by Diane Perez

Created on: September 24, 2009   Last Updated: October 28, 2009

The term B2B sales means business-to-business. There are different levels of B2B sales but all involve "behind the scenes" transactions instead of selling to the public. Every business needs equipment and supplies in order to manufacture a product or provide a service. When one business buys equipment and supplies from another business, this is a B2B sale.

Here are some examples of the different levels of B2B sales as we follow the final product of a t-shirt through the production chain. This example will provide a detailed explanation by following one product from the beginning of its creation until its display on a retail shelf.

The first level of the production chain starts with the cotton farmer buying cotton seed from the garden supply business. This is a B2B sale because the product is sold at a wholesale price to the farmer for commercial purposes and it is not intended for resale to the public. The farmer receives his cotton seed and plants it. He grows the cotton until it is time for harvesting.

The farmer harvests his cotton plants and conducts a B2B sale when he sells the cotton to a manufacturer. The manufacturer will treat the cotton and transform it into spools of thread. The colors and thicknesses of the thread will be determined by market needs within the fashion industry.

The manufacturer of the cotton thread sells his product to a fabric manufacturer in another B2B sale. The thread will be woven into a variety of cotton fabrics including fleece, tee shirt material, quilting fabric, corduroy, and denim. For the purpose of this example, these cotton fabrics will be sold to clothing manufacturers.

The next B2B transaction will be when a clothing manufacturer purchases the cotton material from the fabric company. The clothing manufacturer makes tee shirts in a variety of sizes, colors, necklines, and sleeve lengths. The tee shirts made by the manufacturer include lightweight cotton fabric for summer and fleece for colder weather. He also uses some of the cotton fabric to make baseball caps.

The clothing manufacturer then packages his goods and sells them wholesale in another B2B transaction. This sale happens when the clothing manufacturer sells his tee shirts and baseball caps to a screen printing company. The screen printer will put pictures and logos on the merchandise as his part in the production process. Then, the finished tee shirts and baseball caps undergo another B2B sale.

The end of the production line and the final B2B sale occurs when the screen printer sells his tee shirts and baseball caps to hotels, resorts, tourist attractions, and many other venues. These final purchasers will sell the product at retail to their customers.

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