Amazon Tries for B2B Again

If at first you don’t succeed try, try, again…

Amazon this week announced its "new" Amazon business. The service offers B2B level ecommerce to any qualified business. If that's sounds vaguely familiar it is. Amazonsupply.com was launched back in 2006 after the acquisition of smallparts.com. That was Amazon’s initial entrance into the world of B2B ecommerce.

Unfortunately, the specialty site never really gained traction as a true B2B site when compared to its primary competitors, Grainger, ULine, Global Industrial, etc.

To put these numbers in context, Amazon.com had 2.4 billion visits during this same time period. Therein lies the problem.

It's important to note that Amazon has been successful growing B2B sales, just not Amazonsupply.com. Industrial and Business categories have grown double digit for the last several years.  Yeoman's B2B clients have seen doubling and tripling of sales over the last 5 years.

The reality is the sales of industrial and B2B goods are being done on Amazon.com not the specialty site. This week's announcement just shows that Amazon figured this out and opted to consolidate the site under the Amazon.com umbrella.

The change is more than just a simple facelift.  They did update the program to fully leverage Amazon's strengths in several key ways:

  • More 3rd party merchants: This is a huge change. The majority of the Supply products were direct purchases by Amazon. 3rd parties account for 30-40% of Amazon’s total volume and often have specialty items that Amazon won’t stock. There are strict requirements to enroll, but Amazon is dangling a lower commission rate to bring in more users
  • Different Price Levels for business products: Amazon is a bit unclear at this point, but a B2B client may be able to buy products at better pricing than consumers. They won’t be supporting the traditional tiered pricing or standard discounts any time soon but it’s a start
  • Updated site interface with better product comparison options that are different from the traditional amazon.com comparison.
  • A new set of integration APIs that can tie purchases into back-end ERP systems.

The old features that B2B folks loved will remain – phone support, PO support, limits by user, and corporate credit.

Should your Company be involved? If you’re a B2B manufacturer the answer is simply – yes. It doesn’t matter if you love or hate Amazon, they have the volume of potential customers that you need a strategy for. See Yeoman’s “Why Amazon succeeds” analysis.

Companies should have already had an Amazon strategy even if you don’t sell direct. Contact us via the options on the right. Let's get started.

 

 

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Comments

  • FYI – The Amazon business accounts now supports direct integration into the following:  Ariba, Birch Street, Coupa, Elcom, eRequester, ESM-Solutions, Infor, Ivalua, jCatalog, Oracle (Fusion and iProcure), SAP, SciQuest, Spendbridge, Spendmap, Verian, and Vinimay.

    That's a very fast ramp up! 

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