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B2B Commerce

According to this, both the parties involved in e-commerce transactions are business organisations, and, therefore the name B2B, i.e., business-to-business. Conception of utilities or delivering value requires a business to communicate with numerous other business organisations which may be suppliers or vendors of diverse inputs; or else they may even be a part of the channel by means of which an organisation distributes its products to the consumers. For instance, the manufacture of an automobile requires assembly of a many large components that are manufactured elsewhere, within the vicinity of the automobile factory or even overseas. To reduce reliance on a single supplier, the automobile factory has to communicate with more than one vendor for each of the components. A network of computers are used for placing orders, monitoring production, speedy delivery of components, and effecting payments. Similarly, an organisation may strengthen and progress its distribution system by exercising a control over its stock-in-transit as well as the various middlemen in different locations. For example, each consignment of goods and the stock-at-hand of a warehouse can be monitored and replenishments and reinforcements could be set in motion whenever required. Or else, a customer's specifications have to be routed through the dealers to the factory and keened into the manufacturing system for effective and customised production. Using e-commerce expedites the movement of the information and documents; and recently, money transfers are also done through this. The term e-commerce historically means facilitation of B2B transactions using Electronic Data Interchange (EDI) Technology to send and receive viable documents like purchase orders or invoices.

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