Building on B2B Sales With Amazon Business

Amazon Business’ sales accounted for 1.4 percent of B2B product sales on U.S. e-commerce sites in 2020, according to Statista. And although, by 2025, Amazon Business’ market share will grow to 2.4 percent, many B2B companies remain wary of using the online giant for business sales.

Maybe it’s a perception of Amazon as a small-business enemy, or maybe it’s the realization that Amazon was a business saver during the pandemic, but B2B business owners are conflicted over Amazon’s value. And they have thoughts.

In recent surveys, the most common reasons businesses give for not jumping on the Amazon B2B bandwagon are that they think the platform is mainly constructed for merchants to sell directly to individual customers rather than businesses, lack of time, and fear of channel conflict.

Specifically, that using Amazon Business will create a new sales channel that will cause pricing conflicts across their other distribution channels. There is also concern that committing to selling B2B on Amazon could disrupt traditional sales channels or existing eCommerce.

But, even within surveys showing concern, B2B companies see Amazon Business as an opportunity. In a 2020 survey, one of the largest enterprise-level content management systems (CMS), Optimizely (previously Episerver) found Amazon was perceived less as a threat and more as an opportunity—and in many cases as both.

“Forty-six percent of distributors considered Amazon an opportunity, 18 percent of them said Amazon was a threat and 33 percent said Amazon was both. Manufacturers had a similar breakdown with 57 percent/13 percent/23 percent, respectively,” according to Optimizely. “Strategically, B2B companies are aware of the need to move to digital. Forty-one percent of B2B leaders even say that ‘selling direct’ to customers online is their biggest opportunity.”

Let’s look at the reasons Amazon Business might be a smart business—and marketing—strategy now.

According to Shopify, an e-commerce platform that helps small businesses build an online store and sell online through one streamlined dashboard, B2B sales via an online marketplace has three immediate benefits:

Association with an online marketplace’s reputation

“The decision-making process for B2B sales is vastly different from business-to-consumer (B2C). Business buyers need to know they’ll produce a return on their investment when purchasing from you. A marketplace already has their trust, making it easier to convert buyers through the platform,” according to Shopify.

Utilize existing purchasing processes

“When searching for new products, a B2B marketplace is the first port of call for one-quarter of business buyers. Instead of finding and onboarding new B2B customers manually, upload your inventory to those marketplaces to showcase products where new customers are actively looking for them,” according to Shopify.

Reduce operational costs

Online marketplaces, such as Amazon Business, have support services in place, including fulfillment, payment processing, and reverse logistics. According to Shopify, the “reduction in operational costs not only frees up more cash, but time you can invest into activities that don’t scale, such as strengthening B2B customer relationships.”

A benefit of B2B sales via an online marketplace that may be less immediate, but no less valuable, is the opportunity to expand into new markets. Trading on the scale and scope of a global marketplace, such as Amazon Business, and its networks, experience and connections expands with whom and where your sales might develop and prosper.

Other opportunities abound when you use Amazon Business for your B2B sales, including the chance to reinvent your brand. If time and channel conflict are your concern, consider marketing your products on Amazon as a different brand.

Even if the products are the same, are bundled, or are a variation only available on Amazon, creating a new brand name will allow you to access Amazon’s massive customer base and test different products, packages, or pricing without worrying about whether your established sales channels, brands and products will be affected.

There are many types of merchant Amazon listing approaches, including:

• Fulfilled By Merchant Listing
• Fulfilled by Amazon Listing
• Vendor Express/Vendor Central
• Dropship Central
• FBM and VC Cocktail
• FBA and Off-Amazon Cocktail
• Fulfilled by Amazon

The Fulfilled by Amazon (FBA) listing is the most evolved type of Amazon listing and is the best bet for beginners to Amazon’s listing process. With FBA, your business is the still seller, but your inventory is sent to an Amazon fulfillment center. When your item sells, Amazon will pick, pack, and ship your item automatically (for a fee), as well as handle all the tracking, returns, and basic customer service tasks – which can really be a time saver.

Additionally, FBA listing makes your item or product eligible for Prime Service. Prime users buy more often and spend more money, making them Amazon’s most valuable customers. Amazon’s search algorithm also finds FBA items to be more attractive and gives them more clout in searches, so your products will be seen more often and by more potential buyers.

Still need convincing? We get it. The perception of Amazon as a small-business slayer—or at least not a business friend—persists.

According to retail consultant agency Retailbound, listing your products on the Amazon B2B platform is a proven and successful sales strategy because you can:

• quickly and effortlessly reach high-volume buyers.
• offer a distinctive product catalog only available to business buyers.
• have greater control over your seller account metrics by only selling to specific B2B buyers with select credentials and certifications.
• increase conversions and visibility in Amazon Search by including additional documentation for products, including CAD drawings, Material Safety Data Sheets and user guides.

The flexibility of packaging sets or creating brands that can be changed seasonally, the ability to play with pricing, the real possibility of reduced operational costs, and the many types of merchant Amazon listing approaches are among the reasons you should consider Amazon Business as part of your company’s overall B2B marketing strategy to expand sales.

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