B2B or B2C: who pays you?

The difference, simply explained

B2C means business to consumer: you sell to private individuals. A visitor at a market, a neighbor who wants help, someone who finds your online store. B2B means business to business: you sell to another company or an organization, for example a catering company that orders cookies for its office or a company that wants a new logo.

The rules on prices, right of withdrawal and marketing below are our reading, not legal advice. We are not lawyers, so check with the Swedish Consumer Agency (Konsumentverket) and the Swedish Tax Agency (Skatteverket) before you decide.

What differs in everyday work

B2C: selling to private individuals

Customers are easy to find, they decide quickly and they pay right away. But each customer buys a little, prices are lower and you need many buyers. And the law is on the customer's side: consumer laws give private individuals rights that you cannot contract away.

B2B: selling to businesses

Orders are larger and a single satisfied customer can carry a large part of the revenue. Decisions take longer, the customer wants a quote and an invoice, and the demands on you keeping to deadlines are higher. Between companies, what you agree on essentially applies, so the contract becomes all the more important.

What it means for pricing

A private individual buys with their heart and their wallet: the price has to feel right straight away. A business buys with the spreadsheet and calculates what your service is worth to them, not what it cost you to provide. That is why you can often charge more in B2B, if you can show that you save the customer time or money. A website for 3,000 SEK is expensive for a private individual but cheap for a business that would otherwise pay 30,000.

VAT also differs. The price you show to private individuals must be the total price, with VAT and all fees included. To companies, the price is normally stated without VAT, since a VAT-registered company deducts the VAT; in that case, state clearly that VAT is added. A company that is exempt from VAT does not charge any VAT at all.

For UF companies

A UF company cannot be registered for VAT and does not add VAT to its prices. The price you state is therefore the full price, both for private individuals and for businesses. A business customer cannot deduct any VAT on what they buy from you, and it is good to say that before the deal is made.

What it means for payment and terms

• B2C: payment directly, with Swish or card. If you sell online or by phone, the customer normally has a 14-day right of withdrawal under the Distance Contracts Act, from the day the item arrived, and you must say so. The Consumer Sales Act gives the customer the right to complain about faults in the item for up to three years.
• B2B: quote first and invoice afterwards, often with payment terms of 30 days. The Distance Contracts Act only applies when you sell to private individuals, never between companies, so a business customer has no statutory right of withdrawal; what is in the agreement applies. You have done the work but not received the money yet, so always get written confirmation of the order. If it is a new and large customer, a credit check may be worth its fee.

If you want to accept payment with Klarna, Swish, card and bank transfer online without signing separate agreements with the bank and Klarna, Mollie is a cheap way: one agreement, one fee per payment and no monthly fee. Swish via Mollie usually requires a Swedish bank account and an organization number. More in Payment gateways.

If you sell services to companies, the customer wants to see that you have F-tax. Write "Approved for F-tax" on the invoice, then the customer can trust the information and does not need to deduct tax from what they pay you.

For UF companies

A UF company does not have F-tax. If you are going to sell a service to a business, ask your UF advisor how the payment should be handled before you send the invoice.

What it means for marketing

• B2C: social media, markets, word of mouth. You reach many people cheaply, but many need to see you several times before they buy. Emails with advertising to private individuals generally require that they have said yes in advance.
• B2B: you only need to reach a few of the right people. Call, email or knock on the door of companies near you; a personal meeting sells more than a hundred posts. But keep in mind that the rules for advertising by email and text message count a sole proprietorship (enskild firma) as a private individual, and then the same rules apply to the mailings as in B2C.

If you will send marketing to private individuals in Sweden, it is important that you read up on what GDPR says. You can read our interpretation of GDPR at the following link: GDPR for businesses.

Example: the same idea, two paths

You bake cookies. The B2C route: sell at a market for 30 SEK each and need to sell 200 to reach the goal. The B2B route: deliver 200 cookies to a company's Christmas fika for 2,500 SEK, one order, one delivery, done. Many companies do both: B2C to learn how to sell, B2B to get revenue.