3-5.Differences between B to B, B to C, and C to C and logistics facility planning
In modern business,B to B(Business to Business)B to C(Business to Consumer), andC to CConsumer-to-consumer (transactions between individuals) is not just a difference in commercial flow, such as whether the person selling the product is a corporation or an individual.
These three transaction forms differ not only in decision-making flow and purchasing psychology, but also inLot sizes handled, delivery speeds, packaging quality, and logistics operation mechanisms themselves are fundamentally different. Therefore, starting a new base, etc.Logistics facility planningWhen planning a business, depending on which type of transaction your company is targeting, you need to take a completely different approach to calculating the material handling equipment to be installed and the area of space required.
In recent years, many manufacturers and wholesale companies haveB to BBreaking away from the wholesale model and achieving high profit marginsB to C(especially if sold directly from the manufacturer)D2C：Direct to Consumer) and are rapidly expanding their business, making structural transformation of their logistics bases an urgent task.
1. Fundamental structural differences depending on transaction format
① Logistics characteristics of B to B (intercompany transactions)
B to BDistribution centers around delivery from factories to wholesalers, or from wholesalers to retailers' backyards. It is characterized by large transaction amounts and the amount of goods moved at one time in units of pallets or cases (large lots).
Logistics facility planningBecause large trucks frequently come in and out, securing a wide berth (vehicle space) and a wide flow line where forklifts can safely turn are the top priorities.Since picking operations are centered on cases, this is an area where the introduction of large material handling equipment such as automated warehouses (AS/RS) and sorters can be highly effective.
② Logistics characteristics of B to C (business-to-person transactions)
B to CLogistics (such as e-commerce mail order) is based on last-mile delivery to individual homes. The biggest feature is that the number of shipments (number of orders) can skyrocket, even though each order is for one or two items (very small lots/pieces).
Logistics facility planningIt is essential to secure a "picking area (digital assortment system and optimization of walking paths)" to efficiently walk and collect large quantities of loose products, and a "vast packaging/inspection space" to perform distribution processing such as gift wrapping and leaflet bundling.handle large lotsB to Bat the center ofB to CIf you bring in bulk work as it is, the flow line will be disrupted and work efficiency will drastically decrease.
③ Logistics characteristics of C to C (personal transactions)
Typical are flea market apps (Mercari, etc.) and online auctions.C to CIt's a deal. Companies do not sell directly, but provide a platform as a platform.In terms of logistics, delivery carriers such as Yamato Transport and Japan Post collect packages from one individual's home and deliver them to other individuals' homes, making full use of their highly decentralized and web-like network.
2. Main industries transitioning from B to B to B to C (D2C)
Traditionally, sales were carried out in boxes via wholesalers, primary distributors, and retailers.B to B), the manufacturing industry (manufacturer) is selling directly to general consumers (in single units) through their own e-commerce sites and malls such as Amazon and Rakuten Market.B to C/ D2C)" movement is evident in various industries.
- Apparel/textile/sewing manufacturers
Change and logistical challenges:We have shifted from OEM (contract manufacturing) and large wholesale sales to apparel brands to a model where we launch our own original brands and sell them directly on our own e-commerce site. Logistics bases need to be renovated from ``bulk deliveries to stores'' to specialized apparel centers that handle ``detailed picking by individual size and color, refolding, and return handling.''
- Food/beverage/agriculture/livestock/fisheries manufacturers
Change and logistical challenges:We have shifted from bulk wholesale to supermarkets and wholesalers to individual sales of ``subscriptions,'' ``exclusive products/direct delivery from the producer,'' and ``limited premium products'' through our own e-commerce site. Small-lot packaging with three temperature zones (room temperature, refrigerated, and frozen) for private homes and strict first-in-first-out (FIFO) management of expiration dates are essential.
- Manufacturer of daily necessities, miscellaneous goods, and daily necessities
Change and logistical challenges:In addition to large-lot distribution via mass retailers and home centers, we are strengthening direct sales through Amazon, Rakuten Market, and our own e-commerce site. It is essential to build a scalable shipping system that can withstand sudden and abnormal volume spikes (waves) during sales (Cyber Monday, etc.).
- Precision machinery, cooking utensils, and interior manufacturers
Change and logistical challenges:From manufacturing professional equipment for commercial use to selling to individuals as high-end home appliances and cooking utensils with designs and functions suitable for the general public (we have also conducted many test marketing campaigns using crowdfunding). Careful packaging and prompt individual delivery of after-sales parts after purchase are required.
- Printing, novelty and materials industry
Change and logistical challenges:We have shifted from bulk printing orders for companies to on-demand online orders for one-of-a-kind novelties such as doujinshi printing, promotional goods, and original T-shirts for individuals. An extremely sophisticated tracking system is required to ensure that made-to-order products are delivered to individuals without errors.
3. Background and main trends of manufacturers moving to B to C (D2C)
① Improve gross profit margin and acquire price control rights
Since it does not go through distribution channels such as wholesale or retail, a large amount of intermediate margin can be cut. The biggest incentive is that you can freely decide your own sales prices and campaigns, and you can secure a high profit margin.
② Explosive spread of EC platforms
With the rise of inexpensive and high-performance e-commerce construction platforms such as Shopify and BASE, it is now possible to start selling around the world in a few days without making a large-scale system investment.
③ Direct acquisition of customer data and product development
You will be able to directly collect and analyze the age, gender, region, and first-hand opinions of buyers using your own database, which was previously left to the store. This enables fast and accurate product improvement and feedback for new product development (agile development).
④ Development of SNS/digital marketing
We have created a platform where you can directly communicate your brand story and commitment to manufacturing on Instagram, X (formerly Twitter), TikTok, etc., and directly acquire enthusiastic fans (ambassadors) who sympathize with you at a low cost.
⑤ Maturation of logistics outsourcing (3PL)
In the past, it was necessary to package products in-house and take them to the post office, but now there are a number of 3PL companies for e-commerce that handle small-lot deliveries, gift-giving, and even fulfillment (from ordering to payment and shipping), allowing manufacturers to concentrate on "making and selling" and overcome the logistics barrier.
B to BCompanies that have been doing business for a single purpose are easily attracted by high profit margins.B to CWhen entering or transitioning to (D2C), the biggest barrier (factor of failure) is likely to be"Building a logistics operation that supports single-piece bulk shipments (piece picking)"and“Customer support specific to individual customers (inquiries, cancellations, unreasonable returns handling)”is.
Particularly in terms of logistics, if part-time employees are forced to manually pack loose products in a corner of a warehouse that used to be moved by pallet, the worksite will quickly become overwhelmed, causing damage to the brand due to incorrect shipments.B to BandB to C's operation is oil and water.When entering the market in earnest,Logistics facility planningfrom the stage ofB to CA strategic decision is required to carve out a dedicated area or take the plunge and outsource the logistics function to a 3PL company specializing in e-commerce.
💡[Special Corner] Definitive differences in B to B, B to C, and C to C distribution center operations
If the transaction format differs, the way things are moved within the center will also fundamentally change.Logistics facility planningIn order to succeed, a dedicated operational design tailored to your company's target area is essential.Let's compare the decisive differences between each site.
🏢 B to B (business-to-business transactions)
■ Packaging and order characteristics:
We mainly move large lots such as pallets or cases. The quantity per order
is large, and the delivery schedule is relatively systematic.
■ Main role of warehouse operation:
Large material handling equipment that efficiently transports heavy items,
such as forklifts, automated warehouses (AS/RS), and palletizers, will
play a leading role.
■ Key points in planning logistics facilities:
Large trucks come and go frequently, so ensuring a wide truck berth and
a wide flow line where forklifts can safely turn and cross is a top priority.
🛍️ B to C (Business to Individual)
■ Packaging and order characteristics:
Even though each order is a very small lot of 1 to 2 items (units), the
number of shipments (number of orders) increases dramatically. Sudden waves
(spikes) caused by sails also occur frequently.
■ Main role of warehouse operation:
The main players are picking carts, digital assortment systems (DAS), automatic
packing machines, and other equipment that process large quantities of
loose products at high speed by combining human walking.
■ Key points in planning logistics facilities:
It is essential to secure a large work space and staffing area for "distribution
processing" such as gift wrapping and flyer bundling, as well as careful
"packing and inspection."
📦 C to C (personal transaction)
■ Packaging and order characteristics:
This is a transaction for a flea market app, etc., and the size and shape
of the packaging is completely inconsistent. Predicting collection is extremely
difficult as it depends on individual listing and purchasing timing.
■ Main role of warehouse operation:
Platform companies do not have their own inventory, but rely on huge cross-dock
terminals (pass-through centers) owned by delivery carriers such as Yamato
Transport and Japan Post.
■ Key points in planning logistics facilities:
Almost no long-term "storage space" is required.It is designed specifically for its ``ultra-high-speed sorting ability,'' which allows the collected uneven parcels to flow onto a conveyor, instantly read their size and barcode with a camera, and sort them by destination at high speed.