The Amazon Business Opportunity
By Paul Watson, CEO, Volo Commerce
One year after its launch in the US, Amazon Business reported total sales of over $1bn and served over 400,000 businesses. Now the mammoth marketplace is targeting the UK B2B market, estimated to be worth £96.5bn.
But what does this mean for British ecommerce merchants and how can they best exploit this new growth avenue?
The B2B ecommerce market
Amazon Business will shake up the British B2B retail market just as they did in B2C retail – there’s no doubting that.
Every trader will need to shift up a gear to stay competitive, reduce churn rates and attract new customers. Targeted offers will be a critical differentiator between sellers and excellent customer service is a must.
But what currently drives B2B procurement? Just as in B2C, price, product quality and delivery times are the vital factors in business’ purchasing decision.
Remember, procurement managers justify every purchase to their superiors, so each product must be the best option for their company’s needs. That increases the pressure on sellers.
Delivery times also make a significant difference for businesses. In most cases, a consumer can wait a few days to receive their desired item. For a business, even a day can influence the outcome of an important project and make the difference between a successful deal and a failed one.
Many wholesalers have resisted online channels for too long because they believe their business is too complicated or ecommerce is not relevant to their products, but Amazon Business will set new standards for business procurement and change the industry from supply to delivery.
Wholesalers may well have an advantage, with a deeper knowledge of their customers enabling personalised offers and recommendations. However many businesses will quickly see the potential value of Amazon Business thanks to better prices and next day delivery.
Most importantly, many wholesalers still have complicated order systems that are time consuming and require a lot of paperwork. Time-pressurised purchasers who are already familiar with Amazon’s retail experience from its consumer oriented channels may well prefer the easier option.
Amazon Business offers a wide choice of products and price ranges which allow procurement professionals to adjust their budgets on the go and save time when researching multiple suppliers to find the best price.
And considering that by 2020, business-related online purchases are estimated to double in value and reach over $1.1tn worldwide many wholesalers will realise they can’t ignore this opportunity and that expanding operations to Amazon Business will become a must in order to stay relevant and competitive.
For those already selling on Amazon, including the Business channel in their portfolio should be a smooth transition. All they have to do is add the new features to their existing account and start selling.
For those new to trading on Amazon, the process is still simple – sign up for a business account, bearing in mind that any logistics must comply with Amazon’s delivery requirements.
No matter what your experience is with Amazon, keep in mind that B2B buyers are highly demanding and expect the best products and efficient customer service.
Make sure product listings are impeccable and as clear as possible. You’re dealing with people under pressure who need information in the shortest amount of time. They make quick decisions. They will hold you to account to deliver on your promises. This means you cannot afford mistakes. Your audience is not shopping for pleasure and will not forgive blunders - at the end of the day they are the ones who have to report upwards and take responsibility for your mistakes.
Bundles and product suggestions are vital for a successful sales strategy on Amazon Business. Your customers don’t have a lot of time at their disposal to peruse millions of available products.
Make sure your products stand out in the crowd – creating a unique bundle creates a unique listing (ASIN) on Amazon, which means no competition on the listing page. Crucially, this means you own the ‘Buy Box’, through which 80% of Amazon sales occur.
Ensure your suggested bundles are built with those business customer needs in mind. This will increase the average order value and drive revenues. Additionally, you’ll gain their loyalty because your customers now know that they can easily find what they need and rely on your suggestions.
Marketplace commerce doesn’t have a great reputation when it comes to offering personalised customer services and offers. Try to be the one who changes this on Amazon Business. Follow purchasing trends and try to answer shoppers’ needs even before they think about it. It’s worth the effort when you consider that business customers have sizable budgets and a repeat customer can increase your revenues by tens of thousands of pounds.
Another important element is delivery time. Try to adjust and gear up your infrastructure so that you’re able to deliver your products in the shortest time possible. Technology comes into play once more here, and you can use various solutions to increase efficiency and save time when it comes to warehouse management and pick and pack processes. Amazon also offers an extensive network of delivery suppliers that should help reduce the costs and meet delivery expectations.
It might seem challenging to follow these trends and manage listings and stock on several channels. However, nowadays you have a wide range of smart ecommerce solutions available that not only help you orchestrate this complex ecosystem but also provide valuable insights and analytics. That means you cut out the guesswork and make better decisions.
Starting to trade on a new channel can seem challenging, but considering the user-friendly ecommerce solutions that automate most of the processes and provide you with straightforward analytics, combined with the growth potential presented by Amazon Business, online merchants can’t afford to ignore this opportunity.
If you keep in mind the above guidelines you’re bound to have a very profitable journey with Amazon Business (and any other marketplace you might want to expand your business on).
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