Amazon, the king of B2C is invading B2B. The world’s #1 B2C e-commerce site is crossing over to B2B. The trend began with Amazon’s AWS cloud computing services where Amazon is now dominating. Now AmazonSupply.com is focused on threatening traditional B2B distribution channels.
Think it’s impossible for Amazon to make a robust B2B play? The skeptics once said it was impractical for books to be sold successfully online. Now they own the market. The B2C powerhouse is changing the future.
Why would buyers purchase through distributors when the same thing can be bought from Amazon for less with 1 click? Who can beat the 365 day return policy blasted on their home page?
B2B Marketing leaders have an opportunity to generate new lucrative channels. The purpose of this blog article is to start the conversation with you about the future. My hope is that this article will generate new thinking in marketing around channels. Marketing is in a unique position to guide the executive team in the adoption of B2C channel best practices. At the end of this post, I recommend filling out this Channel Assessment Checklist. It will help answer if you have good reason to investigate your channel strategy.
Recently, Charlie Peters of Emerson and Scot Wingo of ChannelAdvisor discussed this at the BMA Blaze Conference. They debated the impact of B2C trends on B2B distribution and purchasing. Ultimately, their advice was to replicate the B2C experience in the B2B space. If you don’t innovate, B2C may eat your lunch. Avoid a reactive response to new threats.
Should you be worried about Amazon Supply?
Yes – Amazon is a well-funded giant with an insatiable appetite to conquer new markets. Their model allows them to sell aggressive and pressure the competitors on price. Not to mention their attractive free shipping offers. In addition, a 365 day return policy lessens any purchase decision concerns. Did I mention their efficient warehousing and distribution infrastructure? The user-friendly Amazon site is a force to be reckoned with.
This is great – should we use Amazon Supply as a channel partner?
The answer is – it’s time for a channel assessment. Fill out this checklist to get the answer to this question. While Amazon Supply sounds like a perfect channel partner, current customers will be hesitant to change. There are several benefits of selling on Amazon Supply.
- Credibility – everyone trusts Amazon
- It’s already a high traffic resource
- Easy to use – order with 1 click
- B2C personal shoppers become B2B targets in their profession
There are also several disadvantages to think about:
- Current customers already have relationships
- Relying too much on Amazon could hide C Players riding the wave
- Call center will be light on expertise / product knowledge
Key Takeaway:
Marketers may not yet understand the true threat Amazon B2C success brings to B2B. The road to B2B success is fogged with those who ignore Amazon’s methods. Amazon is setting new standards and changing the world. They are enhancing the way buyers buy. B2B must replicate B2C and innovate or be left in the dust. Are you using the channels where your buyers buy? Now is the time to assess your channel strategy, download the Channel Assessment Checklist.
This looks like a good idea from Amazon but again the problem is will they be able to profit. This initiative definitely requires a lot of investment,an exceedingly robust supply chain and a radical website which Amazon can deliver.
Before discussing more on this subject lets look at some of the key characteristics of B2B sales
1) The value of transaction is more when compared to B2C
2) The frequency of transaction is less
3) Companies want to establish long term relationships with each other.
So for firms to switch over to Amazon supply they will have to break their existing relationships with their suppliers, and accept Amazon, which can be dangerous for the company as mentioned in the articles. Plus, firms cannot get customized products as per their requirements which they were getting from their existing suppliers.