It’s no secret that Amazon’s B2B marketplace has grown massively over the past few years. In 2019, the platform’s gross sales increased by 60% in comparison with the previous year. To put that into perspective, Amazon Business’s gross sales grew 2.9 times faster than the total sales of Amazon.
As the ecommerce giant keeps evolving, it’s looking toward new ways to achieve even more. The latest developments include Amazon changing its automation standard and slowly transitioning from the commonplace EDI (electronic data interchange) to API (application programming interface), promising easier automation, a larger range of applications, and real-time updates.
Recently, these changes have been brought to Amazon’s Vendor Central as well, with Amazon launching APIs in a bid to automate the operational process and aid vendors maximize efficiency. With Amazon placing a greater preference on APIs in the future, why should B2B vendors follow in making the transition?
Faster, better, stronger?
While Amazon has now allowed vendors to use an API, which is known to provide more flexibility, it is not obligating its user base to make the transition from EDI. The vendors that implement it, however, may see diverse benefits.
One of these is the faster exchange of information. In the B2C model, the purchasing journey is quite straightforward—but when targeting businesses, it’s a whole different story. The B2B sales cycle is characterized by a considerably long list of variables. The vendors need to reassess the price point, obtain certifications, meet diverse shipping requirements, observe supply chain conditions, and much more. APIs have the capacity to provide these insights in real time, empowering B2B vendors to enjoy streamlined data communication and ultimately have greater control of their operations.
Going into the future, APIs could also be a cost-saving feature. Usually, vendors that use EDI need to rely on third-party technology, such as an external IT team that charges per transaction. However, APIs can be deployed by any developer, so vendors can have more freedom to hire talent and create the exact apps they need—oftentimes at a lower cost than paying a regular fee and more effective than using a rigid, ready-made tool.
Changing Amazon marketing forever
Apart from faster information exchange and improved vendor performance, API-induced automation opens the doors for many new opportunities—especially in advertising data. Whether it’s for Amazon Marketing Services (AMS), purchase order management, or affiliate information, B2B vendors that often don’t have the resources to dive deep into the data can easily automate and improve their overall advertising performance.
Vendors can leverage their set-ups to extract data from Amazon, make any changes to their strategies within their own platform, and then use APIs to migrate the changes back to Amazon seamlessly. But it doesn’t have to stop there: Vendors can create their own artificial intelligence (AI) model to automatically shift budgets and bids on their advertisement campaigns while integrating other types of data to create customized reporting.
There’s only as much information that Amazon’s advertising platform provides. And while it is the same for everyone, vendors can leverage proprietary technology to dive deeper into the data and generate insights previously unavailable. They can also design new visualizations to identify new opportunities for their data resources.
Adoption is only a matter of time
Traditionally, EDI was primarily used for basic data transfers, whether to keep accurate numbers of inventory levels or to create a common language between the Amazon ordering system and the vendors. It’s obvious that, over time, Amazon plans to create a system that is more capable, automated, and also includes other opportunities for activities like content management within one powerful platform.
So, if B2B vendors are in a position to make the transition now, they probably should. Whether it’s Amazon or other ecommerce platforms, every day it’s more probable that there will be a standardized API system for vendors, just like there’s one for virtual desktop infrastructure (VDI) today.
However, switching to APIs isn’t necessarily easy. Not all vendors have the right infrastructure or resources to adopt the change. There needs to be substantial internal planning to ensure that the vendors can support utilizing an API for an ecommerce platform like that of Amazon’s. In many cases, this will be a long-term process—one that requires reporting and additional insights into how the systems work, and which roadblocks the API implementation may bring to the existing framework.
Even if B2B vendors aren’t ready to make an immediate transition, the adoption of APIs will be increasingly prominent on the ecommerce horizon. By taking the necessary steps to prepare for the path of greater automation today, vendors are building strong foundations for a future of streamlined data communication, optimized inventories, and novel marketing capabilities.
Rohan Thambrahalli is the founder and president of UpstartWorks, a management consulting firm that, among other things, helps companies sell through Amazon.com.