Internal documents from Amazon Business show the company believes the next three to four years would present a “land grab” in which Amazon would have an opportunity to gain significant share in the business-to-business procurement market.
The report in the Wall Street Journal quoted Prentis Wilson, vice president of Amazon Business, as saying during a court hearing “there is an opportunity to serve this customer segment.”
The comments were made during a hearing before a federal judge regarding the government’s legal challenge to the $6.3 billion planned merger of Staples Inc. and Office Depot Inc.
The U.S. Federal Trade Commission (FTC) has rejected the merger, claiming it would cause too much concentration in the national office supplies space. The FTC’s suit to block the merger has now gone to a hearing that is expected to last two weeks in a Washington, DC federal court before U.S. Judge Emmet G. Sullivan.
Judge Sullivan is considering whether to issue a preliminary injunction to block the deal. The decision may depend in part on whether Amazon is perceived as a potential big player in the office supply business.
Before suing to stop the merger, the FTC rejected a settlement offer that Staples proposed offering to sell its corporate contract business to Essendant for $550 million.
Now Amazon, according to various reports, may be considering buying that segment.
The WSJ report said that Wilson’s testimony was to emphasize that Amazon would not be a large threat to other competitors in the office supply sector.
He testified, according to a separate report in Reuters, that his business had no big corporate customers, did not stock shelves and often did not bid for a customer's business. He added “at this point” Amazon does not negotiate contracts with large business customers.
Wilson's comments appeared to support the FTC's argument that the online retailer could not provide the same level of services as Staples and Office Depot.
Wilson, according to the WSJ, said that Amazon Business, in its early stages, hadn’t always responded when companies sought supply contract proposals, “at least in part because the company wasn’t ready and didn’t have the resources.”
He also said business customers had given Amazon feedback that there were gaps in its services.
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