Amazon's mission is to offer its customers the lowest possible prices, the best available selection, and the utmost convenience. Since the company was founded in 1994, it has continued to impress with its rapid growth. Starting as a bookstore, it has become one of the world's largest global e-commerce platforms and cloud computing companies.
Until 2015, Amazon was primarily operating in the B2C market. However, it has successfully entered the B2B market in the last three years. So when it launched the platform Amazon Business, it was easy to see that it would have a massive impact on B2B e-commerce. Today, Amazon's existence affects all companies and businesses, extent−including yours.
Amazon Business is a B2B marketplace where businesses buy and sell everything from simple light bulbs to advanced lab equipment. For those who are interested in trading, they offer two different partnerships arrangements:
As an Amazon business seller, you sell your products on the platform as a 3rd party. You will set your prices and can decide whether you want to manage the shipment and customer service by yourself. Of course, you can also choose Amazon to handle this for you.
As an Amazon Vendor, you'll be part of a 1st party solution where all partners must go through an application process. If you get accepted, Amazon becomes the full-time distributor of your products. They will buy and store your inventories and fully control the pricing, shipping and customer service.
At first, glance, selling products via Amazon has some apparent benefits. You will get immediate access to a global market, a structured distribution network and the right tools for managing a thriving e-commerce business.
However, before signing up as a partner, you should consider some disadvantages of selling on a third-party platform. Companies joining the marketplace will miss out on opportunities for customer engagement and lose insight into critical customer data since they pass off the buying and selling experience to Amazon.
Many years ago, we started to ask this question to our friends:
Is Amazon your future partner or competitor?
We always knew that long-term, Amazon would have an excellent position to expand its offering because it knew its customers much better than most B2B companies. Now, since the launch of Amazon Business, there is no doubt that every company needs to decide how to handle the big giant.
If you haven't already, now is the time to decide whether Amazon should be your future partner or competitor. However, remember there is no general answer to this; all decisions must be based on your company's unique situation and requirements.
Here are some initial questions for you to answer before you decide how to relate to Amazon.
This was a short introduction to how to think about Amazon. Get in touch if you would like to know more.