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Say hello to Amazon Business, good-bye to AmazonSupply

April 28, 2015 05:00 AM
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There’s a new big kid on the block in B2B e-commerce—new in name at least.

Amazon.com Inc. is launching today Amazon Business, its new business-to-business e-commerce marketplace, matching millions of buyers and sellers with millions of products, says Prentis Wilson, vice president of Amazon Business.

Amazon Business replaces AmazonSupply.com, which the company launched in 2012 and that grew to more than 2.25 million products ranging from janitorial suppliers to metal-cutting tools and industrial equipment. Amazon Business also supplants the Business, Industrial & Scientific section of Amazon.com.

"With the launch of  Amazon Business Amazon is clarifying its positioning in the B2B space," says Andy Hoar, an e-business analyst at Forrester Research. "The realignment enables them to consolidate their B2B assets and simplify their value proposition to B2B buyers."

Amazon is taking what it has learned from its online B2B operations to offer a broader range of products, more useful site search and navigation, personalized content based on a buyer’s transaction history and business category, and more services for both buyers and sellers, Wilson says. 

“We’re looking to reach a more diverse set of customers,” he tells B2BecNews. “We’re looking to bring on new sellers, both large and small, who didn’t think of Amazon as the right marketplace for them."

Amazon Business, at Amazon.com/business, will offer products directly from Amazon itself as the seller of record, in addition to products from third-party marketplace sellers that will have to compete with Amazon for the primary selling position in the Buy box on product pages. Amazon charges third-party sellers a commission on sales ranging from 6% to 15%, depending on the product category and the size of an order, for business sellers selling to business customers, the company says.

For example:

● For consumer electronics, the fee is equal to 8% of total transaction value of up to $1,000, and 6% of value for transactions greater than $1,000.

● For office products, the fee is 15% of value up to $1,000, 10% of value from $1,000.01 to $3,000, and 6% of transaction value of more than $3,000.

● For tools and home improvement products, the fee is 15% of value up to $1,000, 10% from $1,000.01 to $3,000, and 6% above $3,000; for the subcategory of base equipment power tools, the fee is 12% up to $1,000, 8% from $1,000.01 to $3,000, and 6% over $3,000.

● For industrial and scientific products, the fee is 12% of value up to $1,000, 8% of value from $1,000.01 to $3,000, and 6% of transaction value of more than $3,000.

For each product category, Amazon charges a minimum fee of $1.00. When business sellers sell products to buyers who are not registered as business buyers, Amazon charges its separate Selling on Amazon fees for retail transactions.

All buyers who purchase $49 or more in goods from Amazon Business will be eligible for free 2-day shipping.

Scot Wingo, CEO of ChannelAdvisor, an e-commerce services provider that helps merchants sell through such web marketplaces as Amazon.com and eBay.com, has seen a preview of Amazon’s new business-to-business site and says he thinks at least 10% of ChannelAdvisor’s 3,000 customers will want to sell there. Among the attractive features for buyers, Wingo says, are workflow options that will offer control over what each employee can purchase.

“Let’s say ChannelAdvisor buys all their office supplies off Amazon,” Wingo says. “Different users can spend different amounts. An employee can spend $50,000, whereas a CEO could spend $200,000. Companies can create an account at Amazon Business and offer different purchase levels.”

The AmazonSupply.com web address will soon begin to automatically direct visitors to Amazon Business, Wilson says. B2B customers can also use existing features Amazon Prime and Fulfillment by Amazon, a service that lets merchants store inventory at Amazon warehouses with Amazon handling delivery, through AmazonBusiness. 

Among the new features for sellers will enable them to:

● Display with product listings such credentials as ISO 9000 certifications, which state that a company meets quality standards as set by the International Organization for Standardization;

● Set exclusive pricing and product offers for business customers, as opposed to what’s available to consumers who also shop on Amazon.com for retail products. This feature is designed to help companies manage their sales of high-tech products in health care and other fields where sales to consumers are not allowed;

● List products by manufacturer or distributor part numbers, offering their customers another way to search for products.

Features designed for buyers include:

● Creation of business accounts for single or multiple buyers, with designated groups of buyers able to share payment methods and shipping addresses;

● Viewing multiple offers from sellers on a single product page, to compare pricing and the seller ratings that Amazon issues sellers for service and quality;

● Integration between Amazon Business and a buyer’s procurement software, enabling buying companies to include Amazon among their list of authorized sellers within their procurement system.

Amazon is No. 1 in the Internet Retailer Top 500, which ranks companies by their annual web sales. 

Sign up for a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow B2BecNews editor Paul Demery on Twitter @pdemery.

Nona Tepper, associate editor for B2BecNews, contributed to this report. Follow her on Twitter @ntepper90.

 

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