12 Nov How to Differentiate Your Company from Amazon Business
The Rapid Growth of Amazon Business
We had the pleasure of talking with tED magazine about Amazon Business and their $10 billion approach to working with B2B clients.
Justin King, President of B2X Partners, discusses how Amazon Business has gone from $1 billion in 2015 to $10 billion in 2018, and how surprising and unprecedentedly quick this growth has been.
Amazon Business initially grew from zero to $1 billion in just one year in 2016. Back then, analysts predicted $6 – $7 billion in sales by 2018. “Even those would have been crazy numbers . . . Now that number is on track to hit $10 billion+.”
Amazon’s business model historically focused on three key areas: the traditional Amazon marketplace; Amazon web services, a hosting platform; and Amazon Prime. Amazon Business is a new addition to Amazon’s focus – and already a profitable one.
What Distributors Can Learn
Justin cautions that distributors should be paying attention. They need to make adjustments to compete in a world where more and more large companies are purchasing online, where their preferences and demands are readily heard and responded to.
While Amazon Business isn’t trying to build an “Amazon.com-like experience” for its B2B clients, it is asking B2B customers what they need, and how Amazon can help. Large companies have traditionally purchased through procurement systems. Amazon Business has created built-in integrations for those procurement systems, making it incredibly easy for those companies to shop Amazon.
Going even one step further, Amazon is already working to improve its search feature, another pain point for customers. Through its new Part Finder technology, Amazon customers can now take a photo of an item they need to order. Then Amazon matches that photo to the correct item. No more accidental orders or mistaken product identities. While the technology is currently limited to just a few hundred types of fasteners, you can bet that Amazon is working on developing its data library and expanding Part Finders’ capabilities.
Wrapping up the interview, Justin reiterates the importance of talking to your customers, determining what they want and need, and then doing the things Amazon Business can’t, like using your industry expertise and product knowledge to set your independent distribution company apart.