Trade Marketing Insights

The Terrifying Rise Of Amazon Business [And Its Impact On Distributors]

Posted by Callum Hornigold on 20-Feb-2019 13:45:03
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As the famous adage goes, ‘If you can’t beat ‘em, join ‘em’.
That’s exactly what Amazon is advocating as it sets for further global domination with the rise of its B2B procurement service, Amazon Business.
Retail category buyers can now buy direct from Amazon instead of using a wholesale distributor, forcing distributors to either partner with Amazon or compete.
With Amazon’s unrivalled customer service which includes next-day delivery and highly competitive pricing, this puts immense pressure on distributors.
“Wholesale distributors now have a choice to either work with Amazon or think about how they’re going to compete,” says Gareth Carroll, Business Development Director EMEA, Oracle Netsuite. “If they are going to compete, distributors need to invest in technology such as ERP and Ecommerce. By investing in those technologies it will enable these companies to be far more agile, more innovative, put in place world-class processes, and deliver great customer experience.”
According to a report by Oracle Netsuite, 25 percent of distributors have been forced to bite the bullet and use Amazon Business rather than trying to compete with the distribution behemoth.
This also gives brands some serious considerations.
Not only does Amazon give brands direct access to consumers through its online B2C marketplace, they now have exposure to retailers too via Amazon Business.
This means brands should carefully select wholesale distributors who can compete with Amazon with robust digital transformation strategies, or, sell through Amazon.
Amazon’s dominance of B2B retail is set to grow.
Amazon Business hit $1 billion in sales since it launched in April 2015 in the US. Since then, it has expanded into the UK, France, Italy, Spain, Germany, India and Japan.
It aims to reach 10 countries by the end of 2019.
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Topics: digital trade marketing, trademarketing

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