It has been five years since Amazon Business began operating and, in that short period of time, the Seattle-based company has sold more than $10 billion worth of products to businesses, government, healthcare companies and educational institutions. And future projections seem to indicate that number will double in the next few years.
The roots of Amazon Business can be traced back to the founding of AmazonSupply, which began in 2012 before being absorbed into the new group three years later. Most distributors didn’t seem worried then about Amazon encroaching on the industrial business. In fact, in 2014 I made a presentation to a group of some 200 distributors and manufacturers and asked if AmazonSupply had affected their business. Not one person indicated that it had. It would be interesting to ask those people today if they felt the same way.
Opinions regarding Amazon Business vary greatly. In one study, McKinsey and Company concluded that “Amazon may present the biggest risk to auto, electronic and general line distributors.” The firm pointed out that “industrial distributors that don’t embrace e-commerce or don’t embrace it fast enough may lose sales to new and more nimble competitors such as AmazonBusiness.” It’s no wonder. Amazon may have accounted for 38 percent of all e-commerce in the US in 2019, according to eMarketer.
In a 2018, survey of some 220 distributors and manufacturers done by B2BEC News, nearly 40 percent of distributors said they sell their products on either Amazon or Amazon Business. Nearly another 14 percent said they expect to eventually start selling on Amazon or through another e-commerce marketplace.