually takes final goods to the customers. Whereas most other sites would fall in the category of B2C since organizations are selling their services or products to consumers. Examples include Amazon.com and Walmart.com. The main difference between a B2B and a B2C is that of who purchases at the other end, whether it's the consumer or a business buyer as defined earlier. The other difference is the complexity of the business-to-business setup as compared to a business to consumer setup. Supply chain management gets involved with in a business-to-business setup making the online process all the more complicated. And then there is also an issue of security that needs special consideration in business to business as compared to the business to consumer e-commerce. The other differences could be the negotiation and integration. Negotiation means bargaining prices and in case of business-to-business selling the most important thing is negotiation. The selling companies find it very difficult to quote a single quote online for the business buyers while at the same time its not the negotiation over the prices that brings the trouble, but also the delivery date and the specification of the products and services they are selling. For this reason when the business-to-business e-commerce came up it was from most companies that sold finished goods to business buyers because it was easy to quote a price and specification. Where as in case of the business to consumer selling, the retail seller, for instance, only had to upload a catalog of products or services for he end consumers listing prices and specifications and giving a specified delivery time for home and foreign buyers. The other issue of difference is that of integration and interaction. While the business to consumer seems very easy as the any online retail store would just has to upload a catalog with prices and specification, the negotiation part involves another complexity within the business to business setup and that is of integration. There needs to be integration between the seller and the buyer system for effective business-to-business e-commerce to take place. At times, the buying company could not integrate with the selling company and vice versa which makes the transaction difficult to handle. Channel integration was also a problem for the business to consumer e-commerce in the earlier phase of e-commerce development as a lot of stores declined to connect their Web companies through the internal back office systems. Many companies rejected in an effort to build up a distinct Web unit and articulated much about the efforts of those who approached them as cannibalization of present sites. However, as it proved it was much of a fear than the actual eating up and companies like the Gap without delay adjusted to the new system in order to let customers do online transactions and in case of any default return the products back to the physical retailer. This opportunity and ease pulled out many fears of the customers of an online shopping system and in turn increased online sales as there could be more effective follow-up system online and the order management would be handled more effectively. This not only gave confidence to the online shopper but also increased the value of the products and services they purchased. There are various ethical and legal regulations to follow when these businesses are started. Like any other business, online organizations have a responsibility towards their clients and this includes keeping their information private, using responsible and ethical information and ensuring delivery of items purchased- to name a few. In a B2B organizations, regulations may be few but they have a greater legal repercussion if nor followed than in B2C organizations since both ends are runs by real organizations. For example if Microsoft chooses to do business with Dell corporation, they would both have to be extremely careful not to misuse information provided since both are in a good position to legally sue the other party. In B2B, the most important thing is the information presented on the website. For example when a firm tries to make claims about its products or supplies, it is important not to make fraudulent or baseless comments. An attempt to damage the reputation of another firm or attract business through fraudulent claims can result in immediate legal action. It is also ethically irresponsible to do so. In a B2C setup, the organization is responsible for ensuring the customer's information stays private and confident. While we may not read the fine print, it has been noticed that consumers are increasingly becoming aware of privacy agreements present on many websites, especially the ones that engage in online selling. One website wisely explains why privacy statements are important: "According to a survey done by the Privacy Leadership Initiative, 82 percent of consumers were paying attention to online privacy statements in April 2001, and that number was rising. Customers may not read the fine print, but they are reassured by the presence of a privacy statement. If you're not sure where to begin, visit the online arm of the Better Business Bureau or the non-profit group TRUSTe. Both organizations offer privacy seal programs. Even if you choose not to join, you can learn about the kinds of precautions you should take and how to explain them to your customers. Once you establish a privacy policy, though, make sure you follow it, or you'll be putting your company at risk for lawsuits and bad press." (ABC of E-commerce) Similarly it is also important to make sure the customer receives his purchased items on time. Ensuring timely and certain delivery is a good way of boosting sales. Customers are wary of buying products or services from websites that appear sloppy about delivery. Seals play a vital role in boosting consumer's confidence. Last but not the least, firms have to be clear on the subject of taxation. In case of physical presence, the firm would have to pay taxes on Internet sales as well. However if the business is exclusively online then taxation laws don't apply. 'US Chamber of Commerce' is discussing some of the important ethical and legal issues facing B2B and B2C operations in the US. These issues are as follows: Privacy: The chamber would want to have stricter regulations concerning the use of personal information. Spam: what should be categorized as Spam. While we may not get many unsolicited mails from B2B operations, this is a common occurrence in B2C operations that utilized emails as a vital advertising tool. Now we already have regulations that define and restrict Spam but US chamber of Commerce is considering other regulations to prohibit "pornographic, fraudulent and misleading" mails. Reference: 1. ABC of E-commerce: Retrieved online August 22nd, 2006 from http://www.cio.com/ec/edit/b2cabc.html#taxes 2. E-commerce: US Chamber of Commerce: Retrieved online August 22nd, 2006 from http://www.uschamber.com/issues/index/technology/e_commerce.htm Read More