Although the B2B eCommerce market is more than twice the size of the B2C market, but B2B commerce has usually been slower to evolve than its counterpart.
Amazon launched the Business Seller program in 2015, with an eye to capturing some of the $800 Billion B2B e-commerce category. When you consider that offices, healthcare and education institutions, governments, and pretty much every other type of business also have purchasing needs - it’s no wonder that Amazon has created a platform to serve this market.
The Amazon Business Seller Program is great for Sellers as well as for business buyers. Here’s a quick rundown of the core aspects of the program and what type of business it is best suited to.
How Amazon Business works for brands and sellers
Amazon Business is a closed-access program for buyers and sellers - buyers must provide their EIN and are manually vetted to confirm that they are a business entity. And manufacturers or distributors must get an invite to sell on the platform.
Ultimately, the program lets you sell to professional procurement buyers and organizations, rather than individuals. Once sellers are admitted to the program, they can sign up and take advantage of these program benefits:
- Offer Business-Only Price Discounts & Quantity Pricing. List products and prices specifically for business customers. Create discounts for business customers, and discounts on purchases of larger quantities.
- Display your Quality and Diversity credentials. You can list any of your current credentials to increase purchases from procurement specialists who need to meet quality sourcing objectives and corporate social responsibility goals by purchasing a certain % of goods and services from other businesses with these credentials.
- Add Enhanced Product Content. This can be a substantial benefit for technical products, since you can include useful product information including CAD drawings, user manuals, spec sheets, comparison charts, installation manuals and more (more about this in our PDF White Paper).
- Create a Seller Profile Page. You can add banners, logos, and information about your company on this page which is not available to regular sellers on Seller Central.
- Use the The Fulfillment by Amazon (FBA) program, or fulfill customer orders yourself
- Lower referral fees. Referral fees are the percentage-based selling fees that Amazon charges on each product sale. This can be as low as 6% on orders to Business customers, versus 15% in most categories on the consumer platform.
What type of Seller would benefit from Amazon for Business?
The Amazon for Business program has potential benefits both for existing sellers as well as manufacturers and distributors with no existing e-commerce presence. Here are the types of companies who might benefit from Amazon for Business:
- Manufacturers and distributors who specifically serve B2B markets, including: Education - schools, universities and colleges; Medical - dentists, hospitals, laboratories; Food - cafes and restaurants, food production facilities, food packaging; Industrial - raw materials, material handling, protective & safety equipment
- Companies who can't or don’t want to sell to individual consumers. This may be due to the complexity around sales tax collection and reporting, products not being consumer-suitable, or products with a low unit price that need to be sold in bulk.
- Sellers with who have manufacturer and distributor part numbers (MPN/DPN) or National Stock Numbers (NSN) whose customers may be searching for products using these identifiers.
- Existing Amazon sellers who already have their products on Amazon, and whose products could also be used in a business or government context. Products like office supplies, technology devices, educational toys and games, even health & personal care.
How it looks for Businesses who buy from you
Businesses who sign up for making purchases on the program need to provide their Tax ID Number and prove that they are a business entity. This prevents individuals from signing up for Amazon Business.
Once approved, business customers can add authorized users to their account, create purchase approval workflows, and get free Prime shipping on orders over $49. If their procurement policy uses Purchase Orders, they can request these from sellers. Amazon has also started offering lines of credit and other financing offers for Business customers.
Our conclusion: is it worth it?
Amazon appears to be investing in marketing the program to businesses to meet their procurement needs. We see the Amazon for Business program becoming a primary destination for procurement specialists in organizations. It's still "early days" with this program, which means far less competition for brands that take advantage now.
Given that the program comes at no additional cost to existing sellers, this seems like a no-brainer way to extend your customer base and pay less in Amazon fees.
Our Amazon for Business White Paper outlines the program in greater detail, including fees, requirements for sellers, and more. Download the white paper for free.