Amazon has just announced Amazon Business, a new marketplace that intends to bring the Amazon experience to business-to-business commerce. If you sell or buy (as a business) on Amazon, this is big news!
Some people question the impact Amazon Business will have on small- and mid-level distributors. Others are raring to go with this new marketplace.
This blog post will give you everything you need to know about Amazon Business, so you can adjust your business strategy accordingly.
What is Amazon Business?
Amazon has completely changed how consumers shop online. They are more or less the de facto standard for an online shopping experience. Products are easy to find, shipping is cheap and fast, and Amazon manages (therefore guarantees) a good customer experience.
Amazon Business is their attempt to replicate this model for B2B buyers and sellers.
For the business buyer, Amazon Business allows you to find the right suppliers and buy your products as a business would (e.g. in bulk). If you’re a seller, Amazon Business gives you a new channel for B2B sales–just like third-party merchants can sell on Amazon Marketplace. Amazon Business also includes extra features that are necessary for B2B selling, like account management and multi-user support.
Key Features of Amazon Business
The following are some of the key features Amazon Business touts:
- Assistance selecting the business from which you buy, including attributes like “minority-owned”
- Business only pricing, so you don’t have to buy as a business at consumer price points
- Free shipping on most orders $49 and over
- Order approval workflows and multi-user support
- Purchase order number association with Amazon Business orders
- Product browsing and search customized to your business type
Again, Amazon provides this all in addition to the familiar Amazon buying and selling experience on the consumer marketplace.
What happened to AmazonSupply?
Amazon Business isn’t Amazon’s first foray into the B2B world. In 2005, they planted the seeds for AmazonSupply–a more stripped down marketplace for B2B buyers–when they acquired SmallParts.com. AmazonSupply remains in beta, and along with the announcement of Amazon Business, will be no more.
When Amazon started making B2B moves, it was a big deal. Forbes even described it as, “[Bezos’s] most disruptive move yet.” Time will tell, but it appears Amazon is ready to go all-in pursuing that disruption.
Jeff Bezos’ stealthy foray into the unsexy world of B2B distribution is likely his most disruptive move yet.
AmazonSupply carried a smaller assortment of products. It also required that all items be sold first-party–meaning you bought from Amazon. It was a first iteration of what is now Amazon Business, and it was probably an experiment to see if Amazon could make this work. (I won’t claim to know Jeff Bezos’s thoughts, though.)
Along with the Amazon Business announcement, they stated that as of May 14, 2015, AmazonSupply would be absorbed into Amazon Business. In other words, Amazon Business is their B2B strategy moving forward.
Pros and Cons of Amazon Business
Like many sellers, you may be wondering whether you should include Amazon Business in your strategy. Consider the following pros and cons of using the service.
Buying from Amazon Business
Buying materials and supplies to operate your business probably doesn’t come very high on your list of strategic initiatives. Yet, it’s a necessary part of operating many businesses.
You may have a procurement person/team to handle these tasks on your business’s behalf. If you’re a small business, you may do it all yourself. In either case, purchasing from Amazon Business can add efficiency to the supply side of your business.
These are the advantages of buying from Amazon Business:
- Find all/most of your products in the same marketplace
- Vet out suppliers that you want to buy from
- If you standardize on Amazon Business, you can use it to manage your approval workflows for purchases.
- Potentially save on shipping (free for most orders $49 and over)
But, also consider these disadvantages:
- Amazon Business may not always have the best price.
- The approval workflow processes and order tracking within Amazon are isolated from the rest of your systems.
- The wholesale market is broad–Amazon Business may not have everything you need.
Selling on Amazon Business
With Amazon Business, they’ve opened up the marketplace to third-party sellers. In other words, you could sell B2B through the Amazon Marketplace, much like you can do (and maybe are doing) on the normal Amazon marketplace.
Some of the advantages to selling on Amazon Business include:
- Access to a huge (and growing) market of business buyers–now separated from the consumer marketplace
- Integration with your existing seller account–switching over appears quite easy
- You can entice more buyers by advertising your seller credentials
- Take advantage of Amazon’s infrastructure and business credit options
But, some of the disadvantages are:
- Cost to sell on Amazon Business is currently the same as a normal seller account, but may be subject to change
- As with any marketplace, your ability to build your brand is limited
- Without proper integration, selling on Amazon Marketplace in addition to other channels can get complex to manage
What To Do Next
Amazon has taken a full step into their next phase of eCommerce innovation, so it’s time for you to consider how that affects your business. Dive into the requirements and features Amazon Business offers. See if you can make it a profitable addition to your business.
We’ll continue to provide advice for Amazon Business in the future, so be sure to subscribe to our blog for updates. (We’ll only email you once per week.)
In the meantime, check out some of our other content about selling on Amazon: