There are four Risks that are involved in a purchase:
Buying any thing involves risk. The more expensive the purchase, the higher the risk. B2B purchase are a lot riskier than B2C purchase because they are usually more expensive and are typically bought with other people’s money – namely, the company’s. A bad purchase can result in the business being affected.
1. Technical Risk:
Technical risk refers to the risk of product not performing as designed. In a B2B setting, a product that does not perform can be detrimental to the buyer’s business. Even if you are running a small company, there are a lot of things that can go wrong. The printer might break down just when you need to print that million dollar proposal in full color. The email server might go on the blink just as you are waiting for an important email from a client 3,000 Kilometers away.
2. Financial Risk:
Financial risk is about value for money. It doesn’t matter if the purchase is expensive or not. A cheap product may not necessarily be good value for money id it cannot perform certain critical functions or if it is likely to become obsolete really quickly. Sometimes a product that is initially expensive to buy might make more economic sense in the long run because it can be scaled or because it lasts longer. No matter what the purchase is, there is financial risk involved.
3. Delivery Risk:
Buyers are also concerned about whether their supplier can deliver on what is promised. Non-delivery of a product or service could also bring your entire operation to a halt. If you have ever tried to plan a wedding, you are in big trouble. Running a company is not a whole lot different, except that when you get married, it is (hopefully) for life.
4. Service Risk:
Most products, especially commercial or industrial ones, require a lot more servicing support to ensure that they function properly. A factory, for example, runs many types of machines that need periodic maintenance. Buying decisions also involve service risk. Can the vendor be around long enough to provide the necessary after-sales service?