16 Jul Episode 2: Amazon says this business opportunity could make you up to $300K a year… | B2B eCommerce Secrets Podcast
There are new developments (always) from Amazon Business. I’ve started calling Amazon the fourth pillar. In this podcast episode, I focus on some developments at Amazon and some insights from the VP of Amazon Business, Prentis Wilson. Wilson talked on the recent MDM Podcast “Disrupting Distribution” and revealed a lot of the work that Amazon is doing that is in direct competition with mid-market distributors.
I go ahead and break down what Wilson is saying about Amazon’s involvement in B2B eCommerce. Amazon is working on a few key fronts:
- developing their inventory of “long-tail” specialty products
- building their network of suppliers (including small and mid-sized suppliers and minority and women-owned suppliers) and developing tools for their needs
- increasing the B2B customer base, and connecting them with suppliers
- developing e-Procurement tools to work with nearly every standard punchout system
Guys, listen, what Amazon Business is doing today is not as important as what Amazon Business is doing for the future.
So how do distributors compete? Last-mile delivery is becoming more and more important in the distribution process. The grocery chain Kroger’s is trying something innovative with driverless cars. Amazon is starting a contract delivery program. I delve into this and more in the podcast.
Amazon is making inroads – into your customers, into eProcurement, and into delivery. They don’t plan on stopping soon. Knowing this should help you clarify your mission – to offer tools and services that serve your customers. To get more information, find our downloadable worksheet for this episode here: B2Becommercesecrets.com/2
There are a lot of things that I want to share with you on this podcast: best practices, industry insights, introduce you to the best people in distribution and manufacturing, as well as let you know what is going on in the B2C world and the B2B world. And today, I want to make you aware of some new announcements that have happened over the last week and how it applies to your business. Hope you enjoy it.
So a few pretty fascinating things have happened over the last week, and I think it’s important that you know about these. But first of all, so I listened to this fascinating podcast recently from Modern Distribution management (MDM), and the interview was with Prentis Wilson, the VP of Amazon Business. And I immediately – when I listened to this – I got the whole interview transcribed because what he says is really a big thesis behind why I am doing this podcast.
I want to start off by reading a few snippets of what he said. Now, if you go to B2Becommercesecrets.com/2 – that’s episode 2 – you can download a worksheet that has a lot of what I’m going to talk about today in it. It has the links in it, has some of the transcriptions in it, I think you’ll find it fascinating.
So again, this was Prentis Wilson, VP of Amazon Business – VP of Amazon Business – okay, he says:
“When we first launched Amazon’s business, obviously we knew there was a big issue and big opportunity to solve the long-tail needs of businesses. Amazon has a broad range of products as well as a broad range of suppliers, and we simplify the buying experience so we could quickly come in and help our customers solve these needs and be able to help them reach more suppliers.”
So he says, “long-tail needs,” I liken this to the grocery store. So, on a daily basis, you probably visit the grocery store for milk, and eggs, and bread, and things that you need. But, if you want something unique, like a special grass-fed butter or coconut oil or some kind of special beef jerky, you probably might go online for that, right? These other items – the things that you don’t get everyday – are called “long-tail items.” Many distributors actually see more sales and/or more profit in their one-off and unique purchases, and that is what Amazon is capturing.
“One super exciting thing for us as we engage with our customers a lot, and we hear from them, and we stay very much obsessed with their needs, and our customers have continued to push us to expand our relationship with them and now we are definitely broadening our reach to be able to support larger customers with broader numbers of employees through their procurement systems. In doing so, we are actually bringing a lot of these suppliers into the customer’s ecosystem, and that you know we do all the heavy lifting of the e-procurement system engagement. We do all the heavy-lifting of figuring out how to set up payments and payment processing, and we essentially enable all these suppliers – whether they be local or you know, minority suppliers – to be able to reach customers.”
Okay, do you hear what he’s saying? They’re trying to bring suppliers into the customer’s ecosystem: small suppliers, minority-owned suppliers, and allowing customers to have a broader set of suppliers. Another key thing in there – and if you go to the worksheet, actually it’s not just a worksheet, it’s a, you can actually download these slides to be able to use in a presentation to your executive team, and I highly encourage you to do that, it’s got even some of my notes in there as well – he talks about heavy-lifting of the e-procurement system.
Guys, listen, what Amazon Business is doing today is not as important as what Amazon Business is doing for the future. They have built – I think – over 50 integrations to e-procurement systems. So you know that your large customers use e-procurement systems, maybe it’s SAP or Oracle, or some of the other big ones to control their spending. And they require their people to use their e-procurement system to do all their purchasing. That’s what a procurement system is, right? It’s also called an e-purchasing system. Amazon has built integrations to all those purchasing systems. They want to be the punch-out, they want to be – listen to this – they want to be the punch-out of every major system. They want to be the out-of-the-box punch-out for every other major system.
Alright, he continues, we see it coming to fruition and hear from our customers, that it is really solving a big need for both the buying customer as well as the suppliers. What’s fascinating about this interview is that he keeps talking about customers and suppliers, customers and suppliers, solving the needs on both sides of the table. He says, “Our marketplace is geared to simplify the buying experience to help suppliers reach more customers.” And it does both things. He says, “our marketplace is geared to simplifying the buying experience.”
We’re going to talk a lot about this in this podcast. How do we simplify the buying experience? Notice it’s not simplify the shopping experience, your customers are not shopping, they’re buying for their job. And Amazon is trying to simplify the buying experience. Alright, the last part of this:
“We have a whole team, that focuses on improving this supplier experience, so it’s easier for suppliers to work with us [so it’s easier for suppliers to work with us], further improve and grow their spend with customers, bringing more suppliers into the ecosystem for customers so that customers increase their spend with those suppliers. We also focus on customers and there’s a broad range of capability that we make available. For example, you know, there’s improved data analytics – that helps customers view and track their purchases. They can track their spend with minority-owned businesses, for example, and they can track their spending in certain categories, and it just helps them better manage their purchases.”
Listen, everything Amazon does is about being hyper-obsessed about their customer. Some of their customers are suppliers, some of their customers are actually customers that are spending, and they address both sides of the table. It’s a pretty fascinating interview, right? I think you’ve gotta take a couple things from this. You’ve gotta understand the integration with the e-procurement system. Amazon thinks it’s important, I think it’s important, we’ve gotta integrate with our customer’s e-procurement systems so they can punch out to our catalogs, they can find the products that they want, and then they can finish the purchase in their systems. And then that purchase – yes – comes over EDI often, should you be tracking e-procurement EDI systems? Punch-out systems? In your eCommerce business? Absolutely.
I think we also gotta take this idea of supplier and customers. How are we treating our suppliers? How are we enabling our suppliers to reach our customers? And then, of course, how are we hyper-obsessed about our customer? Alright, so again, B2BeCommercesecrets.com/2 if you actually want to get the worksheet that goes along with this, you can download the slides, the slides have all of the quotes from Prentis Wilson. You can use them in your own presentations. It has some of my notes in there as well. But a couple other fascinating things happened this week.
I’m gonna move away from Amazon and then I’m gonna come back to Amazon in just a second. First of all, Kroger announced – Kroger is the nation’s largest supermarket chain – it said it’s teaming up with Nuro, a two-year company started by two-year veterans of Google’s self-driving team to launch a fully driverless delivery service. Last mile, right? Last mile. A pilot is going to be rolled out later this Fall, and in the beginning, they’re gonna start using the self-driving touch vehicles, but they’re gonna be using human-safety drivers to be sure the deliveries are going to be made okay. We all understand the risks associated with this, of course – driverless cars to deliver product for grocery chains.
Listen, I know that last-mile – I know that delivery – is an issue for most of you. You look at Amazon, and you’re like – they’re delivering things in two hours. I mean, in Baltimore, where I live, they deliver product to my house in like two hours, and I can pay a few dollars more and get it within one hour. That one hour is averaging around 38 minutes. So, I can push a button in Amazon and have something delivered to my house in 38 minutes. That is crazy! You’re probably trying to react to this. There’s a lot of ways we’re gonna talk about how you deal with this, but one way to deal with this is through some innovation, and Kroger’s looking at driverless cars to be able to actually deliver. B2BeCommerce.com/2, you’ll be able to see the link there. I think the link might be in the worksheet. But these cars look really really cool. They look like – kinda – a half-Cooper-Minis if you will. Like golf carts, enclosed golf carts, something like that. But what kind of innovation can you use to look at the last mile delivery to your customers?
Okay, the second announcement is about Amazon. Amazon just launched a new business opportunity for entrepreneurs, and the headline on CNBC says Amazon Says this Business Opportunity could Make You up to $300,000 a Year, and Here’s How to get in the Program. First of all, great copywriting, CNBC. I love that – brings people in. Last week – Thursday – Amazon announced a new business. It says almost anyone with enough savings and a desire to be their own boss can do it, and that is, staffing and operating a fleet of delivery trucks for the eCommerce giant, Amazon. The program’s called Delivery Service Partners, and it’s hoping to solve the problem of last-mile delivery. Again, last-mile delivery. With an initial investment as low as $10,000, according to Amazon, an entrepreneur can start a business that hires drivers and leases up to 40 vans to deliver packages from warehouses to homes. The drivers are gonna wear the Amazon-branded uniforms with Amazon Prime logos on the vans and the uniforms, but the businesses will be completely owned by the entrepreneurs themselves. But, you’ll have a contract with Amazon to complete deliveries. By the way, Amazon said, you don’t just have to do that, we’ve already got you deals – third-party deals- on the ability to lease vans, and getting insurance, and buying mobile devices with data plans – they’re trying to wrap this into a nice bow for local entrepreneurs.
Look, the reason I bring these up is because last-mile is an issue. I mean, your customer’s expectations are changing. Where before, they expected things in a couple days, and then next-day, and now we’re looking at 2-hour delivery or 1-hour delivery, and how do you compete with that? There are so many great ways for you to compete with that. I mean, first of all, you too can hire some local $10.99 people that all’s they do is pick stuff up from your warehouse, picks them up from your branch, picks stuff up from your distribution center and deliver it to your customers.
You can do that, you don’t have to own your own trucks, you could hire someone with their own truck or their own car to be able to deliver this. Have you tested that out yet? Maybe it works, maybe it doesn’t. But, the point is, last-mile delivery is gonna be more important. The expectations are changes – changing – and we have to be able to deal with that and do our own innovation to figure out how to best serve our customers. How do we become hyper-obsessed about our customers? Kinda wrapping this back to the beginning. Hey, grab a copy of the slides with Prentis Wilson and the links at B2BeCommerceSecrets.com/2. The only thing I do ask from you is if you do like this podcast if you think it’s got some legs, some potential, would you go to iTunes or Google Play and just like it – ya know – give the stars if you could? Maybe provide a comment. Go to B2BeCommerceSecrets.com, give us some feedback, what do you like? What do you not like? What topics do you wanna have covered? We really appreciate you listening, have a great day.