Amazon, As Usual, Upends ‘Business as Usual’

Today, it's hard to remember a time when Amazon's e-commerce presence didn't exist. Now with Amazon Business, how will the industrial distribution market react to this mature sales avenue?

This article originally appeared in the July/August print edition of Industrial Distribution. To view the full digital edition, click here.

Anna WellsThis is a little embarrassing, but I’ll admit it anyway. When I run a Google search on “Amazon” and images of tropical foliage appear, I realize I’ve almost forgotten that it was a rainforest first. It’s hard to remember a time when this constant in the e-commerce space didn’t exist. I don’t know about you, but I use this website at least once a month, for anything from socks to dog treats. For me, it’s less about avoiding brick-and-mortar, and more about access to choice and information like customer reviews, country of origin, sizing, and more.

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Besides the value I derive from Amazon as a consumer, I’ve taken a personal and professional interest in watching the company develop: Personal, as I find Amazon’s go-for-broke innovation strategy to be fascinating, and professional, as Amazon started sniffing around the MRO market in 2012 with its beta test site, AmazonSupply.

As many of you know, Amazon upped the ante in late April of this year when they announced the launch of a B2B e-marketplace dubbed “Amazon Business.” In short, Amazon Business creates opportunities for both buyers and sellers of industrial products. For the buyers, Amazon says the site allows for the “convenience and value customers have come to know and love from Amazon, with new features and unique benefits tailored to businesses.” Additionally, customers of the new outfit will be privy to free two-day shipping on tens of millions of eligible items, multi-user business accounts, approval workflow, payment solutions, tax exemptions, dedicated customer support, and much more.

As sellers, the marketplace puts you in a direct line-up with your competition, yet allows for access to a mature marketplace of customers. For some industrial suppliers, joining the marketplace will remove the e-commerce barrier, and provide access to new end users, geographies — the whole ball of wax.

Jack Keough and I spent some time chatting on the day Amazon Business was announced, and we both wondered what this would mean for the average distributor in our space. Would distributors embrace the Amazon Business marketplace as an additional sales channel or would they be cautious? Would they begin to place heavy emphasis on value-added opportunities, and how would they get the message across to their existing and new customers that they were more than just sellers of products?

I have a feeling I know the answers to some of these questions, but would love to hear from some of you. We’d be willing to keep your thoughts completely anonymous, but we’d love to know – Do you plan to use Amazon Business? Why or why not? Do you see it as more of a threat, or more of an opportunity? Email me at Anna.Wells@advantagemedia.com.

Regardless of your viewpoint here, one thing is for certain — we’re facing new and unique challenges at every turn. As Jack Keough pointed out in a recent column for www.IndDist.com, “Distribution is changing rapidly and your company can no longer afford to do ‘business as usual’ as more competitors enter the industrial marketplace. What worked yesterday may not work tomorrow.”

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