Amazon launches AmazonSupply, guns for B2B Supply business

by: Loraine Lawson

Amazon launched out a new service aimed at the B2B space this week. Amazon Supply will target businesses and industrial customers by offering more than 500,000 supplies.

What kind of supplies can you get from the online store and reseller? It’s a wide range that includes materials — such as plastic, copper and bronze — as well as end pieces, lab equipment, and supplies in 14 categories, including:

• Materials, such as metal and plastic, and materials handling
• Abrasives and finishings
• Fasteners
• Office
• Hydraulics pneumatics & plumbing

AmazonSupply will compete with companies such as Grainger and Inventables, according to ZDNet. Just as with Amazon.com, the new site will offer free two-day shipping on orders over $50 and a 365 day return policy. It also will extend a line of credit to corporations and offer a dedicated service center for customers.

The big question, of course, is what this means for existing suppliers in these critical supply chain areas. Some experts suspect the B2C experience won’t translate into the demanding B2B space. But all agreed it’s a move that will cause aftershocks for B2B suppliers.

“…B2C and B2B may look similar, but these distinctions separate the two,” Lisa Reisman, managing director of the blog MetalMiner told Spend Matters. “Amazon can be a strong player in smaller sized businesses that don’t have integrated processes and systems, but companies that operate fully integrated vendor replenishment businesses will not be so quick to switch to Amazon. Nonetheless, it’s a disruptive offering and will be interesting to watch over the longer term.”

In a separate blog post, Reisman wrote that it’s unlikely AmazonSupply will attract companies that have more rigorous purchasing strategies. Instead, she writes, look for Amazon Supply to have “an enormous impact on smaller to mid-sized organizations and organizations with less formalized sourcing processes.”

One thing that could give Amazon an edge is it’s ability to quickly move into new supply areas and it’s efficiencies. Spend Matters’ analysis on the news notes that the head of AmazonSupply — Prentice Wilson — has a background “in working with companies with reputations for ruthless operational efficiency in the direct supply chain.”