Amazon Business – B2B e-commerce with the shopping experience
What are the biggest challenges in the B2B market? Speed, reliability, simplicity and reasonable prices. What is Amazon particularly good at? Fast delivery, reliable communication, simple ordering processes and unbeatable prices. As far as delivery processes are concerned, Amazon is on the move by land, air and sea. Amazon has already taken the step from B2C to B2B in the US – now Germany is being considered.
Amazon Business Facts
- Launch in Germany December 2016 with B2B marketplace Amazon Business
- The starter range comprises 100 million products
- 5 million articles on the manufacturing industry and trade
- The number of B2B merchants is not yet known
- The products are offered directly from Amazon
- B2B sales in the US have been running since 2015 – more than 45,000 retailers are online
- External trading partners can make their goods available to Amazon’s business customers (not only manufacturers and wholesalers)
Advantages of Amazon Business from a seller’s point of view (Sell-side)
- Increase in turnover and market share (expansion of the product range for B2B needs)
- Acquiring and retaining new customers through efficient and automated ordering processes
- Personalisation and data collection for personalised offers
- Special Amazon Business Marketing Campaigns
- Wide range coverage for the B2B segment from a box of printing paper worth 1.00€ to large machines such as hydraulics brakes worth 60,000€
- Integration of up to 18 general and separate quality-related information in the offers is possible, for example, ISO: 9001/AS: 910
- Assignment of National Stock Numbers (country-specific product labelling) for customs classification
- Exclusivity – Special offers are only visible to Amazon Business customers
Business models on Amazon Business
Amazon Business Vendor
In this program, Amazon plans directly with the supplier and lists the products in its own stock. Amazon is in principle a wholesaler, which resells the products to business customers via the Amazon Business Platform:
- Invitation only by Amazon
- Suitable for major manufacturers, well-known brands and selected wholesalers
- The supplier is responsible for the product listing selections
- Amazon determines the sales price
- Shipping by Amazon Prime
- Special marketing opportunities
- Higher sales in the vendor program, similar to the B2C segment
Amazon Business Marketplace
In this program, the products are sold by the supplier directly via the B2B platform:
- The provider determines the prices personally
- Independent determination of product listings
- Total control of sales activities
- No contract negotiations with Amazon
- Direct contact with the customer
- Amazon Business is only the provider of the infrastructure
- Variable sales fees and monthly royalties
Amazon Business Marketplace with FBA (Fulfillment by Amazon)
- Sales via the Marketplace with shipping through Amazon FBA
- Products are the property of the seller
- Use of Amazon warehouses
Marketing measures with Amazon Business
Marketing measures also differ from B2C in terms of strategy development. The professional design of the marketing measures is essential for Amazon Business and should be carried out by experts in order to generate better performance and less divergence. It is important for Amazon Business to know the different B2B marketing campaigns on Amazon Business in order to successfully position their own products in these campaigns.
Choose the right B2B advertising strategy:
- Clear structure and systematics across all campaigns
- Appropriate naming conventions
- Detailed keyword analyses
- Optimization of products (determining relevance factors)
- Specification of negative keywords
- Monitoring and selection of products
- Clear targets for sales and costs
- Optimal control of CPC bidding
Content optimization on Amazon Business
Product information differs in B2B and should therefore be adapted to individual needs. Complex products exist in the B2B sector and B2B buyers tend to be more fact-oriented and critical for operational reasons; they like to use videos, product brochures with instructions or product evaluations prior to purchasing. B2B content requires a high degree of individualisation. In this case, it is important to know the search behaviour of decision-makers and business customers and to cover them with a wide range of keywords.
In both B2C and B2B, the purchase process starts with the necessity or need. Only the search for information and the evaluation of alternatives in the B2B segment is more formal and structured or more experienced. It is extremely important to know the difference between the influencing factors and processes and to integrate them into the content.
Advantages of Amazon Business from a business-customer perspective (Buy-side)
- Comparison of several offers
- Invoice purchase for qualified buyers with 30-day payment term
- Companies can access the entire Amazon Business product catalogue through technical integration into their own ERP system
- Millions of products especially for the B2B sector are available within one day
- In the US, it is possible to search via MPN, UNSPSC (United Nations Standard Products and Services Code)
- Only Amazon Business customers can view prices for a variety of items
Application cases for companies of Amazon Business (Buy-side)
Authorized persons or groups purchase for the company:
- Savings for B2B customers through quantity discounts
- Amazon Business Accounts include pricing and volume discounts on millions of products in a wide variety of categories
- Free delivery within 2 days of a purchase priced 29€ or greater
Automated approval processes for purchasing managers and administrators:
- Overview of all participants and groups regarding the approval process defined in Amazon Business Backend
- Administrators can define permissions… As soon as the order total exceeds the limit, the order is automatically forwarded for approval
- Approvals can be determined individually for each person in the company from a wide variety of departments
Define payment methods:
- Administrators can define common and individual payment methods
- Several authorised persons for one account with different access codes
Increased efficiency through automated processes such as receiving invoices or creating payments:
- System Integration Payment
- ERP-system integration
- Supplier consolidation
- Business-only selection
The registration process on Amazon Business
With just a few clicks, you can convert your current account into a business account. A business account on Amazon differs from a B2C account on both the Amazon frontend and backend. When switching to the B2B account, additional persons and groups can be added and receive the respective account rights for account management including account information, order history, addresses, payment methods and personal data.
What effects does Amazon Business have on B2B E-Commerce?
The answer to this question depends on the observer’s point of view: On the one hand, the effects are very small; however, on the other hand, they are gigantic. Why are they small? Amazon itself can best answer this question, as the customer journey from Amazon B2C to B2B can be easily adapted.
- How does the B2B buyer want to be treated – keyword service/loyalty
- What is the purchasing process in general?
One thing is certain, B2B buyers are mature B2C customers and understand the positive and negative aspects of the process, alongside the advantages and benefits of online shopping. Consumerization is the technical term among B2B experts. In other words: the customer in B2B e-commerce also demands a unique shopping experience and professionalism as they have previously encountered this from the B2C area. For Amazon, B2C customers are also B2B customers. They increasingly want to experience the advantages of fast shopping and will expect, in the near future, that they can shop in the evening hours from various manufacturers, wholesalers and vendors.
With Amazon Business, manufacturers and wholesalers can open new customer groups that could not be reached by closed systems. It was only a matter of time before Amazon would offer this unique B2C buying experience on the business side, in Germany as well. Marketing participants who pick up business customers similar to the B2C segment and offer them purchasing as easily and automatically as possible are most likely to succeed. The participants in the B2B market are buyers, decision-makers and managing directors. Purchasing decision-makers look for suitable manufacturers, dealers and service providers for their B2B orders every month. No brand manufacturer should miss the trend. It is recommended to adapt the product range to the B2B sector at an early stage.
The other side of the medal
On the other hand, there will be major challenges and differences in B2C e-commerce.
- What mechanisms does Amazon Business offer to reduce the costs for buyers?
- How can the purchasing process in the company be optimized, which is reflected in a higher profit?
- How do I get the article data of the suppliers into the management system?
- How do I manage to organize the receipt and processing of orders easily?
From the point of view of the B2B customer, this means experiencing purchasing as an overall project. Just a user interface is not sufficient to place an order. The specific B2B processes, depending on company size and industry sector, must be taken into account in the purchasing process. Example: The warehouse employee scans the missing articles in the warehouse, and the buyer orders the missing articles via the ERP system.
Are the typical Amazon advantages compatible with the B2B trade?
A large number of different B2B products requires an ecosystem that plays out the relevant suppliers quickly and reliably. In other words: B2B buyers can only be convinced with sophisticated product search engines and a smooth connection to the internal systems.
- 94% of business customers prefer to conduct prior online research before making a purchase in the business environment
Amazon Business offers new opportunities in B2B trade as well as typical solutions that provide business customers with a high degree of automation.
What functions make Amazon Business so special compared to the B2C platform?
Special features that are specifically relevant for B2B customers on Amazon Business:
- All Amazon Business, customers can purchase with a payment of term of 30 days
- Net prices are displayed on the search results page and on the product detail page
- Value-added tax is shown separately on invoices
- The business account can be divided into several accounts
- Different professional groups and cost centres
- Groups that view payment methods and shipping addresses together
- Individual payment limits and approval rights
- Assign your own order numbers for orders
- Detailed and bundled reporting for purchasing managers
- Overview of purchases and spending by period and department
- Integration of procurement solutions such as Ariba or Onventis (Expenditure & Supplier Management, Management of financial supply chains, E-Commerce & Account Management)
- With a purchase of 29€ or more, business customers receive free delivery
Deals by sector
To be eligible for the promotion, you must have an Amazon Business account. Once logged in with the account, all offers are displayed under Business Deals. Here is the distinction between current, future and expired offers:
- Business deals can be reserved for up to 10 copies per customer
- All other special offers can only be reserved for one copy of the respective article
- Actions have a fixed period of time
Amazon Business Warehouse Deals
- Significantly reduced offers
- Returned offers
- Tested articles
- Free Amazon Prime Premium Shipping
- Opened and used products
- Business deals can be reserved for up to 10 copies per customer
The fact that product search on the internet is increasingly taking place in the B2B sector and that the purchasing behaviour of B2B customers is increasingly being adapted to that of B2C customers proves that the B2B market should not be underestimated and that manufacturers should start planning now. There is no better test run than Amazon Business to identify the B2B market that suits you best to manage products and campaigns.
The B2B platform offers an optimal infrastructure for B2B vendors due to the high level of automation processes and the direct communication option (live expert) between supplier and customer. In this context, entire product portfolios can be marketed to a large extent, thus reaching both small and medium-sized companies as well as groups of companies (desktop purchasing). Not only industry products, but also consumer goods are in great demand at Amazon Business, and exciting questions are arising here:
- Does the B2B buyer really save money when shopping on Amazon Business?
- If special SKUs are released or created, or these are automatically created for all SKUs
- What is the handling of shipping within the EU or worldwide?
- How highly automated can the scaled prices be, for example, uploaded with feed lists?
Amazon Business offers special logins for the B2B area as well as a special view similar to the B2C and shows all categories, especially for Amazon Business users. A further benefit arises from the fact that external trading partners can make their goods available to Amazon’s business customers. So far Amazon has been negotiating with manufacturers and wholesalers via the former B2B portal Amazon Supply, and many business customers are already shopping in the classic B2C platform of Amazon. It’s only a matter of time before the B2B business is completely settled where the target group is. The advantages of being an Amazon Business Seller:
- Access to all Amazon customers + business customers from small businesses to large corporations to institutional buyers
- Ability to extend product offerings to business customers
- Increased visibility of business offers and lower fees for bulk sales
- No additional fees
- Access to shipping through Amazon and standard-activated Europe-wide sales
- Special offers from qualified Amazon Business resellers for increased visibility
- Possibility for business customers to offer special prices, quantities and discounts
- Exclusivity: Vendors can distribute products exclusively to business customers
- Increased sales opportunities through purchase on account
- Invoices can be automatically generated for all orders and made available to the customer
- Automatic display of net prices, where sellers can display and calculate net prices for business customers throughout Europe
Amazon Business promises a lot and has kept its promises thus far. Exciting changes are constantly occurring, so stay tuned!
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Managing Director FACTOR-A/DEPT®
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