Amazon Business revealed Tuesday it passed the 1 million customer mark since launching in April 2015. Amazon declined to break out the number of accounts those customers represent, but the milestone might be less notable than the size and breadth of markets some of those companies signify.
A sample of Amazon Business’s B2B customers includes Con Edison of New York, Gwinnett County (Ga.) Public Schools, Intermountain Healthcare, Johns Hopkins University, King County (Wash.), Mayo Clinic, Siemens Corp. (USA) and Stanford University, the company says. It counts hospitals, educational institutions, labs, daycare centers, government agencies, restaurants, Fortune 50 companies and sole business proprietors among its customers.
That scope might be more telling than the 1 million customers, at least to Amazon Business’s competitors, says Andy Hoar, principal analyst for e-commerce at Forrester Research Inc. “They’re getting surprising traction in what many believed were going to be later-stage digital verticals,” he says. “But government and educational institutions have a great and immediate need to organize unplanned, ‘tail’ (unmanaged) spend. In addition, they’re significantly budget-constrained. Amazon Business helps on both fronts.”
More surprising is the size of those customers, Hoar says. “Amazon’s winning large organizations. This is what should actually scare other B2B companies out there. We all expect Amazon Business to do well among the SMB set. But they’re winning enterprise customers, many of whom are cash cows for enterprise distributors with large-scale field sales organizations. Amazon may now officially be disrupting that model.”
Amazon Business, the B2B arm of Amazon.com Inc., is No. 104 in the B2B E-Commerce 300.
Amazon Business customer Stanford University is updating its procurement experience to mirror consumer expectations, chief procurement officer, Ben Moreno, says in a statement from the B2B marketplace. A decentralized structure, and the vast number of commodities purchased within a university environment, makes traditional procurement difficult to manage and lends itself to the more consumer-oriented buying experience of an open marketplace, he says.
Danielle Hinz, chief procurement officer for King County, the Washington state county that includes Seattle, says Amazon Business “has helped us realize county-wide cost savings, such as providing access to business-only pricing with quantity discounts. We are also able to track purchases easily by department and user—we appreciate and value that transparency in our organization.”
The U.S. segment of manufacturer Siemens Corp. needs timely delivery of products ranging from office supplies to factory machinery in its business units and Amazon Business enables those segments to automate those orders, says Drake Paben, director of I.T. procurement. Siemens expects to expand its procurement capabilities with Amazon Business, he says.
Getting to 1 million customers shouldn’t necessarily be surprising, Hoar says, any more than Facebook going from 1 billion to 2 billion users. And given Amazon.com’s more than 250 million users and at least 80 million Prime members, “getting 1 million business users is quite achievable if they just mine that base,” he says.
And benefits from the data the B2B marketplace can gather might outweigh the value of sales dollars. “Having 1 million business customers coming to them on a regular basis to buy for work gives Amazon Business invaluable buy-flow data they can use to hone the customer experience, as well as unique and significant leverage with sellers on pricing and fulfillment,” Hoar says. “As Amazon gets closer and closer to achieving critical mass, they have even greater ability to dictate terms and conditions.”
Amazon Business already is tapping its customer base for ways to improve. “Their feedback has been invaluable in helping us better serve businesses and organizations of various sizes–from local government agencies to global enterprises,” says Prentis Wilson, vice president of the B2B marketplace.
Amazon Business says its marketplace offers access to more than 85,000 sellers.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes DigitalCommerce360.com, Internet Retailer and Internet Health Management. Follow Bill Briggs, senior editor, on Twitter @BBriggsB2B.
Follow us on LinkedIn and be the first to know when new B2BecNews content is published.Favorite