How Amazon Is Investing in Building B2B Demand
There’s no question about it: Amazon Business, the B2B buying and selling arm of the world’s largest E-commerce store, is big business. In just this year alone, Amazon Business is projected to hit $52 billion in gross sales; and as much as $83 billion by 2025. By then, Amazon could capture as much as 10 percent of all U.S. E-commerce sales.
When we think about what makes B2B selling on Amazon successful, we tend to focus on things like the familiar design, the advertising tools, and the channel conflict management tools. But one thing that we feel is often overlooked is not just the human-centered technology Amazon uses, but how it’s investing in building strategic tools and channels for buyers to buy in greater bulk, repeat purchases, and generally spend more strategically.
In recent years, Amazon has significantly invested in the buy side of Amazon Business, hiring people and building teams to build the buyer base. Amazon actively recruits buyers significantly more than they recruit sellers. Their goal is to show B2B buyers that they can have their needs met on Amazon.
To help with this, Amazon has also invested in developing workflows to accommodate these buyers. For example, Amazon has built buying groups in education, government, and hospitality to make buying easier and products more accessible. Amazon also strategically matches buyers to sellers who can fulfill specific niche needs or when a buyer has a bulk request over a certain size.
And, of course, they’re building tools for these groups as well. Amazon has integrated with all the top procurement systems, which enables products listed on Amazon to also be listed on e-procurement platforms used by thousands of B2B buyers. This saves buyers time, but it also saves sellers both time and money in that they can list products on Amazon without having to list them on several other sites and platforms.
Amazon has also built tools for buyers to make requests for specific products. Once a request is placed, it goes into a system that alerts the buy-side team. Coupled with its automated “request for quote” feature, business buyers can use the Amazon platform for a wider range of needs and get put in touch directly with sellers. This creates a more bespoke sales experience that allows more flexibility and engagement on a platform that is typically more known for its uniform, hands-off shopping experience.
A good example of how these features come together is in the medical supply industry. Amazon offers the ability for buyers in the medical field to submit their licensure to Amazon. Once approved, these buyers can then access product assortment specifically for their specialty. These are typically type 2/3 regulated products and can’t necessarily be found or purchased simply by putting the product name into Amazon’s search engine.
Another example: Amazon participates in abilityone.gov, which is designed to satisfy disability spending requirements at government agencies and other organizations. It does this by qualifying sellers’ businesses as disabled-owned, and then providing a platform for other businesses to access them directly.
As you can see, Amazon is after not just the long-tail spending, but the more strategic spending of larger institutions and government agencies within specific verticals. They’ve developed specific pages for new buyers in specific verticals, such as a page for educational buyers with back-to-school-specials. Amazon has created an entire program (currently in beta) for distributor pricing targeted at the educational market, where school districts, universities, and others in the industry can see special pricing and buying terms.
It’s clear that these investments have paid off and will continue to grow. amazon will continue to invest in finding buyers who need to place strategic, larger spends. And they’re succeeding, with nothing but growth in the near future.