Here’s an interesting stat for you: B2B E-commerce is expected to hit $1.8 trillion by 2023, but that is only going to make up about 17 percent of all B2B sales. (source: Forrester)
That’s shockingly lopsided. But when you talk to executives at B2B firms, you hear the same thing over and over.
“It’s too expensive.”
“It takes too long.”
“We’re doing just fine with things as they are.”
At least they’re right about two of these points. Building and deploying E-commerce operations can often be very expensive and take a long time to get going. E-commerce websites can cost a significant amount of money to build from the ground up. But that’s just the tip of the iceberg when it comes to developing an E-commerce operation. To properly develop and launch an E-commerce website, firms need to:
Hire the right people
Choose the right technology stack
Developing strategies for marketing, customer adoption, and merchandising
Set up fulfillment
It’s a daunting task, to be sure. But doing the easy thing isn’t always doing the smart thing. As almost anyone (except some of these executives apparently) will tell you, the COVID-19 pandemic has dramatically changed how B2B buyers conduct business.
That’s why building an Amazon presence is an excellent first step to building a firm’s E-commerce muscles. Think about it:
Amazon Business (the company’s B2B volume) reached $30 Billion in sales in 2021 and is on track to reach over $83 billion in gross merchandise volume by 2025.
The majority of product searches start on Amazon (both B2C and B2B).
It turns out that selling on Amazon builds an organization’s E-commerce muscle and knowledge base in a way that requires less time, investment, and risk than developing an in-house operation. It allows organizations to tackle data challenges, digital merchandising, and other essential E-commerce skills in a more controlled, step-by-step manner. What’s more, by selling through Amazon first, organizations can take a crawl-walk-run approach to E-commerce, with Amazon serving as a first step in a long-term E-commerce strategy.
(Side note: It’s important to understand that we are strictly talking about taking the Seller Central, or 3P, approach vs. the traditional 1P (Vendor Central) or wholesale approach. There are many reasons why 3P is more advantageous for most B2B companies, so check out this article we wrote if you want to better understand the differences.)
So, how does Amazon help B2B firms grow their digital muscle? There are essentially four ways.
Amazon already has the infrastructure to allow you to sell your products in an e-commerce-friendly format. They provided a structured way to add images, product descriptions, brand information, etc. in a way that’s already proven. That means you don’t have to reinvent usability, design, etc. What’s more, Amazon is already set up to drive conversions (i.e. purchases). All you need to do is structure your data to match Amazon’s requirements. Following this methodology will build organizational knowledge of how to manage data, which will help you down the line when you want to launch your own digital experience. Plus, you’ll learn more about the features and functionalities Amazon provides, its product search tools, its marketing tools, etc. All of these are essential areas that need to be addressed when deploying E-commerce.
The traffic is already there! As mentioned earlier, the majority of product searches start on Amazon. An enormous amount of buyer interest and intent already exists on Amazon; people go there explicitly to buy! That means that there’s no need to invest in marketing to send traffic to your website.
Amazon’s marketing tools are robust, and you can learn a lot about E-commerce marketing in terms of driving traffic to your products within Amazon that you can apply to your E-commerce website. This mostly boils down to understanding pay-per-click advertising (PPC) but in a more controlled and simpler environment. Once you get the hang of it on Amazon, you can apply that to other PPC systems like Google, where the same model is used in a far larger, more complex ecosystem.
Amazon has fulfillment and operations down to a science. First off, using the Fulfilled By Amazon (FBA) service makes your products prime eligible (a really good thing). Secondly, it’s probably no secret that Amazon offers best-in-class fulfillment around the world, and that sets the expectation for all customers. By learning how Amazon does fulfillment, you’re going to learn what the customer expects and how to meet those expectations in your own business. You’ll see the metrics Amazon uses, how they communicate with the customer in terms of order status, and how quickly they deliver. To be frank: these are all bars you’ll need to meet in your E-commerce operations.
Finally, it’s essential to understand that setting up an Amazon presence takes a fraction of the amount of time needed to set up full-scale E-commerce operations. By using Amazon as your first step into B2B E-commerce, you’ll be getting your organization used to doing all the things you’ll need to do in a homegrown operation. Use that time wisely and you’ll get more out of it than a growing sales channel; you develop the organization muscle to build, deploy, and deliver a digital shopping experience that’s entirely your own.
If you’re ready to take the plunge into Amazon, or if you have a few questions, we're here to help! At Enceiba, all we focus on is helping B2B companies succeed on Amazon. Feel free to contact our Managing Partner, Brian Beck, directly by email at firstname.lastname@example.org. We're happy to listen to your challenges and help you think through a strategy that will ensure your E-commerce success.