Today, Amazon announced the new Amazon Business in the United States, a revamp of AmazonSupply that’s open to third-party sellers to create a more seamless user experience for business buyers.
In 2012, Amazon eased its way into the business-to-business realm with AmazonSupply — a standalone site dedicated to selling supplies to businesses. AmazonSupply had a number of features designed to appeal to businesses, including business lines of credit. However, it never made it out of beta.
During this same time, Amazon created the Industrial & Scientific category on Amazon.com for third-party sellers to get in on the action, since AmazonSupply was strictly first party. Having two separate sites — AmazonSupply and Amazon.com — likely made the buying experience disjointed for many corporate purchasing managers, who may have had to use one site or the other to purchase business supplies. Amazon Business appears to have solved this problem and has significantly improved the user experience.
Let’s take a look at how Amazon Business will work.
The Buying Experience
An Amazon customer’s log-in information will determine the experience he or she receives on Amazon. To buy from Amazon Business and receive special business pricing and tax exemptions, shoppers will need to create a Business buyer account and register their tax IDs. Multi-user accounts are possible, and groups of users can share payment and shipping information. Amazon Business will allow for the creation of approval workflows to help control spending.
Upon logging in to Amazon using an Amazon Business login, Business customers will see an interface that’s less cluttered, has fewer ads and contains products suitable for business purchase. Product ads will still exist but will be more business-focused.
Amazon Business buyers will see much of Amazon’s product catalog in addition to business-only offers that aren’t available to regular Amazon.com consumers. Certain products will be available exclusively on Amazon Business in larger bundles — sizes that don’t make sense for consumers. Some products will also be made available only to certain types of buyers. For example, medical professionals might be able to purchase medical supplies that aren’t available to other buyers. Further, Amazon Business will be integrated into leading third-party procurement systems.
When searching for products, Business buyers are able to filter listings to see only Business sellers and/or Business sellers with certain credentials.
Amazon will still offer the same business payment terms and invoicing that are available now on AmazonSupply. Shipping will be free on orders over $49, with no Prime membership required.
Selling on Amazon Business
Unlike AmazonSupply, where all products were sold by Amazon, Amazon Business will allow third parties to sell in more than 45 active professional categories. Sellers on Amazon Business must meet certain performance criteria, such as a monthly sales minimum and an acceptable seller rating. Once on board, sellers have access to the following:
- The ability to claim credentials that may be of interest to Amazon Business customers — for example, “Minority Owned” or “ISO 9001 certified.” To see the full list of available credentials, go to Your Info & Policies within your Seller Central settings and select Credentials & Certifications.
- Control over who can purchase their products. With Business Only Offers, sellers can create listings available only to Business buyers (meaning that general Amazon.com customers won’t be able to purchase). Sellers can also set up Business-only pricing in addition to standard pricing.
- Quantity pricing is available to facilitate high-volume orders. Sellers will be able to sell by the unit, case or pallet, for example.
- Amazon Business sellers will have access to Fulfillment by Amazon (FBA).
- Amazon Business intends to roll out a program that’s designed to make it easier for customers to communicate with experts about specific products.
- Many third-party sellers have been invited to register as Business Sellers, and others can start the registration process here.
For now, sales commissions are similar to those on Amazon.com. Amazon indicates that it may implement fees specific to the Amazon Business Seller Program in the future.
We think the move to Amazon Business is a net positive for everyone involved. Instead of having multiple sites for business buyers (Amazon.com and AmazonSupply), the user experience will improve as one login will provide access to the Amazon.com catalog as well as business-only offers. At the same time, Amazon intends to maintain and enhance many of the business-friendly purchasing options that were associated with AmazonSupply, making it even easier for business buyers to use Amazon as a primary source for their business supplies.
And by allowing third-party sellers into the mix, Amazon Business will have many more products than were available on AmazonSupply. As a result, Amazon will become a more formidable competitor to large B2B distributors such as Grainger. While an initial reaction is that this could spell trouble for small- to mid-size distributors, we think it could actually be a lifeline. For distributors without the scale to compete on e-commerce operations or procurement system integration, Amazon Business could be the solution, allowing them to focus on serving customers through product expertise and installation, support and maintenance services.
Over time, Amazon will likely continue to enhance Amazon Business with features and services designed to appeal to business buyers and sellers. And we anticipate that this will eventually be a global program, which will make it a compelling choice for corporate purchasing departments worldwide.