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Amazon: Open for Business

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Amazon: Open for Business

On January 30, Amazon Business held a 30-minute webinar entitled “Selling on Amazon Business:  The Right e-Commerce Strategy for You?”  According to host Colin Puckett, Head of Seller Marketing at Amazon Business, the 30-minute webinar — the first of a series of webinars that will highlight different aspects and features of Amazon Business – was designed to help distributors and manufacturers understand how e-commerce, and specifically the Amazon Business marketplace, can help expand or grow their business.  Though Amazon declined to reveal the physical number of participants who attended the webinar, Puckett confirmed for tED magazine that “we are very pleased with the engagement from prospective sellers.” Following are highlights of the webinar:

The Opportunity
Puckett said that business customers expect a consumer-style experience when they’re buying for their organizations and that Amazon currently has access to over one million business customers across such important vertical segments as commercial, healthcare, government, education, and more.  In addition to constantly innovating on behalf of business sellers to delight their customers, Puckett confirmed that Amazon offers a great deal of support and deployment options to help prospective sellers incorporate Amazon Business into their existing infrastructure.

Puckett shared Forrester Research data which forecasts that the U.S. B2B e-commerce opportunity will grow from $889 billion in 2017 to $1.2 trillion in 2021, a 7.4% CAGR.  According to Puckett, the B2B opportunity is growing because e-commerce “is where customers are headed.”  Customers are using the model to grow sales and brand awareness and need to adopt a digital transformation initiative “because legacy channels aren’t driving revenues the way they did in the past.”  More and more businesses are opting to participate in e-commerce based on pressure from both their own customers as well as from competitors who have adopted e-commerce/digital channels.

Puckett explained that adopting an existing third-party marketplace solution like Amazon Business is much easier and less time and capital-intensive than building and promoting your own proprietary digital sales channel; using Amazon Business enables businesses to start selling quickly to an already-existing customer base.

Puckett said that Amazon Business is a familiar Amazon experience – e.g., products supported by detailed specs, price comparisons, business-specific pricing, user reviews, shipping preferences, etc. – all optimized for businesses.  According to a Forrester report, 92% of B2B buyers use Amazon to research business purchases and 82% have made a purchase on Amazon for their business, revealing that they’re comfortable with the experience and shopping from the sellers on Amazon.  Puckett said that Amazon Business customers from all sectors have confirmed back to them that feature-rich, customer-centric procurement through Amazon Business can help them better manage and grow their business.

The Model
Puckett discussed three different levels of integration into an e-commerce model – “Seller Central,” “Amazon Marketplace Web Service (MWS),” and “Custom API” – and confirmed that the cost of selling on Amazon Business is a month-to-month agreement for $39.99/month, similar to the fee for Amazon.com sellers, which can be cancelled at any time without penalty.  Sellers will also be charged a referral fee of 8-15% (depending on the product category) against the total amount of each order.

Procedurally, sellers begin their process on Amazon Business by registering for a professional selling account and setting up their products with listing tools (e.g., photos, details, pricing, drawings, etc.).  Sellers can create an enhanced business profile that allows prospective buyers to learn more about them and any special awards or certifications they have; in addition, “while products are discoverable by any consumer, Amazon Business sellers can offer business pricing that’s only visible and available to registered business customers, can add up to five tiers of quantity discounts on their system, and can restrict certain product sales to verified business buyers,” Puckett said of other features available to business sellers.  Puckett also noted that success on Amazon Business is a shared responsibility and a collaborative effort that requires a degree of e-commerce readiness on the part of sellers, who must provide the level of detailed product information that customers expect and meet other performance requirements.

Once customers order from a business seller, fulfillment can be accomplished in any of four ways — by the seller, through “Seller-Fulfilled Prime,” through “Fulfillment by Amazon” (FBA), whereby the seller ships products to Amazon’s fulfillment center and allows them to handle all shipping and customer service, or through some mix of the aforementioned.

Takeaways
In wrapping up the webinar, Puckett emphasized the following takeaway messages:

  • Business customers today want the same great buying experience they have when they shop on Amazon.com and are bringing their consumer behaviors with them to the workplace.
  • Business sellers who are looking to add a new, incremental sales channel to their model or dip their toes into e-commerce for the first time can gain access to more than 1 million business customers by selling on the Amazon Business marketplace.
  • Puckett confirmed that “it’s still ‘Day One’ for us – Amazon Business is just getting started and still improving and refining the experience.”  He added that Amazon Business’s motto is “delighting our customers through empowering our sellers.”
  • Puckett said that the business products most in demand are those items which represent a common denominator across the range of customer verticals – these include office supplies, electronics, IT/computer-related products, food service products, and janitorial/sanitation/MRO products used to maintain facilities.  According to Puckett, “these buyers/organizations all want ways to innovate around their old-school, bureaucratic procurement systems.  Amazon Business will help enable that transition.”

For more information, sellers can visit www.amazon.com/sellingonamazonbusiness.

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Susan Bloomis a 25-year veteran of the lighting and electrical products industry. Reach her at susan.bloom.chester@gmail.com.

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