Amazon last week disclosed that its Amazon Web Services business made nearly $1.6 billion in revenues last quarter with profits of $265 million, but that is not the only effort the e-commerce, cloud and distribution giant is making on the B2B front. TechCrunch has been told by sources that Amazon is now doubling down on its B2B supply marketplace. The focus will be on Amazon for Business, complete with extra features that will be offered only to registered business customers. Think of it as “Prime for Business.”
According to sources briefed on the matter, as a consequence of this Amazon plans to shutter AmazonSupply, its existing B2B portal for hardware, lab & scientific, health & safety, sanitation and office supplies that Amazon dubs “The store for business and industry.”
One source says the closure of AmazonSupply will happen by the end of this year, with the products that it offers there instead folded into Amazon.com and the bigger Amazon for Business offering, not unlike Amazon’s closure of Endless in the shoe and fashion category and folding that into its Fashion category in 2012.
Aside from our own sources, it seems others have also been hearing similar murmurs of AmazonSupply getting folded into Amazon.com. And in other markets, like India, Amazon is launching B2B supply services doing away with the AmazonSupply brand altogether, opting instead for Amazon for Business.
Whether it’s called AmazonSupply or Amazon for Business, it’s a big opportunity for the company. A Forbes article profiling AmazonSupply and the opportunity of B2B wholesale sales noted that in the U.S. alone there was $7.3 trillion worth of goods sold to businesses according to the last U.S. Census, compared to $4 trillion for retail sales (the area we know Amazon for best these days). “Our goal is to supply everything needed to rebuild civilization,” Amazon notes rather ambitiously on its job openings page for the B2B effort.
The “Prime”-style tier that our sources tell us is being planned — we don’t know what actual name it will have, or whether it will just be called “Amazon for Business” — for registered users will have various perks. They will include special pricing for items; bulk discounts; medical and lab registration; and items available only to business customers (for example, chemicals and medical devices available only for registered hospitals and labs). As with the Prime badge for retail consumers, items with special B2B features will be highlighted in a special color.
And as with Prime, you can imagine more features being added over time. Amazon has been developing a logistics network, for example, that offers next-day and next-hour deliveries. Applying economy-of-scale thinking to that network, it would make a lot of sense for Amazon to expand that network to cover B2B deliveries as well to maximise its use.
To be clear, Amazon had already been selling supplies through its Amazon for Business portal. Running the two sites in parallel, however, has become “a nightmare”, one source said, with B2B teams spending “endless hours” deploying features across both platforms. On top of this, the traffic and sales on AmazonSupply have not been that great.
“The site never really took off, having neither enough features nor enough selection,” a source said. But at the same time, orders of commercial and industrial products from B2B customers kept growing on Amazon itself, and in 2014 totalled somewhere between $800 million and $1 billion. Amazon for Business meanwhile was developing a lot of features that both business customers and suppliers wanted to see, such as credit lines, purchase delegation, sales tax exemption, and centralized billing and invoices.
Today AmazonSupply has some 2.25 million-plus items for sale, but one source says that putting all efforts into Business will help Amazon consolidate and provide more data reporting to keep suppliers delivering “more SKUs” into the mix — to further develop the scale of the operation.
AmazonSupply was originally called SmallParts.com, a company that Amazon acquired back in 2005 and quietly continued to run under its own brand. It rebranded it in April 2012, Amazon notes, because “the name AmazonSupply better reflects the broadening selection as well as the growth beyond the niche markets served by SmallParts.com. AmazonSupply will help meet the unique needs of B2B customers with industry specific products, credit terms, dedicated customer service team and a 365-day return policy.”
To be sure, Amazon seems to get asked enough about a future “Prime for Business” product that it’s included a Prime FAQ in its business portal. In that FAQ, Amazon notes that registered business customers can already use some Prime features, specifically around two-day shipping, if those customers happen to also be registered to Prime, but it’s a slightly confusing crossover.
In answer to a question about registered business customers use Prime, Amazon notes yes, but with restrictions. “Will there be an Amazon Prime program intended for business customers in the future?” another question asks. “The Amazon Business team regularly evaluates customer input and industry trends to ensure features and benefits for registered business customers are competitive. Additional features and updates that further enhance customer experience are added as they become available.”
It is not clear whether Amazon for Business will ever take on one of the key characteristics of Amazon Prime, a fee for membership. (Currently there is no fee.) There is an argument to be made for the relative value of a business customer compared to that of a consumer in favor of not charging a fee: the revenue generated by the former can be significantly higher than that of the latter, more than justifying the perks that users would get for taking Amazon for Business membership.
We have contacted Amazon for a response to this story and will update as we learn more.
from TechCrunch http://feedproxy.google.com/~r/Techcrunch/~3/2ysi1LXfqro/
via IFTTT
Сообщения
0 коммент.:
Отправить комментарий