Amazon has emerged as a powerhouse in the retail sector, influenced by its unwavering commitment to customer satisfaction and relentless innovation. With a user base exceeding 300 million worldwide, Amazon’s dominance in the retail market is undeniable.
Amazon has expanded its influence beyond the consumer market by addressing the growing needs of businesses and organizations for efficient procurement processes. This led to the creation of the Amazon Business platform, marking its entry into B2B eCommerce.
This platform represents a strategic innovation, leveraging Amazon’s expertise and infrastructure to cater to bulk purchasers or business buyers‘ unique needs. Since 2015, Amazon B2B has been offering a comprehensive choice of office supplies and other essential business needs.
Amazon Business is a testament to the tech giant’s consistent commitment to meeting the diverse needs of its customers while driving innovation in the business sector. Should you aspire to engage in the Amazon Business Seller Program, here are key insights, statistics, and trends crucial for your understanding of Amazon B2B.
What Is Amazon Business?
Amazon Business is a platform tailored to serve the diverse needs of businesses and organizations, spanning from local enterprises to multinational corporations, educational institutions, nonprofit organizations, and government entities. Amazon B2B grants access to an extensive list of products, mirroring those found on Amazon.com, but with more focus on bulk purchases and specialized requirements of business buyers.
In a nutshell, Amazon Business aims to introduce bulk purchasers to a multitude of business sellers worldwide. streamlining procurement processes and ensuring access to a wide range of products tailored to the needs of the B2B market.
Benefits of Enrolling in the Amazon Business Seller Program
To engage in Amazon’s retail environment, sellers must create an Amazon Seller Central account. Likewise, would-be Amazon business selling partners aiming to operate within the Amazon Business platform must enroll in the Amazon Business Seller Program to create an Amazon Business account. This program provides various advantages to brand owners operating on the Amazon B2B platform, such as:
Access to Business Customers: The number one reason why business owners should consider becoming an Amazon Business seller is the platform’s customer base. Amazon designed a separate membership program called Business Prime, that Amazon B2B sellers can leverage.
Selling on Amazon B2B gives you access to millions of business buyers, including small businesses, large enterprises, schools, hospitals, and government agencies. These Amazon Business customers have unique needs and purchasing behavior compared to individual consumers, which might fit your business.
Bulk Pricing and Quantity Discounts: Amazon Business also allows business sellers to offer discounts to business buyers in the form of bulk pricing and quantity discounts. By implementing this pricing strategy, you can attract bulk purchasing customers, increasing order volumes and sales.
You can further refine your Amazon Business pricing strategy with the help of an AI Business Repricer to offer quantity discounts automatically across different tiers. Similarly, an AI Repricer can adjust prices as needed to ensure you offer the most competitive pricing to secure the Amazon Business Buy Box.
Enhanced Product Visibility: Products listed on Amazon Business are often prioritized in search results for business-related queries. This increased visibility in the Amazon B2B platform can help sellers reach a broader audience of business buyers actively searching for their products.
Access to Business Analytics: Amazon Business provides sellers with access to analytics and reporting tools. These insights allow sellers to track performance metrics, identify trends, and make data-driven decisions to optimize their Amazon B2B strategies.
Dedicated Customer Support: Amazon Business provides reliable customer support for business sellers, helping them navigate the unique challenges and opportunities of selling to business customers. Amazon Business sellers can receive assistance concerning account setup, product listings, and resolving business-related issues.
Efficient Delivery Services: Amazon B2B sellers can likewise leverage Amazon’s renowned delivery infrastructure. Amazon Business ensures prompt and convenient shipping for business orders through its multiple fulfillment centers and shipping partners worldwide, maintaining the reliable fulfillment service expected by business customers.
Support for Small and Diverse Enterprises: Amazon Business offers small and diverse businesses the chance to showcase their products to a larger market. If you are a qualified Amazon Business seller, you can compete with big corporations and major brands on the Amazon B2B platform.
Global Reach: Initially launched in the United States, Amazon B2B has expanded its presence to several other countries, including Canada, the UK, and Germany, ensuring that business sellers can have access to the international market.
Amazon Business offers a versatile platform for businesses of all sizes to meet the demands of a diverse clientele across various industries.
Amazon B2B Market and Procurement Insights | Key Statistics
Since launching in 2015, Amazon Business has experienced significant development and transformation. With nearly a decade of operation, it becomes crucial to highlight pivotal milestones and essential statistics.
Understanding these Amazon B2B milestones and statistics can provide valuable insights and guidance for Amazon Business sellers, aiding them in navigating the platform’s dynamic landscape and optimizing their strategies for success.
- After it was first introduced in the United States as a platform for business customers, Amazon Business expanded outside the US, branching into Canada, the United Kingdom, Germany, France, Italy, Spain, Japan, and India. (Source: Amazon Business)
- Amazon Business is the shopping destination of major companies, including 96 of the companies listed in the global Fortune 100. Currently, Amazon B2B has over 6 million active customers worldwide, contributing to the 10 billion annualized global sales of third-party sellers. (Source: Amazon Business)
- The Seattle-based company continues to invest in its Amazon B2B platform due to its significant growth potential. In Europe alone, Amazon B2B has seen impressive growth rates, with a compound annual growth rate of 25% from 2020 to 2022. (Source: eMarketer)
- Aside from the US and Europe, Amazon B2B is a popular marketplace in other countries. In particular, about 70% of B2B buyers in India, 47% in South Africa, and 46% in the UAE rely on Amazon Business for their significant procurement needs. (Source: Statista)
Procurement-Specific Insights
Here are significant findings from Amazon’s 2024 State of Procurement Data Report in partnership with KRC Research, providing Amazon B2B participants with more significant insights into procurement.
Top 5 Risks Facing Procurement (Next 1-2 Years):
- Costs and Budgets
- Markets and Supply Chain Volatility
- Security and Technologies
- Politics and Regulations
- Staffing Issues
Procurement Budget Projections:
53% of buyers anticipate higher purchasing budgets in 2024 compared to 2023.
Top 3 External Challenges in Procurement:
- Rising Costs for Purchases
- Preparing for Unexpected Economic Changes
- Working with Suppliers Unable to Support Digital Procurement Needs
Top Priorities in Procurement (Next 1-2 Years):
- Retaining and Developing Existing Talent
- Attracting or Hiring Top New Talent
- Reducing Costs in Purchasing
- Establishing or Refining Procurement Standards Across the Organization
- Building Resilient and Agile Supply Chains
Preferences in Purchasing from Certified-Seller Groups:
- 59% prefer sellers that adhere to sustainable practices.
- 40% favor certified small businesses.
- 39% opt for local businesses.
- 25% consider diversity-owned businesses.
Top 5 Purchasing Categories Business Procurement Handles:
- IT peripherals
- Semi-finished products and components
- Maintenance, repair, and operating items
- Finished goods or products
- Safety products
Important Purchasing Considerations for Buyers:
- The location where the products you purchase originate
- The HR policies and standards of the organizations you purchase from
- The type of transportation used to ship the products you purchase
- The Environmental, Social, and Governance or ESG policies of the organizations you purchase from
- The Diversity, Equity, and Inclusion (DEI) policies of the organizations you purchase from
- The route and the stops that the products you purchase make on their way to your organization
The key insights gleaned from procurement decision-makers and bulk purchasers allow you to make some adjustments favorable to your Amazon business. Additionally, other data relevant to Amazon’s growth and expansion reinforces Amazon’s mission to drive innovation and empower enterprises across the globe.
Amazon Business Embracing the AI Trend
Artificial Intelligence (AI) is transforming procurement, enabling eCommerce businesses to enhance efficiency and drive informed decision-making. Business owners can extract insights from procurement data through artificial intelligence, aiding strategic planning and resource allocation.
To capitalize on these advantages, Amazon has integrated AI technology into its business operations to ensure a seamless and convenient shopping experience for customers and sellers alike.
Amazon acknowledges the significance of the “smart buying era” and its implications for procurement, as emphasized by Alexandre Gagnon, vice president of Amazon Business Worldwide, who stated, “At Amazon Business, we develop scalable solutions for customers and solve their biggest procurement challenges, and I couldn’t be more excited about the evolution of procurement.”
In addition to AI functions designed for shoppers’ convenience, the Amazon B2B program offers AI-powered features to enhance business sellers’ performance. Seller tools such as Amazon Repricer, Business Analytics, Business Guided Buying, and Amazon Business Spend Visibility leverage AI technology to optimize various aspects of sellers’ operations, empowering them to achieve greater efficiency and success on the Amazon Business platform.
AI Integration in Amazon Business
It is undeniable that Amazon Business and artificial intelligence are intertwined, particularly in how AI is utilized to enrich the platform’s offerings and enhance user experiences. Here are several examples of how Amazon B2B utilizes AI
Product Recommendations: Similar to its retail counterpart, Amazon B2B utilizes AI algorithms to analyze purchasing behaviors and preferences, providing tailored product recommendations to B2B customers.
Search Optimization: Amazon B2B also utilizes AI algorithms to understand search queries better, returning relevant results even for complex or ambiguous customer search queries.
Personalization: AI enables Amazon Business to personalize user experiences based on past interactions, preferences, and industry trends.
Supply Chain Optimization: AI algorithms are likewise used to optimize supply chain operations on Amazon Business, helping sellers better manage their inventory and shipping tasks.
Data Analytics: Amazon also provides business sellers with AI tools to help them analyze vast amounts of data generated by transactions on Amazon Business, providing valuable insights into purchasing patterns, market trends, and customer behavior.
Third-Party Integration: Amazon Business offers the option to integrate third-party AI software besides Amazon’s proprietary solutions. This enables business sellers to leverage external solutions to improve their operations, many of which are conveniently accessible through the Amazon Selling Partner Appstore.
Driving Innovation in B2B eCommerce
Amazon Business represents a strategic expansion of Amazon’s services into the business-to-business market, catering to the unique needs of business buyers worldwide. The Amazon B2B platform empowers brand owners and entrepreneurs to tap into a vast market while providing businesses with streamlined procurement solutions.
Driven by a commitment to innovation and customer satisfaction, Amazon Business continues to shape the future of B2B eCommerce, leveraging AI technology to enhance user experiences and drive efficiency. As business customers navigate the evolving procurement landscape, Amazon B2B offers you an opportunity for a seamless and adaptable platform for success.
