---
title: "B2B E-commerce: Burning Money Won't Build Loyalty"
description: "I was the first to propose that B2B e-commerce should not burn money, because burning money in the B2B sector cannot create stickiness; the C-end logic of burning cash does not apply to B2B. In e-commerce, burning money either builds a platform that centralizes traffic, like Taobao and JD.com, or it builds stickiness that makes customers return or depend on the service. In C-end e-commerce, including O2O with C-end logic, this approach generally works. However, in B2B e-commerce promotion, many people unconsciously transplant the C-end burning logic and quickly find that not only is the logic wrong, but no one in B2B can afford to burn that much money."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-05-11"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/b2b-e-commerce-burning-money-won-t-build-loyalty-9727d662.md"
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---

# B2B E-commerce: Burning Money Won't Build Loyalty

> I was the first to propose that B2B e-commerce should not burn money, because burning money in the B2B sector cannot create stickiness; the C-end logic of burning cash does not apply to B2B. In e-commerce, burning money either builds a platform that centralizes traffic, like Taobao and JD.com, or it builds stickiness that makes customers return or depend on the service. In C-end e-commerce, including O2O with C-end logic, this approach generally works. However, in B2B e-commerce promotion, many people unconsciously transplant the C-end burning logic and quickly find that not only is the logic wrong, but no one in B2B can afford to burn that much money.

**B2B E-commerce: Burning Money Won't Build Loyalty**
I was the first to propose that B2B e-commerce should not burn money, because burning money in the B2B sector cannot create stickiness; the C-end logic of burning cash does not apply to B2B.
In e-commerce, burning money either builds a platform that centralizes traffic, like Taobao and JD.com. It is said that the internet is decentralized, but in fact, the internet can create even larger centers. Platforms are the trend of the internet era, a result of centralization. Burning money can also build stickiness, making customers return or depend on the service.
In C-end e-commerce, including O2O with C-end logic, this logic and approach basically hold true.
However, in B2B e-commerce promotion, many people unconsciously transplant the C-end burning logic. They quickly discover that not only is the logic wrong, but no one in B2B can afford to burn that much money.
**B2B is Wholesale: Burning Money Can't Be Sustained**
In B2B e-commerce, payments are still primarily cash. Why is that? Because B2B transactions are too large; they are wholesale, with high frequency and volume. Following C-end payment methods would incur too high fees, making it unaffordable. This is a major difference between B2B and C-end.
The same applies to burning money. The transaction frequency and volume in B2B mean that if you burn money, you need a much larger pool of funds than in C-end. Even if venture capital were more aggressive, like in the O2O craze a few years ago, that money would be quickly exhausted in B2B e-commerce. The reason is simple: B2B is wholesale, C-end is retail; they are not on the same scale of burning money. I know of several B2B platforms that burned through a year's worth of C-end funds in just a few months.
**B2B is Wholesale: Burning Money Doesn't Create Stickiness**
In fact, compared to C-end, B2B is more sensitive to policies. This has two implications:
First, as soon as someone burns money, results appear immediately. So some B2B platforms have huge initial GMV because when money is burned, people dare to stockpile goods, similar to past manufacturer promotions where one promotion could achieve several months' sales.
Second, as soon as a better policy appears, B2B customers quickly switch allegiances. In other words, there is no stickiness. Some B2B platforms that have gotten used to burning money now see traffic only when they burn money; without it, traffic disappears. This is like the "promotion dependency" we used to talk about, forming a "burning money dependency."
**Not Burning Money Doesn't Mean Not Spending**
After I proposed the "four no's" concept for B2B, a reader interpreted it well: "Not burning money" doesn't mean not spending; "no subsidies" doesn't mean no policies; "no price chaos" doesn't mean no price changes; "no hijacking" doesn't mean no activity.
I recently said: In the past, I didn't believe in Jack Ma; now I firmly believe in him. This is actually a kind of illness.
Applied to the B2B field, in the past we didn't believe in C-end logic, now we use C-end logic in B2B. In the past, burning money was questioned; now not burning money is also questioned. This is also an illness.
A friend in B2B found a venture capitalist who had previously invested in O2O and said his B2B didn't burn money. The investor simply didn't believe it: "What e-commerce doesn't burn money?"
Making B2B work without burning money is where the technical skill lies. As the old saying goes: "Any problem that can be solved with money is not a real problem." B2B e-commerce is exactly like that.
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