Insights

The Threat to Business from Amazon Business

If the stealthy 2012 launch of Amazon Supply was the company’s initial bet on B2B ecommerce, the announcement of the new Amazon Business program means they’re all-in.

This is an interesting, potentially game-changing, development; one that should serve as a wake-up call to B2B wholesalers and distributors that have fallen behind the curve, and a spark for others to speed up the pace of digital transformation. Two things are certain: Amazon sees enormous potential in the B2B space, and they certainly aren’t bluffing.

Amazon Business starts from an enviable position. Beyond the business customer base they’ve built through Amazon Supply and nearly universal brand recognition, they benefit from the fact that many of their potential business end users (i.e. purchasing managers) are already customers of the consumer-facing site and are familiar with the site’s functionality.

But Amazon isn’t satisfied serving up the status quo with a slightly altered logo. They’ve adapted Amazon to serve many business-specific needs. Some of the features of Amazon Business include:

  • A catalog of over 200 million items, 20 million of which qualify for free 2 day shipping
  • Business-only pricing (largely being fought over by 3rd party Amazon sellers) on select products
  • Multi-user/group accounts
  • Purchasing approval workflows
  • Support for purchase orders and tax exemptions
  • Business lines of credit
  • Loaner robotic worker program

That last point isn’t true, but there is probably a team at Amazon working on it.

So, what are Amazon’s B2B competitors to do? Innovate. This isn’t simply a technology issue. It’s about aligning technology with people and business processes to form holistic multichannel/omnichannel commerce solutions that create, or accentuate, a business’ value proposition.

Amazon has the benefit of scale, but to a certain extent they lack the agility to act quickly and can’t deliver the level of hands-on service other organizations can provide. There is also the sheer size of the B2B economy, which offers room for growth for market leaders. So, there are plenty of opportunities and reasons for hope, but the time to act is now.

For more detail on the launch of Amazon Business, and the business drivers behind this aggressive move, read this TechCrunch article.