How Amazon is taking over the B2B commerce industry

While Amazon is best known for its B2C capabilities, the e-commerce giant’s latest shift into the wholesale marketplace signals a larger trend of where the industry is headed.

With the rise of third-party platforms like Amazon Business, today’s B2B companies are being forced to adapt. As Amazon Business prompts an increasing amount of businesses to buy its wholesale products online, B2B buyers and sellers must create a robust and streamlined customer experience on par with the B2C world.

While this may seem like a daunting venture, pressure from solutions such as Amazon Business does not mean that B2B businesses need to undergo massive overhauls. Rather, B2B brands can implement smaller, turnkey commerce solutions at a scaled-down cost.

>See also: The ‘rampant fraud’ of Amazon sellers exposed – and is an Amazon employee one of the culprits?

What’s more, by conducting commerce on personalized commerce platforms, B2B companies can provide a much more robust, engaging customer experience than a third-party provider like Amazon Business can.

Having undergone little change over the last decade, however, many B2B brands do not know what to look for in terms of an e-commerce solution. Although there are benefits to selling on Amazon, companies miss out on opportunities for customer engagement and lose insight into critical customer data when they pass off the buying and selling experience to third parties.

Build relationships

In choosing an e-commerce platform, B2B brands cannot afford to partner with a provider or system that cuts them off from their customers. An e-commerce platform is a brand’s representation online, and companies need an interactive experience to engage customers and build long-term relationships.

This becomes increasingly difficult to do when brands forfeit ownership over their own e-commerce platform. When companies choose a solution like Amazon Business as the sole sales network for products, they are forced to relinquish their primary relationship channel with customers.

If Amazon is the interface in which shoppers are buying online, brands miss out on the opportunity to build brand awareness and curate an engaging and powerful connection with consumers.

A disintermediated sales platform also limits brands from gathering a 360-degree view of their customers. If a company itself is not responsible for fostering sales interactions, they are handing vital customer data to a third party on purchase histories and buying behaviors, which in turn prevents them from serving customers effectively.

The ability to advertise, cross sell and upsell based on each customer’s unique needs is a key component of developing brand affinity and loyalty. However, if a company sells through a third party, they lack access to such sales opportunities.

What’s more, they’re likely letting another company sell their products purely from a price point basis. The possibility of upselling is completely lost when brands lack the ability to communicate with shoppers.

Not only do businesses lose control of the sales process when they divert to Amazon for sales, but they also lose access to the rich customer insight that is curated from purchase history and interaction throughout the sales process. Without this data, brands lose sight of their customers, their preferences, and ultimately brand loyalty suffers.

>See also: Amazon opens startup loft in London to help build the next JustEat and Skyscanner

For a distribution channel like Amazon Business, turning inventory over quickly is much more important than building lasting relationships with shoppers. Amazon Business is simply a permutation of its earlier platform, Amazon Supply. And while the former has certainly improved upon the latter – Amazon Business has evolved a basic industrial and manufacturing sales platform into one where many offerings can all be seen in one place.

Amazon cannot provide a quality customer experience the way a company with its own e-commerce platform can. Amazon is focused on pushing SKUs, and the job of making sales content and collaborating with shoppers should rest with brands. Only then can they fully benefit from the sales advantages that investing in e-commerce offers.

Instead of providing B2B sellers with truly competitive solutions, today’s big players often exploit the vulnerable position that B2B decision-makers face by forcing them to choose between a third-party provider like Amazon and an expensive, inefficient e-commerce solution.


Sourced from Chris Dalton, CEO, CloudCraze

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics