Amazon Business is revolutionizing the B2B sales landscape, and the numbers speak for themselves. With $35 billion in annualized sales as of 2023, it's a platform that's impossible to ignore. According to a recent report, Amazon Business serves over 6 million customers, including 96 Fortune 100 companies.
But despite its staggering growth, the platform is far from reaching its peak. Todd Heimes, the director of Amazon Business, says, "We're just getting started."
If you want to scale your B2B business and leverage Amazon's potential, this guide will walk you through the fundamentals.
What is Amazon Business?
Amazon Business is Amazon’s business-to-business (B2B) marketplace designed not just for companies but also for organizations like schools, hospitals, and government agencies.
Launched in 2015, it caters to those looking to buy or sell products in bulk. It offers features like bulk pricing, business-only products, and payment options like purchase orders. Whether you're a small office needing supplies or a large organization looking for specialized equipment, Amazon B2B aims to make bulk purchasing easy and efficient.
Amazon Business Is Not Just a B2B Company’s B2B Marketplace. Who Else Is It For?
Amazon Business is not just for big corporations. It's an ecosystem of diverse sellers and buyers, each with unique needs and challenges.
If you're on the selling side, Amazon Business is a goldmine of opportunities. It's ideal for brands, manufacturers, dealers, and wholesalers focusing on B2B sales or having products suitable for bulk orders.
"More than 6 million customers are now buying on Amazon Business," says Todd Heimes, Amazon Business director. "This includes small and medium-sized companies as well as large companies and institutions."
Hybrid Brands
Are you a brand that serves both B2B and B2C markets? Amazon Business offers a unique platform to showcase your range and connect directly with business buyers. Imagine not just selling a single item but shipping out crates of your product. That's a lot of cha-ching with less effort.
Beyond the Corporate World
The platform extends its benefits even further, catering to service providers requiring office supplies or industrial equipment. Institutions like schools, hospitals, and government agencies can also use the platform's bulk pricing and easy ordering process.
The Two Faces of Amazon: B2B vs. B2C
While the consumer-focused Amazon is what most people are familiar with, Amazon Business—or Amazon B2B—is a specialized platform that caters to the unique needs of businesses and organizations.
Here are some key differences:
- Verified business accounts: Unlike the open-door policy of regular Amazon, Amazon Business requires a verified business account.
- Bulk pricing and purchase orders: This is a game-changer for businesses that need to purchase large quantities of a single item. Plus, the platform allows for payment via purchase orders, a common requirement in many business transactions.
- Exclusive products: Amazon Business offers business-only products that you won't find on the regular Amazon platform. This can range from specialized machinery to bulk packages of office supplies.
- Customization and certifications: Sellers can offer custom quotes and display certifications to attract specific types of buyers.
The Bottomline: If you're shopping for yourself, use regular Amazon. But if you're buying for a business or organization, Amazon B2B is the way to go.
Why Sell on Amazon B2B?
If you're considering expanding your B2B sales, Amazon Business offers compelling advantages.
Here's a few of them:
1) 6+ million ready-to-buy customer base
As of 2023, the platform boasts a diverse customer base of over 6 million, from SMEs to Fortune 100 giants like Intel and Citi. Educational and healthcare institutions are also on board.
By selling on Amazon Business, your products get maximum exposure, increasing the likelihood of bulk orders. You're not just reaching more people. You're reaching the right people. This can significantly shrink your sales cycle and inflate your sales volume.
2) Tap Amazon's established reputation.
Trust is hard to build, especially for new or lesser-known B2B sellers. Amazon Business lets you shortcut this process by associating your products with Amazon's 25-year reputation for reliability. This not only speeds up customer acquisition but also boosts conversion rates.
The end result: You can focus on other key areas like product development while enjoying a higher ROI.
3) The Platform is still growing.
You might think that a platform as massive as Amazon Business, with its $35 billion in annualized sales, would be nearing its peak.
But Todd Heimes, the director of Amazon Business, begs to differ: "We're just getting started." Millions of small businesses worldwide spend trillions on supplies and procurement every year. And Amazon Business aims to be their go-to marketplace.
The platform is still growing, offering you a unique opportunity to grow. In other words, now is the time to get on board.
4) Show certifications. Boost credibility.
Patricia, co-founder of SpaceBound, highlights one of the platform's most valuable features: certifications.
“One of the many benefits of selling on Amazon Business is the ability to distinguish SpaceBound from other vetted sellers with certifications. As a woman-owned small business, we appreciate the opportunity to display such certifications that assist buyers who are looking to procure from sellers that meet specific diversity or quality criteria and have also been certified under strict government requirements.” - Patricia Miller
By displaying your stamp of approval from recognized authorities, you're proving that you're trustworthy.
5) A satisfied customer is a repeat customer.
Speed and efficiency are crucial in B2B transactions. Amazon Business gets it.
Take Michael's experience with Red River Brewing Company as an example. Located far from the nearest city, sourcing supplies could have been a logistical nightmare. But with Amazon Business, it's as simple as a click. Features like Business Prime and Reorder Lists have revolutionized the way Michael manages his inventory.
From Michael:
"I just keep a list of my commonly purchased items, and I’m restocked in 2 days," In today's competitive market, such efficiency is an advantage you can't afford to ignore.”
Amazon B2B Success Stories: Real Companies, Real Results
Proof of Amazon Business's efficacy isn't hard to find. Just look at these two companies that have not only survived but thrived on the platform.
1. PCOnline: A Digital Powerhouse
Key Stats:
It's not every day you hear about a company attributing 90% of its $200 million revenue to a single platform. That's exactly what PCOnline did with Amazon Business.
The Journey:
Since joining Amazon Business, PCOnline has leveraged features like certifications, business pricing, and quantity discounts to skyrocket their business orders. Their commitment to building a robust business profile and obtaining necessary certifications has made them an authorized and trusted supplier on the platform.
The Impact:
The results were immediate and far-reaching. Not only did their sales skyrocket, but their newfound success also opened doors to new vendor partnerships, allowing them to expand their product offerings. This is a classic example of how success in one area can have a ripple effect across your business.
2. School Supply Boxes: Educating the Future
Key Stats:
An impressive 426% increase in B2B sales within just one year.
The Journey:
School Supply Boxes capitalized on Amazon Business features like Quantity Discounts and Custom Quotes to attract large-volume purchasers. They adapted their business model to offer case packs, allowing customers to buy in bulk rather than placing repeated small orders.
The Impact:
A highlight was a large-scale order from the St. Louis School District. Using the Custom Quote feature, they sold 22,800 bundles and even customized a teacher kit for the district. The client was so pleased they placed an additional order for 1,000 units.
These success stories demonstrate the transformative power of Amazon Business. Whether you're a digital service provider like PCOnline or a physical goods supplier like School Supply Boxes, the platform offers the tools and reach to significantly boost your B2B sales.
5 Steps to Start Selling on Amazon Business
If you already have a Professional Seller account on Amazon, you're ahead of the game—you can switch to Amazon Business at no extra cost. If you're new, however, there are specific steps you need to follow.
Step 1: Register for a professional seller account.
The first step is to sign up for a Professional Seller account, which comes with a monthly fee of $39.99.
Step 2: Meet Amazon's performance metrics
Next, you must meet Amazon Business's strict performance metrics to ensure quality service for buyers. These metrics include:
- Order defect rate: Less than 0.5%
- Pre-shipment cancellation rate: Less than 1%
- Late shipment rate: Less than 2%
Step 3: Handle Tax Exemptions
You must also handle tax exemptions for qualified business buyers, particularly if you're enrolled in Amazon's Tax Collection Services.
Step 4: Provide Shipping Tracking Numbers
Every package you ship must include a tracking number to maintain transparency and build trust with your buyers.
Step 5: Use Purchase Order Numbers
Finally, include the purchase order number with each delivery. This is essential for business buyers who likely match their orders against internal procurement systems.
What Are the Fees Associated With Amazon B2B?
Understanding the fee structure is essential for accurately predicting your profits and expenses. Fortunately, the fees for Amazon Business largely mirror those of a Professional Amazon Seller account.
Monthly Membership Fee
The first fee you'll encounter is the monthly membership fee for a Professional Seller account, which stands at $39.99. This fee grants you access to both the regular Amazon marketplace and Amazon Business.
Referral Fees
Amazon also charges referral fees for linking you with business customers. These fees can vary by product category and are often tiered. For example, you might pay a lower fee for bulk orders compared to single-item sales.
Fulfillment Fees
If you choose Fulfillment by Amazon (FBA), be prepared for additional fees. These cover storage and order fulfillment and are generally similar to those in the consumer marketplace. However, they can fluctuate based on the size and weight of your items.
Frequently Asked Questions
