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    Ecommerce Expert: How B2B Brands Can Accelerate the Move to Amazon

    7 minute read
    Ecommerce Expert: How B2B Brands Can Accelerate the Move to Amazon

    The ongoing COVID-19 crisis has accelerated existing trends in ecommerce to an exponential degree, and the reliance on Amazon as a primary source of shopping is no different. Business analytics firm Facteus estimates that shopping on Amazon has increased by 35% compared to this time last year.

    With nearly half (49.1%) of all ecommerce already running through Amazon, according to a 2018 report from eMarketer, brand manufacturers can expect the retail behemoth to become even more of a central player in online shopping moving forward.

    For business-to-business (B2B) commerce, however, the potential impact of this growth is still unclear. Will B2B buyers turn to Amazon at a similarly accelerated pace?

    B2B Brands Must Prepare for Digital Demand

    According to Brian Beck, the answer is a resounding yes. Beck is author of "Billion Dollar B2B Ecommerce" and one of the leading industry experts in B2B manufacturing and distribution with over 20 years of experience.

    Beck shared his insights on how Amazon will reshape B2B ecommerce and what brand manufacturers need to do now to prepare during a recent Digital Shelf Virtual Summit session. He was joined by Justin King, general manager of B2B at Salsify and one of the founding members of The Digital Shelf Institute (DSI), a community of manufacturing executives from across the commerce ecosystem.

    The key takeaway: B2B brands that prepare themselves for this shift now stand to win disproportionately against the competition.

    The Rise of Amazon Business

    Amazon has been testing and iterating B2B offerings since 2012, with the launch of Amazon Supply. Amazon Supply was established as a separate website with a relatively limited (500,000) set of products. After three years, Amazon Supply was sunsetted. Highlighting Amazon's culture of testing, iterating, and testing again, Amazon then immediately launched Amazon Business in its stead.

    The new offering was designed to more directly mirror the consumer Amazon experience, including enhanced content, quality, and diversity channels, as well as a Business Prime offering. Amazon Business was also built directly into the Amazon site.

    The result, as Beck pointed out, has been a significant success for Amazon: Over 50% of B2B buyers are now making at least 10% of their work purchases on Amazon.

    Recent disruptions like the rise of COVID-19 and Amazon-native millennial B2B buyers, only serve to accelerate that trend. A recent study conducted by Beck's firm Enceiba found that 70% of B2B manufacturers believe that Amazon will be a significant player in their space in five years — and 72% expect to be selling on Amazon in five years, up from 56% today.

    The B2B Decision: Should You Sell on Amazon?

    Beck noted that there are significant opportunities for B2B brands that are considering investing in an Amazon strategy. The massive brand exposure, brand control, and potential revenue gains that come with listing products on the top product search engine must not go unnoticed. 

    But there are some drawbacks: Brands may face greater competition — there are 600 million products listed on Amazon. Brands would also be selling to Amazon's customers, not their own.

    Beck recommended these three options for selling on Amazon:

    1. Sell directly to Amazon: A first-party (1P) relationship allows brands to sell directly to Amazon. Brands ship the products to Amazon, and they send them to the customer.
    2. Set up a store on Amazon: A third-party (3P) relationship allows brands to set up their own store on Amazon, giving brands more control over branding and customer fulfillment. This is the more popular option — and one that Amazon is increasingly recommending to vendors.
    3. Control and leverage resellers: With this model, brands can enable approved resellers to sell products on Amazon, while brands maintain control of their identities. 

    Beck stressed that all three should be considered within the context of a more extensive, multichannel ecommerce approach. Owning an ecommerce site offers many benefits in terms of more control over the customer experience and resulting customer data.

    "Quite frankly, I think they need to work together," Beck said.

    How B2B Brands Can Build an Amazon Foundation

    Step 1: Test Frequently

    Beck recommended that brands test an assortment of products on Amazon to start. This testing allows brands to collect data on what buyers want to purchase on Amazon, which can then allow them to invest more strategically in the future.

    Step 2: Develop Great Content

    The product content brands provide to Amazon must trigger search results with clear and descriptive copy. Content should be engaging and interactive to keep buyers on product pages. Customer reviews are also essential for building buyer trust and validation. Brands must also highlight their brand stories and mission to help develop customer loyalty.

    Step 3: Invest in Resources

    Beck recommended ensuring there are people on staff responsible for leading the Amazon product strategy, content planning, web merchandising, paid marketing, and other operations. Not every responsibility needs to be someone's full-time job, but each role needs to be filled.

    Embrace Digital Transformation

    Beck ultimately recommended Amazon as a potentially less capital-intensive way to force organizations to start thinking about more holistic digital and ecommerce programs.

    Particularly in a post-COVID-19 environment (where buyers are expecting first-rate ecommerce experiences from all brands), Amazon offers a way for brands to enter an enormous potential market. This would allow brands to find new customers just as they are adopting the world's number one business-to-consumer (B2C) product search engine for B2B buying.

    Watch the full session, "Amazon Business: Accelerating the Move to Digital for Manufacturers, Brands, and Distributors," and sign up for upcoming Digital Shelf Virtual Summit sessions.

    Written by: Jason Fidler

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