After only four years, Amazon Business hit $10 billion in sales in 2018. According to CNBC, that’s faster than the growth of Amazon’s consumer retail and cloud-computing units. Modern Distribution Management, an online magazine, ranked Amazon as the sixth largest industrial distributor in the U.S.
If you sell to companies, Amazon Business should get your attention.
In this article, I will address what B2B sellers can learn from Amazon Business — and how Amazon Business impacts them.
Make It Easy
Amazon Business has focused on providing features that help business customers, including pay by invoice, multi-user accounts, and approval workflows. It also facilitates punchout integrations so that customers add items to their shopping cart and it then “punches out” to their procurement systems to gain the necessary approvals. Amazon supports more than 60 different procurement integrations including SAP Ariba, Coupa, and Oracle Supplier Network.
Amazon allows a company to add people to its account with different permission levels, such as an administrator with full capabilities or as a buyer that can submit order requests for approval.
Amazon Business allows a company to add people to its account with different permission levels.
Customers of Amazon Business can create Reorder Lists (items remain on the list after you buy them) and Shopping Lists (once items are purchased they are removed from your list).
Customers of Amazon Business can create Reorder Lists and Shopping Lists.
Amazon also provides benefits that business expect, such as discounted pricing for higher quantity purchases. And business buyers can set up recurring delivery of office supplies and other consumable items.
Buyers can set up recurring delivery of office supplies and other consumable items.
In short, Amazon Business removes obstacles from the business purchasing process. Amazon Business helps buyers to do their job. It supports customers’ purchasing systems and procurement rules.
Creating Value
In October 2018, Amazon launched Business Prime. Like Amazon Prime, Business Prime offers multiple subscription levels at a yearly fee. All levels include fast and free shipping, but higher levels include spending visibility and guided buying, to designate preferred products for employees to purchase and restrict customers from buying products that don’t meet a seller’s procurement policies. The lowest level, Essentials, starts at $179 per year for up to three users.
Business Prime offers multiple subscription levels at a yearly fee. All levels include fast and free shipping. Higher levels include spending visibility and guided buying.
Business buyers are busy. They want good products at a good price. Tools such as Business Prime provide an incentive to do all their ordering through Amazon.
Sellers on Amazon Business can upload credentials that allow buyers to locate companies owned by women, minorities, veterans, and other diverse groups. This helps businesses that support diversity. It also helps with Amazon’s image.
Sellers on Amazon Business can upload credentials that allow buyers to locate companies owned by women, minorities, veterans, and other diverse groups.
Innovation
A mantra of founder Jeff Bezos is that it’s always “Day 1” at Amazon. In other words, there is no time to rest on the company’s successes. Employees at Amazon are expected to be customer obsessed. Amazon demands innovation and invention from its teams.
It’s made clear in the leadership principles on the company’s career site and demonstrated in its digital commerce offering. Amazon Business continually rolls out new features and tests improvements. Amazon reportedly deploys a code release once every 11.7 seconds. The company constantly tests, measures, learns, and improves — all to deliver a better experience for its customers.
A New World
Wholesalers, distributors, and other B2B companies cannot ignore Amazon and the digital disruption it represents. Amazon and other digital giants are likely already taking your market share and reducing your profits.
If you sell through Amazon, tread carefully. Don’t make it your sole channel. Learn from Amazon and create a digital experience for your customers that makes their life easier.
And, yes, independent B2B companies can compete with Amazon. There is an advantage in being smaller and specialized. You can offer stronger customer service and better subject matter expertise. But that is not enough. You must make ongoing strategic investments in digital commerce that require testing and tweaking — not a static project every few years.