Amazon.com Inc. is looking at a whole new game plan for B2B ecommerce: selling its own private-label business products.
What remains to be seen with the quiet rollout of AmazonCommercial is whether the world’s biggest web merchant is just testing the waters for a full range of private-label products aimed at business buyers or if it already has a full-scale rollout underway.
Either way, B2B product distributors and niche web merchants that sell janitorial and sanitation supplies, paper products and related items to businesses already are taking notice. “It stands to reason that Amazon would launch a commercial private label program in the janitorial paper category as they seek to own the entire strata of the food chain,” says Vic Hanna, CEO of BettyMills.com, which sells a range of medical equipment and supplies online but was founded as an ecommerce site for janitorial and cleaning supplies. “It would not be surprising to learn if they were planning to grow the pulp which produces the paper.”
AmazonCommercial store on Amazon.com
In June Amazon rolled out an AmazonCommercial store on Amazon.com to offer its new brand as a product line that “creates value for businesses by providing professional grade, cost-effective products,” Amazon says on the store’s home page. The web store carries paper products categories, including paper towels, toilet paper and facial tissue. AmazonCommercial products are also featured alongside other brands on other sections of Amazon.com outside of the dedicated AmazonCommercial section.
All AmazonCommercial products can be ordered and shipped through an Amazon Prime account, and are featured online with product details and recommendations of similar products, along with other content.
Among the reasons Amazon launched AmazonCommercial is because of buyer demand, the online company says. “We’ve heard from customers that they’re looking for more professional-grade selection to meet their business needs, as well as transparent pricing and an easier shopping experience,” says an Amazon spokesman. “We launched AmazonCommercial so that customers have even more options to choose from when they’re shopping on Amazon or Amazon Business for janitorial and sanitation supplies.”
Amazon isn’t saying much more about the growth opportunity it sees in developing private-label business products or what product and product categories it may be eyeing next. “I don’t have those details for you,” says the spokesman.
AmazonCommercial is a separate entity from Amazon Business, the B2B marketplace at Amazon.com/business, which the company says generates annual sales of more than $10 billion. Amazon Business is on track to soon surpass $25 billion, according to R.W. Baird & Co.
Amazon’s many retail private labels
Launching private-label brands on the more retail-focused side of ecommerce is an established and growing business for Amazon.
The company introduced seven new private-label retail brands in the fourth quarter, as well as more than 150 exclusive brands sold only on Amazon, according to the TJI Amazon Brand Database, a database that tracks Amazon’s exclusive and private-label brands.
Amazon describes both its private-label brands (those owned by Amazon) and its exclusive brands (those owned by a third party but only sold on Amazon) as “Our Brands” on its websites. “Our Brands are Amazon Private Brands and a curated selection of brands exclusively sold on Amazon,” Amazon writes on its website. Amazon is No. 1 in the Internet Retailer Top 1000.
With those fourth-quarter brand additions, there are now 135 private-label brands and more than 330 Amazon exclusive brands on Amazon’s retail sites around the world, TJI says.
Given that B2B ecommerce generated 2018 U.S. sales of $1.08 trillion and grew 11.0% from $970 billion in 2017, according to the 2019 B2B Ecommerce Market Report, Amazon is using private-label launches to compete against other B2B sellers, say some online sellers of primarily business products. “Definitely an interesting but expected move from Amazon to roll out a B2B-focused private-label line,” says Brian Fricano, CEO of SustainableSupply.com, an environmentally friendly home and industrial maintenance products seller. “I believe this is just the beginning for Amazon and not just a test, and our team expects Amazon to ramp up their B2B private label offering very quickly over the next two to four quarters.”
More categories for AmazonCommercial?
Amazon hasn’t said where it next plans to expand AmazonCommercial, but Fricano says he believes that likely product categories will include office supplies, janitorial chemicals and supplies, non-technical safety products and material-handling equipment.
“B2B manufacturers operating in the consumable product space should be very concerned with this development,” Fricano says. “Not only will Amazon make it more difficult for their products to appear in search results and on-site merchandising, Amazon will be at the helm ready to offer their private-label alternative delivered in one day or less.”
B2B sellers also should get used to the premise that Amazon also will study multiple niches for private-label business products, Hanna says. Amazon has “all the transactional data at their fingertips, which they are able to mine in order to understand precisely what the customer wants, and that data comes at the expense of their own suppliers,” he says. “I would expect them to continue to push into everyone’s corner of the pie, given they have such an enormous inferno to feed, lasting ambitions and the data with which to make the intelligent decisions.”
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