B2B vs. B2C Explained

Siva Prasad
A free video tutorial from Siva Prasad
SAP Trainer and Consultant
4.4 instructor rating • 10 courses • 81,551 students

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SAP MM Training - in Plain English

You know English ? That's more than enough to learn SAP MM

26:00:09 of on-demand video • Updated August 2018

  • Understand the major business processes in SAP MM
  • Understand how to complete the business processes in SAP MM
  • Understand key technical concepts ( apart from the business processes ) like Movement Types
  • This course is NOT just a short HOW-TO. It deals with all the important business processes in SAP MM
English [Auto] The next thing they want you to understand is the perspective that you should take and when you're learning SFP typically there are two different kinds of ways business transactions can happen. One is B2B none other is beat to see B2B stands for business to business B to C stands for business to consumer or customer. Let me give you some examples. If you're trying to buy coffee beans called the coffee grinder or to your home while you need some flour home what do you do. Go to amazon.com say go to Wal-Mart. You select your products then you may take the bag of coffee in your truck and go home. Simple. So the process of buying coffee beans for home or for routine consumption generally is pretty simple. Imagine the same scenario happening in our coffee shop my coffee shop although small is still an example of a B2B transaction. How does it happen. This shop is a plant where pastry is being manufactured. So this is the factory and right next to it there is a storage location where I store the coffee beans and whatnot. This of course is the coffee shop. Somebody from the stores who's managing the inventory. So the store manager observes that the store is running out the coffee beans Saibai the next three days and he informs the shop manager the shop manager he's responsible for the overall operations say. And he says we are going to run a coffee shop or the manager raises this to the general manager of the store. Right. And the general manager is going to raise a purchase order. This is going to go to the vendor. The windows will send the goods or worse and somebody in finance is going to pay the rent. Right. So if you want to buy coffee beans the process is just not that simple. This is just in a single coffee shop. So in contrast to B2C B2B is complex. You're buying coffee for a simple coffee store is as complex as this. Imagine Starbucks buying one of those pomes of coffee. So this Starbucks and they want to buy hundred thousand pounds of coffee. What happens now. That's that's that's probably like a million dollars. Right. So step number one Starbucks is going to create a purchase order Step number two. Probably there is a vendor screening process that happens or prescreened. So there's a process of vendor selection then. Step number three is Margit somebody higher up in the chain is going to do the budget number for the order. Number five of course received number six quality inspection is done. And finally coffee is stored in the stores or in the warehouse. Then one of the stores needs some coffee than coffee beans is issue. That store just say the store on Michigan Avenue. The process of doing all of this is complicated. This is a long decision making process whereas if you want to buy the same coffee for yourself it's really simple. All right. You are the poor you are the cube. You go inspect the coffee or smell your largest exploiter meaning you take the coffee put it in your truck or car you drive home right. You are everything you do all of that in a B2B scenario though there are different sets of people doing different sets of things. All to make this purchase happen. Another difference is in a bid to be scenario good paid after delivery. Right. You know the process appears race to the vendor vendor since the goods the vendors invoice in which is paid there are four steps. So the goods are delivered. That's step number two. And Step number three or four. It's Pete but in a B to see scenario you pay before delivery. This is a typical case right. Example Amazon Dot Com Walmart swipe your card put your card and take the goods. And before you take the goods you're already paying for it. There are some occasional usage scenarios in BDC like Comcast or any kind of service where you know don't know how much to charge a friend in that case you pay after. So in such kind of situations you'll send the bill later after usage except for those usage kind of scenarios or regular scenarios where the prize is fixed. You almost always pay before delivery. So what's the point in trying to make the point in trying to make is if you want to learn SEP or any other ERP system think from the perspective of B to B because that's what these softwares are built for. B to see is sold by a different class of software are a piece of software typically deals with B2B and we'll talk about some of the scenarios where SFP plays a role in BDC situations. For the most part if you want to learn SMP thing from the mindset or perspective of a b b. So what are the things that we have covered here. We have understood that B2B scenarios are complex and are not as simple as bank coffee from Wal-Mart. So it's a long decision making process takes time. But are people identifying the need approvers and that is the whole logistics chain and financing wall to pay the goods. And typically you pay your goods after you receive the goods.