B2B - what does it actually mean? What do you need to know about B2B?

The B2B model has long been in place during transactions where both parties are entrepreneurs. For some time now, especially in the IT industry, it has been the basic type of cooperation for, among others, programmers, known as self-employment. Find out what characterises this model, what rules apply when you sign a B2B contract, and what are the advantages and disadvantages of this solution!

B2B - what is it?

The concept of B2B-based collaboration has been around in the business model system for a long time. The acronym itself is derived from the English phrase 'business-to-business' and denotes a business-to-business relationship. It is worth remembering that under Polish law (Article 4(1) of the Act of 6 March 2018 - Entrepreneur Law), an entrepreneur is: "a natural person, a legal person or an organisational unit that is not a legal person, to which a separate act grants legal capacity, performing business activity".

According to this definition, running a sole proprietorship gives an individual the status of an entrepreneur and allows him or her to enter into a B2B relationship. This is precisely the situation that arises when an employee performs duties as a self-employed person.

Business models based on business-to-business transactions can be divided into two types based on the markets in which the actors provide B2B services. We distinguish between levels:

• horizontal,
• vertical.

In the first case, the buying and selling of goods or services takes place between entities operating in different industries. The vertical level occurs when the companies transacting business are representatives of the same industry.

What are the characteristics of the B2B business model?

The B2B business model is ideal for wholesalers who, through B2B sales, reach a very large customer base and can generate distribution channels based on firm orders, the volume of which cannot be predicted with the B2C model.

Self-employment, especially in the case of developers and the IT industry, is a very common choice for B2B cooperation. The company that employs developers performs its activities without having to gather all the collaborators in one place, during the same hours, under the rules defined by the Labour Code.

Principles of cooperation based on a B2B contract

If you are interested in this business model, you have probably heard the phrase B2B contract. What is it? How does it differ from an employment contract? The most important principle that must exist in order to speak of a B2B agreement, or contract, is that the parties are strictly defined. Such a contract must be concluded between one entrepreneur and another.

The contract can be signed by a sole trader as well as by a company with a business representative whose legal status is, for example, a public limited company. It must be remembered in this situation that the person signing the contract on behalf of the company must have the appropriate legal authority.

The second important element that arises from the cooperation agreement is that all additional charges are passed on from the employer to the employee. These include, in particular, contributions to pension or disability insurance, or the need to pay taxes oneself. B2B contracts are settled with the employer on the basis of invoices issued by the entrepreneur-employee.

Cooperation on the basis of a B2B contract is also a commitment between the parties, in which the worker can get entitlements to such privileges as are guaranteed to those who perform work on the basis of an employment contract. This is not unlawful. It is also worth remembering that when signing a B2B contract, elements of the employment relationship such as management or place of work cannot be included.

Principles of B2B cooperation

Collaboration on a contractual basis is primarily characterised by the equality of the B2B partners. What does this mean? That it does not matter whether the employer is a company employing 10, 100 or 1,000 people and the other party is an individual on a sole proprietorship.

It is also an important principle of the cooperation agreement that the place and time of performance of tasks on a B2B contract is not specified. What is such a provision and for what reason has it been established? The legislator, based on the provisions of the Labour Code, has established that a condition for the establishment of an employment relationship is the determination of the time and place of performance of the assigned duties. Therefore, when deciding on business-to-business cooperation, there are no such restrictions.

An important element of B2B cooperation, especially in the case of self-employment, is the liability they may incur. By law, a party to a contract is liable for non-performance or improper performance of the contractual provisions with all of its assets.

Advantages and disadvantages of a B2B contract

B2B work differs from the classic employment relationship of performing duties under an employment contract. Leaving aside the individual issue of employee remuneration, operating on a contract basis has both advantages and disadvantages.

In the classic understanding of cooperation on the basis of a B2B contract, the disadvantages of such an arrangement include:

• the need to keep the tax accounts (either by yourself or with the help of an accountancy firm),
• no paid annual leave,
• B2B does not operate a guaranteed employee benefits fund,
• loss of contractual notice period.

Due to the increasing popularity of B2B contracts, provisions are being made between the parties to allow an appropriate pool of fully paid days to be used for leisure purposes.

If you opt for a B2B contract, you can count on advantages such as:

• flexible working hours in most cases,
• the ability to work with a myriad of businesses at one time,
• the opportunity to deduct VAT on products and services that are essential to the business,
• Proportionally higher wages than in the case of an employment contract.

If you decide to function professionally in a B2B business model, you need to analyse your situation in terms of your needs and the individual terms and conditions you receive from your employer and make a decision based on this.

B2B - e-commerce together with InPost

If you are entering into B2B business cooperation in the e-commerce industry, be sure to take a look at the facilities we have prepared for entrepreneurs at InPost. Running such a large company, we know very well how important logistical organisation and process optimisation are. This is why we offer, among other things, the following services:

• Subscriptions for companies - consist of sending a fixed number of packages each month at an attractive package price, and come in several variants;
• Fulfillment - an end-to-end solution for retailers in which we take over the entire packaging process from order receipt, storage and packaging to delivery;
• Advertising - we offer a variety of channels for marketing activities, including, for example, product sampling in vending machines or veneers on Paczkomat® machines;
• InPost Pay - a one-button payment and delivery arrangement tool that can be implemented in an online shop.

But that's not all! Check out the full range on https://inpost.pl/oferta-dla-firm-i-allegro .

Business cooperation offers with InPost - why should you take advantage?

B2B business partnerships with InPost are a big help in optimising your daily tasks. For example, in the case of marketing activities, we take over any technical issues that you do not have to worry about. It is only up to you to design the advertising you want us to place on our Parcel Machines, website or newsletter.

With us, you will serve your customers more efficiently and quickly, and they will be able to use their favourite forms of delivery and convenient payment methods. This will contribute to their satisfaction with your services. You will order from us not only deliveries, but also returns handling. We work with both market giants and small businesses. If you want to work fully remotely, we will even take over the storage of the goods you sell with Fulfillment.

Handing over some of your responsibilities to us will allow you to focus on devising the next steps in developing your business and building your brand image. Be sure to review the details of our business offers and choose the one that best suits your needs.