Insights — Channel Creation & New Revenue Streams — 3 min read
How to Price B2B Contracts as a Consumer Business
B2B pricing is not just B2C pricing with a discount. It requires a fundamental understanding of unit economics, service levels, and the cost of account management.
In short
Price B2B contracts by calculating your base delivery cost, adding a margin for increased service levels and account management, and accounting for longer payment terms and potential contractual risks. Do not simply apply a volume discount to your B2C price; instead, build a pricing model that reflects the total cost of serving a business client, including the administrative overhead of procurement and the capital cost of delayed cash flow.
One of the biggest mistakes consumer businesses make when entering B2B is underpricing. They assume that because the volume is higher, the price should be lower.
While volume does provide efficiency, the cost of managing a B2B relationship is often higher than managing a B2C customer. Your pricing must reflect this.
The cost of account management
B2B clients require more 'hand-holding' than consumers. They will have more questions, they will require more meetings, and they will demand more customisation. This time has a cost. If you don't build it into your pricing, your B2B channel will be a drain on your resources.
Commercial reasoning: Cash and terms
In B2C, you get paid instantly. In B2B, you might wait 30, 60, or even 90 days for payment. This has a real cost to your business. Your pricing must account for the cost of financing that gap, especially if you have to pay your own suppliers or staff before you receive the client's funds.
Validate before you build
Benchmark your pricing against competitors in the B2B space, but do not just try to be the cheapest. If you are coming from a high-quality B2C background, use that quality as a justification for a premium B2B price.
When NOT to do this
Do not enter a price war in the B2B market. If your only value proposition is being the cheapest, you will find yourself in a race to the bottom that destroys your margins and makes it impossible to provide the high-quality service you are known for.
Could your business support another route to revenue?
Evans Channel Creation identifies, validates and builds additional revenue channels from capabilities a business already has — B2B to D2C, D2C to B2B, product to service, recurring revenue or partners — and says so plainly when a channel should not be built. Programme from £1,995 + VAT per month over six months.
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