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Business-to-business

Commercial transaction between businesses / From Wikipedia, the free encyclopedia

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Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a commercial transaction with another. This typically occurs when:

  • A business is sourcing materials for their production process for output (e.g., a food manufacturer purchasing salt), i.e. providing raw material to the other company that will produce output.
  • A business needs the services of another for operational reasons (e.g., a food manufacturer employing an accountancy firm to audit their finances).
  • A business re-sells goods and services produced by others (e.g., a retailer buying the end product from the food manufacturer).
Guangzhou-electronic-components-shop-0479.jpg
The "electronic components district" of Guangzhou, where numerous shops sell electronic components to other companies that would use them to manufacture consumer goods

Business-to-Business companies represent a significant part of the United States economy. This is especially true in firms of 500 employees and above, of which there were 19,464 in 2015,[1] where it is estimated that as many as 72% are businesses that primarily serve other businesses.[2]

B2B is often contrasted with business-to-consumer (B2C) trade.