What is B2G eCommerce? with Examples of Businesses
B2G is a rare term that often appears in the group of B2B-related terms. So is B2G e-commerce a sales model through online channels or not? Let’s explore more about B2G e commerce features and operation, its advantages and disadvantages, and some standout examples.
What Is B2G ECommerce
Also, check out B2B eCommerce & other sale models HERE!
B2G stands for Business-to-government, implying the relationship between a business to government agencies and government institutions. B2G is defined as a sales model when companies sell products, services and information to governments or government agencies (such as federal, state, or local agencies).
It should be noted that the B2G ecommerce model has the same definition as B2A (business-to-administration). Both the abbreviations refer to the enterprise specializing in distributing products and services to the state.
B2G is a significant chunk of business. In 2020-2021, the U.S. federal government alone spent around $18.2 billion to $42.6 billion per day.
How Does B2G Ecommerce Work?
Unlike other sales models, the B2G ecommerce model is complex and requires strict compliance with business laws and conditions due to government agencies’ supervision and intervention.
In most cases, the state agencies will prepare pre-negotiated contracts, put out tenders, and ask businesses to participate in bidding.
Businesses that meet the government’s strict requirements will now calculate the fee and make the project’s pricing submission. Then, the government will review and select the most suitable enterprise and decide to sign a B2G contract with them.
Advantages and Disadvantages Of B2G Ecommerce
Government agencies take more time than private companies to approve and begin work on a project. All those regulations can drag on the efficiency of the contracting process.
While government contracts involve a lot of additional paperwork and time, there are some advantages to working with the public sector.
Government contracts are usually large and more stable than similar private-sector work. And a business with a history of successful government contracting can get the next contract easier.
Features Of B2G ECommerce
HAVE YOU KNOWN B2E eCommerce?
Most wholesalers have problems dealing with government businesses. Regarding the cause, there are two reasons:
- Enterprises are not familiar with the way government enterprises work and are heavily involved with regulations and legal documents. As a result, they become confused and time-consuming to get used to the process.
- Government agencies often have a slow process, which is more time-consuming for tasks than private businesses. The reason is that their decisions need to strictly comply with the rules and regulations before they are passed.
However, B2G e commerce transactions through online platforms also have positive aspects, including:
- Thanks to online transactions, transaction times are significantly reduced. In the past, government agencies were time-consuming due to the paperwork involved in the process. Now, many governments’ data systems have been converted to digital storage.
- Besides, B2G transactions via ecommerce often bring significant profits for businesses if the bidding is successful. The value of projects to the government is usually tremendous and more stable than private projects (due to their rigorous censorship standards).
- In addition, B2G businesses with many previous successful B2G projects with the government also have more opportunities and a high chance of winning bids.
Top B2G ECommerce Examples
The majority of B2G businesses are private companies in various fields ranging from machinery, electronic equipment, infrastructure to weapon trading or military defense systems development.
A B2G business can be as modest as a small IT business supporting services to a town government. Or, it can be as big as the Boeing company, the business that builds helicopters, fighter jets, missile defense systems and surveillance aircraft, etc., for the U.S. Department of Defense (DoD).
With ecommerce, B2G businesses are mostly from the fields of electronics and telecommunications and infrastructure.
Senseware is an internet solution service provider, with the main product being a complete IoT Technology Stack. In detail, Senseware’s service provides modular connectivity for the digitization of assets in the physical environment.
2. Archer Soft
Archer Soft is an electronic services company providing digital data conversion solutions for healthcare, automotive and the financial sector. The company also includes software architecture and features development services.
Mark43 is also a company specializing in providing technology solutions. Their most successful B2G mission was to optimize the police cloud data system, allowing them to process data more quickly.
Those are some highlights of B2G e-commerce. Hope it helps!