Business services are intangible services that help businesses operate and are essential for the smooth functioning of various industries. These include IT, banking, insurance and transportation services. Business services differ from consumer services, which are aimed at the public at large. The main difference is that a consumer service can be bought or used at any time while business services are only available for specific companies.
The business-to-business segment of the service industry has exploded in recent years as firms seek to reduce their management burden by outsourcing noncore functions to service providers. These services range from IT support to marketing and human resources. Companies may also rely on service providers to handle logistics and shipping for them. This sector includes warehousing services that offer value-added functions such as sorting bulk goods into customized lots, packing and labeling products, performing light assembly and marking prices. It also includes freight-forwarding and contract manufacturing services.
A typical business-to-business service model involves a firm paying a fee to access a set of capabilities, programs, projects or work products for its own internal use or to sell to other customers. A service provider may also sell a service as an intangible product that can be consumed on demand, such as computing equipment sold on a utility model with a recurring fee to cover maintenance and management of the infrastructure. Software can also be delivered this way.
Another type of business service involves providing a temporary work agency for other companies that need staffing for specialized or seasonal assignments. This can be done for a number of reasons including meeting regulatory requirements, avoiding the cost of hiring full-time employees or enabling workers to leave the company while still being paid for their work.
There are many different kinds of business-to-business warehousing and storage services, which include providing value-added functions such as picking, packing, order entry and fulfillment, inventory management and control, customer service, integrating warehousing with transportation and logistics, and handling returns and damaged goods. A warehousing service might be offered by a warehouse facility that is part of the supply chain for a product or by an independent firm that acts as a logistics specialist, offering a single point of contact for all related services.
Other business-to-business services include a bank’s ability to provide an easy method of transaction to its customers, such as accepting payments, e-banking and providing a credit line. It could also provide administrative assistance such as processing invoices and preparing financial reports. Finally, it could act as a consultant to its customers, providing advice and recommendations on ways to improve their business. These services can be provided internally or externally, such as through a consulting firm. Some of these firms may even be able to deliver services remotely. This flexibility makes them a popular choice for businesses that want to reduce their costs and focus on core operations.