Competing with Amazon in B2B Commerce IS Possible

June 11, 2014

Posted by Ranga Bodla(opens in new tab), Senior Director of Industry Marketing

The decision to sell online is no longer one of “IF” or even “WHEN” for B2B suppliers. The decision distributors need to make today is “HOW FAST” – because the new arena for competition today is in B2B ecommerce and—just as we saw happen with B2C ecommerce—the B2B market is rapidly falling under the dominion of

The traditional model of distribution is rapidly changing. It’s a whole different ballgame than it was 10 years ago. Today, B2B customers increasingly act like consumers with the desire for self-service tools and instant access to product information through their mobile devices. Many consumers are beginning to buy directly from wholesalers and manufacturers with easy to use ecommerce sites. Additionally, both manufacturers and distributors are looking to cost-effectively increase market share and reach new customers.

In order to more effectively compete, companies need to consider ecommerce as not just an afterthought but an integral part of their strategy to survive.

In just two years, the expectations of B2B customers have rapidly evolved to match those of B2C customers. Much of this it is due to the arrival of Amazon's B2B marketplace, which launched two years ago as a digital hub for buying equipment, parts, raw materials and supplies of all sorts for corporate buyers. AmazonSupply is encroaching on a growing number of industrial and business supply markets. Research from the Acquity Group found that close to half of business-to-business (B2B) buyers have bought from AmazonSupply(opens in new tab) and that 25% of B2B purchasers use AmazonSupply “frequently.”

While distributors are struggling to compete with Amazon, however, they would do well to learn from Amazon's approach to distribution, marketing, customer service and R&D. In the webcast "AmazonSupply: Two Years Later(opens in new tab),” a panel of experts shared their insight into how Amazon has done so well, so fast, with B2B distribution and how distributors who run up against Amazon can compete more effectively. Here's what these experts see as the critical takeaways from Amazon's rapid success in B2B:

Make ecommerce the hub of your business. Bob DeStefano, online marketing strategist for SVM E-Marketing Solutions advises that distributors must realize that B2B buyers are increasingly tech-focused Generation Y (Millenial) buyers moving up into procurement and management roles vacated by retiring Baby Boomers.

They shop online on their iPads or cell phones and expect to go online for corporate supplies. They want highly informational, content-rich and fully functional ecommerce sites that let them do everything in one place. They have little patience for suppliers who make online purchasing difficult and will most likely move to their competitors. This generational shift is happening now and will pick up speed over the next five years as the last of the Baby Boomers retire.

So distributors must treat their ecommerce sites as the hub of their marketing efforts.

That's advice that more distributors need to follow. A survey sponsored by NetSuite in partnership withModern Distribution Management showed that distributors are concerned that their own sites lack advanced features. “The 2014 State of E-Commerce Distribution: The Maturing E-Commerce Channel(opens in new tab)” found that many had low levels of satisfaction with more advanced features such as live chat, price quotes and product suggestions.

Share your expertise with content. Along with rich functionality and communication, buyers want information. They do a lot of online research and price comparisons and appreciate credible content to help them make decisions. It also pays to be involved on search engines, which is how the majority of customers find out about products. Social media channels, as well as email marketing, should also be important methods of pushing out great content and building a reputation as a source and a resource of credible information.

Serve the supplier as well as the customer. Amazon knows how to create opportunities and nurture relationships with its B2B customers and partners. As Chuck Bennett, president of Business Data Links in Pomona, Calif. observed, Amazon has created programs beneficial to wholesalers and manufacturing. For instance, its Seller Central provides a vehicle for wholesalers to easily create a presence on Amazon in exchange for a small percentage of the gross sale. Being able to sell via Amazon is a big boost for many firms. Another program lets companies fulfill their products through Amazon, using its pick and pack capabilities and forecasting to keep inventory stored with Amazon at just-in-time levels. Amazon, as well as Google's Shopping for Suppliers marketplace offer suppliers opportunities to communicate with and connect to their end customers. Everything they do is aimed at making business better for their suppliers.

Push the envelope of new ideas. Amazon is known for testing promising new ideas for services and programs. Amazon was an early pioneer in the web services market in 2006 selling storage and computing power to end-user organizations. It introduced "anticipatory shopping" or a just-in-time shipping arrangement that forecasts product needs and prepares products to ship immediately upon order. It recently expanded into fresh grocery deliveries, and has talked of delivering orders via drones. That constant quest to find better, cheaper, faster methods of delivering a wider array of products ensures Amazon is a market leader in new services and generates great media coverage as well. While Amazon has a lot more money to pour into experiments then most distributors, there are plenty of great ideas waiting to be tried and even one can make a significant competitive difference.

Learn more by viewing the webcast AmazonSupply: Two Years Later(opens in new tab).

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