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An Amazon Check-Up: What Are They Up To Now?

By Scott Costa, Publisher, tED magazine

Like a pretty good number of NAED member companies, tED magazine is headed to the NECA Show this weekend in Seattle.  I can think of a lot of places to visit during my down time.

The Space Needle.
That market where they throw fish.

That's right, it turns out Amazon is more than just an online giant looking to sell everything to everyone.  It's also a tourist attraction.  And when I tried to book a tour of the Amazon headquarters, I found the “Capacity Full” page for the rest of the month.  I guess I am not alone in my interest to be a tourist at Amazon.

Amazon Go

Instead, I will make a trip to the Amazon Go store, which uses the same technology in self-driving cars to allow customers to pick items off the shelf and walk out without having to wait in a checkout line.  I just have to experience that for myself to see how it works, and I have to wonder how we can use technology to provide our customers with a similar, easy experience.

I would expect Amazon to begin using that technology in its still-new Whole Foods stores in the near future.  If you think about it, Amazon would be smart to do it.  First, you need an Amazon account to have the Amazon Go experience, so why not make sure the millions of Whole Foods customers have an Amazon account for their every week grocery shopping?  Next, it's a tactical way to get customers out of their usual habits to try it out and see if they like the idea of not standing in line.

Amazon Business

Amazon's Whole Foods purchase comes as the company reported a worse than expected second quarter earnings report (the 3Q report comes out October 26).  It could have scaled back and focused on the rest of the year.

It didn't.  It expanded some more.

Just last week, Amazon Business (the Amazon B2B spinoff) expanded into India. Amazon said it wants to dominate the small business market in India while continuing to provide B2C best practices to B2B customers.

On September 20, Amazon Business launched in Japan, which will provide competition to a number of B2B e-commerce offerings there.  The expansion means Amazon Business is now in India, Japan, England and Germany, with Amazon planning to put Amazon Business in the other 9 countries already with Amazon.com.

While we still don't have updated revenue number for Amazon Business, we know that it now has more than one million customer accounts in the United States, with more than 85,000 companies supplying products to sell.  I recently talked to Justin King of B2X Partners how he would rate the Amazon Business threat level to our supply chain, and he said it's probably a 1 or 2 out of 10.  But, he also said Amazon Business has put a lot of it's B2B marketplace infrastructure together and has what it needs to be competitive in B2B distribution for a long time.


This is just crazy.  Is that simple enough? 

Imagine announcing you want to create a second headquarters for your distributorship, no matter your size, and every major city in the country puts together an offer that not only provides massive tax breaks, but improvements to highways, airports, and wi-fi capabilities just for you.

That's what is happening to Amazon right now.

From Boston to Chicago to Baltimore to New York and beyond, when Amazon CEO Jeff Bezos announced he was looking for a second city for Amazon's U.S. headquarters, cities began forming committees to lure them to town.

Tucson sent Amazon a 21-foot cactus to let Bezos know it want the headquarters there.  Birmingham is putting giant Amazon boxes around downtown to show its interest.  New Jersey took a more simple route: it's offering $5 billion in tax breaks as a starting point to the negotiation.

We should all be so lucky to be able to go to the town where we are currently headquartered and ask for even a tiny fraction of that.

Faster Delivery/Fulfillment Centers

One thing Amazon is definitely changing in our supply chain in faster delivery times.  It has been experimenting with ways to shorten the wait for its B2C customers for years, and just this week announced that it is launching its own delivery service that will compete with Fed Ex and UPS. 

Those B2C customers are going to expect the companies that work with them on B2B orders to provide the same fast delivery in the near future.  I talked with a large distributor just a few weeks ago, and they are constantly working to improve delivery times, including using their outside sales people to make deliveries within a few hours whenever necessary.

With Amazon continuing to build and open distribution centers in strategic areas, including two in Ohio just this week, they will be able to get products to customers all over the country much more quickly.  Their goal is to provide delivery within hours, not days.

What happens next?

That's a tough question, because you never really know which innovation Amazon is willing to implement to gain an advantage over the competition.  There is no doubt that it will be spending more to meet the needs of its customers.

We can be certain that Amazon Business will continue to live by its slogan, “Everything you love about Amazon. For work.” and continue to use popular and successful B2C practices to recruit and maintain it's B2B customers.

I wish I could get inside the Amazon headquarters in Seattle next week to try and get some questions answered.

Instead, it looks like I will be watching people throw fish.



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