When Amazon launched its B2B e-commerce marketplace, wholesale distributors knew it would be a juggernaut in the industry. But the stratospheric rise of Amazon Business may have still come as a surprise for many – from 2018 to 2019 alone, its gross sales increased by 60%, which was more than three times the growth rate of the company overall.
In March 2021, Amazon announced that it had reached $25 billion in worldwide annualized sales.Amazon was always going to be a significant force in the B2B marketplace, but wholesale distributors have no reason to panic. Bank of America estimates that the total addressable market for B2B e-commerce will be $5.7 trillion by 2025. While Amazon will capture a larger and larger share of that market, its $25 billion suddenly doesn’t look quite so colossal when viewed alongside the sheer scale of the industry.
But distributors have many other reasons to be optimistic. Amazon’s high-volume, low-budget e-commerce model isn’t the only one that makes sense — many distributors have plenty to offer that Amazon simply can’t replicate: expertise, flexibility, value-added services, unique customer insight, bigger margins and brand differentiation. To fully leverage these formidable advantages, distributors will have to focus on what they do best instead of trying to replicate Amazon’s singular business model.