Are there Amazon Weaknesses? Bank of America believes that it’s realistic to expect that Amazon Business will capture 10 percent of the total B2B eCommerce market in the U.S. by 2021. Bank of America projects there is a total addressable market for B2B eCommerce of $1.4 trillion by 2021.
Therefore, Bank of America believes that in a few years the Amazon Business unit will generate between $125 billion and $245 billion of added value for Amazon as a whole. BoA Note.
The success of Amazon Business could spell trouble for independent distributors that lack a strong B2B eCommerce presence or that haven’t been putting much into differentiating themselves.
“For many years, analysts predicted distributors were at risk of disintermediation – removed from the supply chain by manufacturers leveraging digital platforms to cost-effectively sell directly to users,” MDM’s Ian Heller and Thomas P. Gale point out in Your Amazon Business Playbook. “That risk never materialized, but Amazon Business has crafted a deeper value proposition that threatens displacement – removing distributors from the primary customer relationship entirely.”
Ordering Options – In order to actually make it easy for customers to purchase goods, Amazon has pioneered systems such as one-click ordering and “Dash” buttons. In one-click ordering, Amazon allows customers to purchase an item using pre-set options rather than having to take multiple clicks to purchase an item. Moreover, with “Dash” buttons, Amazon recognizes the need for customers to re-order items.
Return Options – Amazon makes it easy for users to return items. Many products come with a prepaid, printed return label. Furthermore, those labels are also accessible through the returns portal online. Moreover, last year, Amazon started partnering with Kohls to put return kiosks in select locations, for customers who would prefer to make the physical drop.
App – One of the easiest ways to access Amazon is through the Amazon app. With the Amazon app, Prime members are able to set preview sale products and get notified when they become available. Furthermore, they are also able to order products using traditional online ordering, or Dash buttons.
Searchability – Above all, Amazon combines a Google-like ability to search with an ability to sort by Brand, Price, and availability, as well as by categories specific to the brand.
Let’s face it, Amazon’s product delivery is not all that great. For the most part they rely on third party carriers or non-professional drivers. Personally, 10% of the products I order from Amazon are delivered to my neighbors or do not come when promised.
Above all, your retailers need consistent delivery days and times and many require multiple deliveries a week. If Amazon wants to become a primary supplier they will need to solve this problem.
Amazon is not an expert in the products you sell. They are generalists. It is nearly impossible to have a live conversation about specific product features at the point of order. Expertise and real consultative selling is as important to your retailers as ease of ordering.
The biggest differentiation between you and Amazon is your expertise. For your retailers to thrive they need to do more than just re-order products. Above all, they need to know about new products and trends. Furthermore, in order to learn, they must have real conversations.
Did you know that just 67% of Amazon shoppers are ‘very satisfied’ with their customer service? Therefore, this means that one-third of their customers are not very satisfied, or really happy. Accordingly, deliver “A plus” customer service at all stages of the order and fulfillment process.
This give you an opportunity to make things even easier for your customers. In other words, you can out-Amazon, Amazon. For example, electrical supplier Rexel recently installed lockers of various sizes (up to 10-feet-high) to the front of its building to make after-hours pickups more convenient for its customers. Rexel gives their customers a code to the locker and they can come and get the orders at midnight if they want to.
Above all, what you have that Amazon will never have is the personal touch. It’s about finding the customer’s pain points and solving them, and in person.
In conclusion, the challenge has been laid out here for B2B distributors: innovation is necessary to compete with Amazon Business and to adapt to your customers’ evolving expectations. Accordingly, the bottom line is that companies fail when they are not adapting to change in today’s economy. In other words, they must leverage the technological advancements achieved in the past decade.
OrderJump can help incumbent B2B distributors survive and thrive in today’s economy. The future of mobile commerce starts here; contact us.
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