Today reducing operating costs is one of the biggest challenges faced by small businesses. For small businesses where the economics of scale does not apply, the only way to reduce manufacturing costs is by either buying your raw materials cheap or by reducing your labour cost. Now due to various reasons reducing labor costs is often not possible. Hence the only way for a business to reduce operating costs is by reducing the cost of raw materials. One of how small companies manage this is called the Business to Business marketing model (also called B2B).
What is business-to-business Marketing?
To understand how we can make more profit with business to business connections, we must understand Business To Business marketing. When any business transaction happens directly between two businesses, without the involvement of any middleman it is called Business To Business marketing. This invariably has the advantage of cutting out the middleman’s share of profit, thereby reducing buying price for the buyer and increasing the selling price for the seller. Now for any transaction to qualify as business-to-business marketing it must be so that the finished goods services of the seller are the raw material for the buyer’s business. Only then can it be called Business To Business marketing.
How to make business-to-business connections?
As the definition implies, business-to-business marketing only works when you have small businesses connecting. This begs the question; How do we improve business-to-business connections? The answer lies in networking. As a small business, marketing your product to a business is equally as important as marketing to a customer.
Effective business-to-business connections can be made by
- Networking between companies
- Marketing platforms which specialize in business-to-business trading.
- Talking in industry-specific groups & seminars.
- By aligning your priorities & products in line with the demands of the seller & market.
- Proactively creating avenues of cooperation.
- Leveraging social media platforms & interacting with industry leaders.
- Concentrate on the target audience rather than focus on the general masses.
We will illustrate this point with an example:
Bekins Moving Solutions Los Angeles movers is a packaging solutions company specializing in the lifting & moving of heavy cargo. Northern Mat is a company which specializes in the manufacture of mats for Heavy Equipments. When Northern Mat needs to deliver cargo to the other side of the country, they will hire a company like Bekins to get the job done for them. By having a business directly approach another business for goods & services, both the involved parties can negotiate a much better rate, at the same time creating a long-term customer. This kind of symbiotic relationship is a classic example of business-to-business connections increasing the profit of businesses.
This example beautifully demonstrates the power of business-to-business connections networking and how they can come together to help each other improve their bottom line.
So, business to business connection is a wonderful way to increase profits in the long run by reducing overhead costs and improving overall business integration.