Thursday, 7 March 2013

Understanding B2B, B2C and G2B

First printed in Consumer News Namibia magazine - Jan 2013 edition

In today’s modern world we have so many new things and often they have long names. To make our language easier we use abbreviations like LOL (laughing out loud), especially when we write or sms. As a consumer it is important to understand the types of relations between suppliers and buyers and thus the terms we use such as Business-to-Business and Business-to-Consumer because we need to understand the regulations in each of these markets and how we are protected – or not.
In the diagram, it shows that the end user of a product or service can either be a consumer, a business or government. (C, B or G). In the same way, the supplier of a product can either be a consumer, a business or government. (C, B or G).

Thus if the supplier is a business (B) and the purchaser is a consumer (C) we refer to this type of transaction as B2C. If a person (C) sells their car in a private sale to another consumer (C) it is a C2C transaction.
Thus we have the following abbreviations
o    Government to Government (G2G) – For example, transactions that take place between central government and the decentralised functions at local and regional level, or purchasing of electricity by government departments from town councils.
o    Government to Business (G2B) – Services provided by Government to the private sector, for example the rental of industrial buildings by the Offshore Development Company.
o    Government to Consumer (G2C) – The provision of education or registering births and deaths is an example of services provided by Government. Some of these service are stipulated as a right and should be provided free of charge, while others are provided on a cost recovery basis.

o    Business to Business (B2B) – These include all services and products supplied to the businesses as part of their production process or for own usage. For example supply of copy machines or factories supplying goods to retailers.
o    Business to Consumer (B2C) – The consumer is the end user of a product or service, for example a retail store.
o    Business to Government (B2G) – These refer to transactions where government is the end user of a product or service. Most of these are done on a contract through a tendering process.

o    Consumer to Consumer (C2C) – These normally refer to transactions of sale between consumers and can also include legally enforced financial transactions such as child maintenance
o    Consumer to Business (C2B) – This normally refers to where consumers are paid a fee or commission for promoting a product or service on behalf of a company.
o     Consumer to Government (C2G) – These are transactions where fees are paid via online payments for services such as licence fees or taxes

In Namibia we have been discussing the electronic transactions legal framework, but, as in the case of the consumer protection laws, nothing has yet been tabled in Parliament. As we become part of the global village, and the accompanying international trade environment, it is important that we get the legal framework in place to protect us as consumers.

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