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Posted by Andy Hoar on April 30, 2012
For years the cognoscenti have speculated that Amazon would make an official move into B2B eCommerce. Well . . . they’re finally right. Just a few days ago, Amazon launched their first purpose-built B2B eCommerce site called AmazonSupply.
And yes . . . the entrenched and established e-distributers in the B2B space should be worried. Here’s why:
- B2C core assets are very leveragable into B2B. Online merchandising is online merchandising. Logistical support is logistical support. World-class customer service is world-class customer service. And don’t forget about economies of scale and low prices. It can all be extended into this new space. And Amazon’sB2C infrastructure is similar enough to the infrastructure required to sell B2B that Amazon can do it -- and with relative ease.
- Integration with Amazon’s buying process is inherently powerful. By bringing their universal login and one-click checkout to the table, Amazon’s vaunted ease-of-use and frictionless eCommerce will now live fully within AmazonSupply’s B2B offering. Customer behavior will not have to change and the user experience will remain second-to-none. Both are powerful influences.
- Amazon Marketplace is a force multiplier. Now accounting for nearly 1/3 of Amazon’s unit shipment volume, Amazon Marketplace has clearly established itself as a force to be reckoned with. AmazonSupply nicely complements the already compelling Amazon Marketplace value proposition for B2B companies and further expands Amazon's B2B eCommerce story.
- Demand can quickly deepen a catalog. AmazonSupply’s 500,000 SKU strong catalog may be relatively shallow by gold-standard B2B e-distribution standards. But with tens of millions of business owners already buying on Amazon as consumers, as soon as these folks discover AmazonSupply they will demand broader and deeper SKU selection. And they’ll get it.
Which is not to say that Amazon will not face challenges. Shipping small, high-frequency consumer purchases is not the same thing as moving units in bulk on pallets and shipping LTL. In addition, integrating with back-end vendor replenishment systems is no walk in the park. And providing quality domain-specific customer service is hard.
But with over a decade of success moving into new product categories and creating new businesses, Amazon’s latest move with AmazonSupply should scare the B2B eCommerce establishment. Amazon has a history of upending markets, rewriting the rules, and changing the course of whole industries. Their latest move with AmazonSupply is at least a camel’s nose under the B2B eCommerce tent . . . but likely a great deal more.
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