As part of an ever-expanding B2B focus, Amazon Business launched in the UK this year to cater to procurement needs. Head of the service in the UK, Bill Burkland, explained how it has developed.
Amazon Business launched in the UK in April of this year, having been in the US for two years, and now serves more than 90,000 business customers of all sizes – ranging from sole traders and micro businesses all the way up to large multinationals.
There has been a similar reaction in the other countries the service has launched in, including the US, Germany, India and Japan – in its first year in the US it achieved over $1bn in revenue.
“The idea behind Amazon Business is for it to be a marketplace. We want businesses to think about Amazon Business the same way consumers think about Amazon,” Burkland told Real Business.
“We want them to have a high degree of confidence that, if they’re looking for something, they will be able to find it on Amazon Business at a competitive, fully transparent price.”
Essentially, Amazon Business is like Amazon for consumers, redesigned for business customers – half of all units sold on Amazon Business in the UK are from third-party businesses, with more than 30,000 sellers in the UK registering as Amazon Business Sellers.
How did Amazon Business come about?
One of the things Amazon noticed about its user base was that a lot of people were making purchases as individuals, but a lot were also using the service for procurement purposes for businesses.
“Once we noticed that and began to understand why they were buying on Amazon, what they liked and what they didn’t, the idea for Amazon Business came about,” said Burkland.
The service aims to provide a “one-stop-shop” for all business procurement needs, but Burkland was keen to stress that this does not necessarily mean competing with existing wholesalers. In fact, Amazon Business aims to serve the dual purpose of matching businesses up with goods in need of procurement, as well as providing sellers with a way into the B2B market.
Burkland explained: “We’re attracting all kinds of customers on Amazon Business – on the one hand, it’s small and micro businesses that are spread throughout the UK and the EU, and we’re providing a marketplace in which sellers can reach them, as they can be hard to reach otherwise. Enterprises can also be difficult to get in to for sellers, particularly the smaller sellers as large companies can often be complex to navigate.
“We provide a connection between those very large enterprises, and in many cases, those sellers wouldn’t have had the opportunity to sell to them otherwise. It’s a great opportunity to expand for the sellers.”
In other words, Amazon Business is not about competing with smaller wholesalers, but is an opportunity for them to use the market and access new opportunities, and even export products to new destinations that were previously hard to reach.
Any seller currently listing products on Amazon will be automatically eligible for Amazon Business, and will appear on the platform.
There is also an option for businesses to register as Amazon Business Sellers, which means that both VAT-inclusive and VAT-exclusive pricing will be listed, and customers will be able to request VAT invoices.
What’s next for Amazon Business?
The service is ever-evolving, and striving to become more convenient for business customers. This month, it has announced a raft of new features, including:
• Pay by Invoice, which allows businesses to pay on net 30 day terms to help improve cash flow
• Business Invoice, which offers improved search and filter options to source sellers which display new prices and VAT-inclusive invoicing for download
• Catalogue Curation, which enables businesses to configure the Amazon Business catalogue according to individual procurement policies – for example, administrators will be able to define restricted categories
• Coupa Open Buy, for Coupa Customers, gives direct access to Amazon Business products by using the search bar within the Coupa interface
“If we look ahead, we will be continuing to add to the selection on Amazon Business. We’ve got over 100m products, and we will continue to build our selection for business customers,” said Burkland.
“The second thing we will be doing is just continuing out roadmap, and listening very carefully to what our customers want. What their pain points are, what features and capabilities they’d like to see. We will continue to grow our footprint here in the UK, and to provide an export opportunity for sellers.”
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