We talk to a lot of B2B manufacturers about selling on Amazon, and not surprisingly, they have a lot questions! Of course, everyone we talk to has used Amazon at least once in their own personal lives; they’re just unsure on how that experience translates to B2B buying and selling.
It’s clear that B2B buying on Amazon is a growing channel that nearly all manufacturers need to contend with at some point. The sooner, the better. After all, Amazon Business boasts more than one million B2B customer accounts worldwide and cleared more than $25 billion in sales volume last year. Smart B2B firms are sizing up their opportunity to understand what their short and long-term prospects are.
Here are five of the top questions we receive from B2B manufacturers who are assessing whether selling on Amazon is right for them.
1. Is Amazon a suitable platform for B2B sales?
This is a surprisingly difficult question to answer without a significant amount of investigation and strategy development. Because B2B products can range dramatically from small electronics to clothing to medical supplies to huge fans with 20’ wingspans, there’s no one-size-fits-all solution.
In our experience, two key factors determine whether a B2B manufacturer should consider selling on Amazon:
Profitability of selling a particular product on the platform;
Ability to devote human and financial resources to developing an Amazon presence and fulfillment program
Amazon Business is not a simple switch that B2B sellers can just turn on and off. Succeeding on the platform requires planning, patience, and precise implementation.
2. What are the benefits of selling on Amazon as a B2B manufacturer?
There are a number of benefits a B2B manufacturer firm can reap from selling on Amazon. Most importantly is growing incremental revenue.
But there are other important benefits such as:
Managing sales channel conflict
Protecting your brand on the world’s largest marketplace (see below)
Tapping into new markets/buyers that would otherwise be unreachable or even unknown to the manufacturer
3. How can I protect my brand and prevent unauthorized resellers on Amazon?
Look up a B2B brand or product category on Amazon, and you’ll likely be surprised at how many resellers there are that you’ve never heard of. For many firms, these unauthorized resellers pose a significant threat, not only to a firm’s ability to sell on Amazon but across all their sales channels. Too often, these resellers undercut other channels by selling below a manufacturer’s MSRP, causing a lot of trouble when relationships with both traditional distributors and sales people find them.
The good news is that Amazon offers a number of brand protection tools, but they’re only accessible for brands that register on the site. Additionally, B2B manufacturers can develop a brand protection program that includes developing a Minimum Advertised Price (MAP) policy.
Check out our B2B Manufacturer’s Guide to Managing Channel Conflict for a thorough discussion on how to protect your B2B brand on Amazon.
4. What fulfillment options are available for B2B sellers on Amazon?
There are essentially three ways in which B2B sales from Amazon can be fulfilled:
Manage the entire fulfillment process themselves, including picking and packing, shipping, returns, and customer service inquiries. This is called Fulfilled by Merchant.
Ship products to Amazon warehouses and have them manage the entire fulfillment process for a fee. This is known as Fulfilled by Amazon.
Hire a third party manage either parts of or the entire fulfillment process. These third parties often have their own warehouses and relationships with carriers, making it an easy option for some merchants.
Of course, there’s also the possibility of running a hybrid model that uses all three fulfillment methods. We discuss these options in detail in this article.
5. Can I handle bulk orders and pricing negotiations on Amazon?
One key concern many B2B manufacturers have about Amazon is how it will affect their sales process, as well as their sales team. Most B2B manufacturers are set up to exclusively ship bulk orders. But sales on Amazon tend to be smaller in scale, which can be difficult for B2B firms to manage at scale.
That said, Amazon has a number of features that are only open to B2B firms, including bulk and tiered pricing. What’s more, Amazon has invested a significant amount of money integrating with the largest procuration platforms, which often includes bulk orders. And similar to fulfillment, it’s entirely possible to approach this aspect of B2B selling on Amazon using a hybrid model.
Figuring out how to sell B2B on Amazon can be tricky, but that’s where Enceiba comes in. We can help your organization develop a comprehensive strategy for selling your products on Amazon Business. Contact us to discuss your challenges.