What Amazon Knows That Distributors Don't

January 24, 2014

Posted by Ranga Bodla(opens in new tab), Director of Industry Marketing, Manufacturing/ Wholesale Distribution

When you think of consumer-facing ecommerce(opens in new tab), you probably think of Amazon, the dominant player in online B2C retail(opens in new tab). But Amazon and other major B2C ecommerce(opens in new tab) companies have their eyes on the B2B market(opens in new tab) as well, and they're moving in fast. Case in point: the Google Shopping for Suppliers beta site carries a wide range of electronics, mechanical and testing/measurement products. Similarly, AmazonSupply.com stocks a wide selection of business products with 750,000 SKUs in 14 categories. The bottom line is that B2B distributors will soon be facing some very serious competition from these ecommerce leaders. In fact, Amazon is positioned to be a "game changer" in the B2B market, according to Dr. Jim Tomkins, CEO of Tomkins International, a supply chain consulting firm.

What does Amazon know about succeeding in B2B? Basically, B2B buyers increasingly want the same shopping experience they have as consumers on B2C ecommerce sites. The same people who buy shoes online are also buying supplies for their companies, and they demand the availability, convenience and service available on consumer sites, explained Tomkins during a recent webinar, “Competing with the Big Dogs: Standing Up to Google and Amazon(opens in new tab).”

In 2013, B2B was already twice the size of the B2C market – $570 billion vs $270 for consumer sales, according to Forrester's Key Trends in B2B Ecommerce for 2013. Another survey by the Acquity Group found that 57 percent of business buyers have bought goods for their organizations online, and 37 percent expect to spend more of their procurement budgets online next year. That survey, 2013 State of B2B Procurement Study also found that 71 percent of all respondents said they'd be more likely to order online or buy more than they would if it were easier and more convenient to browse and buy goods online.

Below are five key B2C lessons distributors can learn from to succeed in delivering the consumer-like experience its customers expect and are already receiving from competitors.

  • Provide real-time inventory updates. If an item isn't available, the buyer will go elsewhere – that's true in both B2C and B2B. In the Acquity Group study, B2B customers ranked availability of the product as the number one factor in deciding to complete a purchase, followed by the speed of delivery, product breadth, customer service/technical support, and price. By providing real-time inventory(opens in new tab) updates, buyers will appreciate knowing if something is out of stock or in limited supply. It saves them the frustration of having to cancel the order later or wait for a back ordered item, and it can encourage purchases by alerting customers to items in limited availability.
  • Customer self-service. Most customers prefer self-service tools such as customer support forums, automatic tracking data, and videos. B2B distributors need to fill their sites with quality product information, how-to videos, FAQs, and other self-service options for trouble shooting or researching products.
  • One-click reordering. Save lists of past purchases with one-click reordering capabilities. Most B2B customers tend to re-order the same products. Make it very quick and easy for them to find and re-order those items.
  • Promote products dynamically. B2C ecommerce sites are always upselling customers by advertising products that are related to the ones they are looking at or have previously purchased. Don’t assume that B2B buyers are only on your site to buy the items on their list and check out. By dynamically serving up product recommendations in the margins of pages or search results, the seller provides alternatives that the buyer may not have been aware of which can lead to increased sales.
  • Leverage B2C search functionality. B2B sites often have primitive search capabilities, making it difficult for a buyer to find what they need without a product number or exact product name. Faceted search, available in most B2C sites, makes it easy for shoppers to filter down their results and find products by categories and attributes. Fuzzy search interprets misspelled words and returns relevant results. Searchandizing enables a site to promote products it wants to sell, such as overstocked or high margin items, at the top of a search results page.

As Amazon, Google and other big players continue to move into B2B markets, distributors must learn to adapt quickly and use software that has these advanced capabilities if they expect to stay competitive in this increasingly sophisticated ecommerce environment. In the end, the sellers that make purchasing the easiest will win.

If you’d like to hear more about why B2B ecommerce represents the new normal, join us for our upcoming webinar(opens in new tab) on 2/6/14 where we’ll be discussing this topic in more detail.

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