The four main types of business-to-business (B2B) markets are producers, resellers, governments, and institutions. These categories represent the different kinds of organizations that purchase goods and services for use in their own operations, for resale to other businesses or consumers, or to fulfill their organizational missions.
Overview of B2B Market Categories
| Category | Description | Examples |
|---|---|---|
| Producers | Businesses that purchase goods and services in order to produce other goods and services. | Manufacturing companies buying raw materials, construction firms purchasing equipment. |
| Resellers | Businesses that buy products and then resell them to other businesses or consumers for a profit. | Wholesalers, distributors, retailers. |
| Governments | Federal, state, and local government entities that purchase goods and services to support public services and infrastructure. | Military, public schools, transportation departments. |
| Institutions | Non-profit organizations, such as schools, hospitals, and charities, that purchase goods and services to support their operations and fulfill their missions. | Universities buying lab equipment, hospitals purchasing medical supplies, charities buying supplies for their programs. |
Producers
- Definition: These are companies that buy goods and services to incorporate into their own products or services. They transform these inputs into something else that they sell to other businesses or directly to consumers.
- Example: A car manufacturer purchasing steel, tires, and electronic components to assemble vehicles. Another example is a bakery buying flour, sugar, and eggs to bake bread.
Resellers
- Definition: Resellers purchase products and sell them onward for a profit. They don't significantly alter the goods, but they add value by providing distribution, convenience, and expertise.
- Example: A wholesale distributor buying products in bulk from manufacturers and selling them to retailers. A retail store buying clothing from a distributor and selling it to individual customers.
Governments
- Definition: Government entities at the federal, state, and local levels represent a massive B2B market. They purchase a vast array of goods and services to support public services, infrastructure projects, and defense.
- Example: The Department of Defense purchasing military equipment, a city government buying road construction services, a school district buying educational software.
Institutions
- Definition: This category includes non-profit organizations that purchase goods and services to support their operations and fulfill their missions.
- Example: A hospital buying medical equipment and supplies, a university purchasing research equipment and software, a charity buying food and supplies for distribution to the needy.
