Why you should sell on Amazon B2B: Amazon Business to Business
When people think of Amazon, they largely think of the consumer site that provides goods. Although Amazon is one of the biggest consumer retailers in the world, it also has a large and growing B2B (business to business) business that many sellers are unaware of. The B2B market is actually much larger than the B2C (business to consumer) market.
The global ecommerce B2B market was valued at over $12 trillion in 2019 and it has grown much more since. This is more than six times the size of the consumer market. With Amazon just entering the B2B market in 2015, the opportunities for sellers to be a part of their growth is monumental.
In less than six years, Amazon’s B2B market (Amazon Business) has generated over $10 billion in 2020. Existing and new sellers on Amazon can join the Amazon Business seller program and start selling to corporate customers. In this blog, we will explore what Amazon B2B is and why it is a huge opportunity for sellers over the next few years.
What is Amazon B2B?
Amazon B2B is also known as Amazon Business. It brings the world-renowned Amazon customer experience to businesses. Many businesses rely on old sourcing methods for their inventory and other business needs. This can include old accounting, product discovery and shipping methods. Amazon provides businesses with business prime, free two-day shipping on many products. Businesses that use business prime have reportedly saved $1.2 million annually.
Amazon B2B is a business to business marketplace. Both Amazon and third-party sellers sell directly to businesses instead of consumers. This means that the offerings and other values are slightly different from the consumer marketplace. Sellers are able to offer businesses discounts, business pricing, tax exemption and more.
Amazon tailors the business marketplace to meeting business needs. Businesses that use Amazon business can set spending limits for users, get analytics on spending and purchases and get pallet-delivering for products. Since businesses already have a list of preferred suppliers for their operations, Amazon enables businesses to select sellers that business have already purchased from as preferred suppliers. This is a huge opportunity for sellers to get a lot of repeat business.
Amazon Business Ecosystem
The Amazon Business ecosystem is made of two primary programs: the Amazon Business buyer program and the Amazon Business seller program. The Amazon Business buyer program is for enterprises and institutions that are looking to purchase their business needs on Amazon.
Many enterprise clients have transitioned to Amazon Business for their business inventory needs because Amazon digitizes the process, helps them make smarter buying decisions and provides free two-day shipping for products. This is disrupting the global B2B sector and Amazon is using the help of sellers to provide a vast catalogue of products for enterprise clients.
The second part of the ecosystem is the Amazon Business seller program. Amazon is attracting existing and new sellers onto their business platform and enabling them with technology and their fulfillment infrastructure. Sellers that join Amazon Business can expand their sales channels to businesses while still being able to sell to retail customers on Amazon.com.
This ecosystem is a net benefit to both buyers and sellers because they can expand their businesses significantly. Since Amazon business launched, it has been growing extremely rapidly and it has a very bright future over the next decade.
Why sell B2B instead of selling to normal Amazon consumers?
Access to large enterprise customers
One of the biggest advantages of selling directly to businesses on Amazon is you will have access to large enterprise clients. It’s not everyday you have BP and Mayo Clinic buying from your small seller store on Amazon.
This is the type of opportunity Amazon B2B provides for sellers on the business platform. 3rd party sellers sold more than $5 billion just on Amazon business last year. This number will continue to rise as Amazon brings more enterprise clients onto Amazon Business and this makes it even more lucrative for sellers. Since these huge clients are already spending millions of dollars for their business, sellers can get a slice of that budget by offering products directly to them.
Amazon released some of the statistics for their enterprise clients. 55 of the Fortune 100 companies use Amazon Business, more than 50% of all large hospital organizations use Amazon Business and over 40% of the most populated local governments use Amazon Business. These statistics highlight just how important Amazon Business is to the overall success of Amazon.
The B2B market is larger than the B2C market globally and this can be a very lucrative opportunity for sellers to reach B2B customers. Amazon Business generates less than 5% of Amazon’s total revenue; it has the potential to rival Amazon’s consumer ecommerce operations.