“We’ve been excited about our growth,” Prentis Wilson, vice president of Amazon Business, said in an interview yesterday.
And no wonder. Even for e-commerce behemoth Amazon.com Inc., Amazon Business is producing blow-out growth rates. Launched in April 2015 to replace the former AmazonSupply.com, where Amazon itself was the only seller, Amazon Business—a marketplace where Amazon joins more than 30,000 other sellers—hit $1 billion sales within its first year and is growing at a month-to-month clip of 20%, Wilson said.
Although Amazon won’t break out total sales figures for Amazon Business, Wilson says its 20% monthly growth rate is holding steady even as its total increases. He attributes that to steady increases in numbers of customers, suppliers and products. “We’re adding new businesses every week, on both the buy side and sell side,” he said. He noted that Amazon Business now has 300,000 registered business accounts among buyers, up from 200,000 at the end of last year, and is adding thousands more every week. Among its new and growing customer segments, he added, are schools, universities, hospitals, medical clinics, small restaurants, construction contractors and government agencies.
Amazon Business is also blowing out its number of products and entering new business and industrial product categories. The B2B portal offers at least 9 million business-specific products, Wilson said. He added that Amazon Business also is continually expanding its purchasing and selling services designed to make online transactions easier and faster for businesses.
“We’re trying to reduce the time it takes to buy and sell supplies,” Wilson said.
Among new and expanding product categories on Amazon Business are equipment and materials used in the life sciences industry by such customers as research institutions and pharmaceutical companies, and medical equipment to healthcare organizations.
Among the new services it’s offering buyers and sellers:
- Business accounts, which allow a company to add thousands of individual buyers, or groups of buyers and departments, authorized to place orders under the same account. A company can run analytics reports to monitor spending by individuals and groups of buyers. Wilson said one Amazon Business customer has more than 100,000 users on its business account. Amazon Business launched these business accounts services in January 2016.
- Customer-specific pricing, which is still being tested with some customers, and which allows suppliers to display pricing—such as discounted pricing based on high order volume—to particular customers as they log into their account. Customers can also view off-contract pricing available from other sellers, letting them take advantage of prices that may be more attractive. “They can click to buy from the marketplace, or from their contract seller,” Wilson said.
- Electronic invoicing, which lets customers purchase products from multiple sellers and receive a single invoice from Amazon Business. Customers pay Amazon Business, which then pays each supplier included in the invoice. Amazon is still testing the e-invoicing program with several customers, and hopes to make it available to all customers later this year. “We’d love to get it out this year, but we want to make sure it works well,” Wilson said.
- The ability to purchase from Amazon Business through 31 procurement software applications, including the ability to link from such applications directly to a “punchout” catalog of authorized products on the Amazon Business site.
- Workflow for routing order approvals among a buyer’s superiors. The approval workflow has been available since Amazon Business launched last April.
Amazon Business also provides sellers with Fulfillment By Amazon services, which lets customers receive products ordered from multiple suppliers through a single FBA shipment—a service it has offered since Amazon Business launched last year. Fulfillment By Amazon is a service in which Amazon warehouses products for marketplace sellers and fulfills their orders.
Wilson would not specify the average commission Amazon takes on Amazon Business transactions, but says the average fee for all categories on Amazon is 15%. The fee varies by product category, and Amazon’s fee schedule lists a revenue-share fee of 12% of transaction value in the Industrial/Scientific products category. Amazon Business is No. 37 in the B2B E-Commerce 300.
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