Supply Chain

Supply Chain Differences between B2B and B2C

The definition of supply chain refers to the distribution of a product or from start to the delivery to the consumer. Managing of the supply chain involves sourcing, manufacturing, storage, distribution, and delivery of goods to the customers. It requires integration with channel partners, including suppliers, distributors, and customers, to create a linked channel (www.learnthat.com, 2007).

E-commerce is basically any online transaction while B2C is when a company sells its products to consumers online and is for internal use. Examples of such organizations include Amazon.com, Borders.com, and other store websites that individuals can go to and purchase items directly from the site. B2B is an exchange of products and services between businesses but not consumers. So, basically, B2B is e-commerce between businesses. Some examples of categories where B2B websites fall include the following:

1. Company Web sites

2. Product supply exchanges

3. Industry portals

4. Brokering sites

5. Information sites (TechTarget Enterprise, 2007).

B2B differs from B2C in a few ways. First, the total transaction amounts are higher for B2C and are seller driven. According to one article by John M. Coe's there are seven key differences between B2B and B2C from a marketing perception. These differences include the size of the market, the buying and selling process, the cost and value of the sale, data quality as well as lead generation vs. sale (Coe, 2001).

Another difference is that B2B transactions are actually larger and growing faster than B2C. According to Dholakia, an estimate was done and found that B2B made up 80% of all e-commerce and is expected to increase to more than 90% in the next few years (Dholakia, 2002).

Time and quality expectations are other differences of B2B and B2C. Consumers have a quick time expectation meaning that the consumer wants what they buy at the fastest possible delivery rate. Businesses tend to have more tolerance on the time of delivery issues.

On the quality side, individuals expect product to be of good quality but tend to settle for cheaper price over quality. Organizations on the other hand are just the opposite when making purchases businesses tend to prefer higher quality and are willing to pay for quality if the higher cost of the product benefits the organization when looking at the bottom line. In B2C transactions most individual do not want to go through the hassle of sending items back for replacement if the product has minor differences and will accept the item as it is unless it is broken or