Business-to-business

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 sources materials for its 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).

Business-to-Business companies represent a significant part of the United States economy. This is especially true in firms with 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] One possible argument of economics to explain the levels of Business-to-Business activity is that it allows for business segmentation.^[3]

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