How Amazon is Investing to Develop the B2B Arm of Its Business
Not content with dominating the B2C ecommerce market, Amazon is also set on planting its flag at the top of the B2B space with Amazon Business.
You’d have to have been living under a rock for the past decade to not be aware of Amazon. Founded by Jeff Bezos in 1994, he chose the name because the Amazon is the largest river in the world, and he wanted to create the biggest book store in the world. Over the following decade, as both the brand and ecommerce as a concept grew exponentially, Amazon diversified its portfolio to include just about every product known to man.
For the uninitiated, Amazon Business is a B2B procurement platform which joined Amazon’s B2C marketplace, Prime, and Web Services, in 2015. Two short years later, the platform had been used by one million customers, signed over 400,000 businesses and 45,000 sellers, and generated over $1 billion in revenue.
Amazon Business was created to address many of the pain points inherent in the modern procurement industry and simplify the entire purchasing process. Traditionally, ahead of making a purchase, a business must carry out various assessments to gauge the suitability of a supplier and negotiate deals. Once a supplier has been chosen, making purchases often requires multi-level approval, form-filling, and other bureaucracy, which can all lead to delays in acquisition.
With Amazon Business, customers gain access to a range of procurement services designed to suit all industries. From Amazon’s legendary product selection and exclusive enterprise pricing, to fast and easy shipping arrangements, flexible payment options, and multiuser accounts.
"We provide easy access to hundreds of millions of products – everything from IT equipment to janitorial supplies – to businesses of all sizes and across industries," said Amazon Business’s Head of Commercial Customers, Martin Rohde.
Keen not to lose its impetus, Amazon Business is investing in bringing a rage of new features to its offering, such as paying by invoice and catalogue curation. A new tool named Coupa Open Buy allows users of the Coupa procurement system to further streamline the Amazon Business purchasing experience by automatically applying an organisation’s spending and budget controls to the process.
This allows users to effectively source products from outside their company’s usual catalogues and reduces the rate of failing to find a required item, and the knock-on effect of non-compliant spending. With Amazon Business, these one-time purchases can be handled compliantly by an employee, without the need to seek approval from higher up the chain.
The Amazon Tax Exemption Programme is designed to give qualifying businesses a further leg up by allowing them to make tax-free purchases from the platform. A simple wizard takes customers through the enrolment process and, once accepted, their tax-exempt account is activated and ready to make purchases within the hour. All products sold directly from Amazon are subject to the ATEP, but, while the service is offered to independent marketplace sellers, they are not required to participate.
"We have our Amazon Business account to mainly take advantage the Amazon Tax Exemption Program," said Amazon Business customer and Chief Executive Officer at The Reviewster Network, Rob Boirun. “So, in addition to getting tax free purchases, we love the program's ease of use in ordering and reordering our most common items. When we run out of printer toner, or other office supplies, we can easily order within a few seconds and the items are in the office two days later."
Amazon Business is clearly set to have a similarly disruptive impact on the B2B ecommerce space as the company’s main arm has had on B2C retail. While this may offer some cause for concern to smaller procurement platforms, it could instead be seen as an opportunity.
Large companies such as Amazon have the infrastructure and investment power to trial new practices and/or technologies, which would simply be too risky for smaller businesses to consider. This allows other brands to sit back and let the big guys see what works – and what doesn’t – before deciding whether to incorporate the innovations for themselves.
The disruptive power and opportunity presented by Amazon Business is set to be a hot topic at B2B Online 2018, taking place this November at the Postillion Convention Centre, Amsterdam.