Business To Business - B To B

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DEFINITION of 'Business To Business - B To B'

A type of commerce transaction that exists between businesses, such as those involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business refers to business that is conducted between companies, rather than between a company and individual consumers. This is in contrast to business to consumer (B2C) and business to government (B2G). A typical supply chain involves multiple business to business transactions, as companies purchase components and other raw materials for use in its manufacturing processes. The finished product can then be sold to individuals via business to consumer transactions.

Also called B to B or B2B.

BREAKING DOWN 'Business To Business - B To B'

An example that illustrates the business to business concept is automobile manufacturing. Many of a vehicle's components are manufactured independently and the auto manufacturer must purchase these parts separately. For instance, the tires, batteries, electronics, hoses and door locks may be manufactured elsewhere and sold directly to the automobile manufacturer.


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