The phrase ‘business to business’ refers to a transaction, product or service that takes place between companies, governmental bodies and institutions as opposed to between businesses and consumers. In e-commerce terms (i.e. doing business on the internet or other computer networks), the former is referred to as ‘B2B’, the latter as ‘B2C’.

For example, HMV might sell some copies of a popular CD to Virgin Megastore or Amazon may sell some copies of a newly released paperback book to Waterstone’s. All these transactions are between companies.

When doing business on the internet, a company can place orders, receive invoices and make payments. Indeed most of the major players work this way.

Major supermarket chains are vigorously involved in B2B because without it they couldn’t function economically. If you consider the vast product range involved and what goes into the re-ordering of existing lines and the introduction of new lines, you can start to understand why B2B evolved and how we can’t now live without it. A corner shop has no problems in maintaining what little stock it may have, but progress from that to small supermarket and you need something a little more sophisticated or the whole process becomes unmanageable. Before the advent of B2B, experienced staff were employed with the specific task of purchase-ordering; and part of the weekly or monthly routine was to do a stock-take of the number of items on the shelves. Technology has made this more-or-less redundant but you will still see it in operation in companies where B2B is not practised.