Whether your B2B business is new to eCommerce or it already has an established online store, you’ve thought about using Amazon’s new B2B marketplace as a potential sales channel. Amazon offers a strong customer base, high website traffic and a refined customer experience so it’s easy to see why selling on Amazon is appealing to business owners.
However, before you decide to sell on the world’s largest online marketplace, identifying the extent to which you want to sell on Amazon will be crucial. We offer both the pros and cons of selling on Amazon Business for your consideration.
Why You Should Sell on Amazon Business
The benefits of selling on Amazon Business include:
Increased online visibility and access to a large customer base
Research shows that a whopping 44% of shoppers first search for products on Amazon. Business buyers follow the same trend. By engaging with Amazon Business, B2B vendors can increase visibility through Amazon’s high online traffic. This enables merchants to quickly sell to a large audience of buyers.
Customer credibility and confidence
It’s tough to convert a new customer who has never purchased from your company. Buyers are always cautious when working with new vendors as expectations are unknown. Because Amazon is a reputable and trusted eCommerce giant, customers feel more comfortable during the purchasing process.
B2B and fulfillment infrastructure
Amazon Business provides a good infrastructure for B2B selling (e.g. account management, multi-user support, business account payment options, etc.). The marketplace also offers outsourcing fulfillment service for merchants by warehousing products, shipping goods, managing returns and servicing customer issues or complaints.
Instant initiation of online selling
By registering a seller’s account on Amazon, you can launch your B2B eCommerce business in just a few hours. Instead of building your own infrastructure and website (which might require significant upfront investments in both cost and time), you can immediately start selling with Amazon.
Weaknesses for Selling on Amazon Business
As you might expect, there are certain drawbacks when selling on Amazon Business. Here are a few things to look out for:
You don’t own the customer base
Although you’re reaching an extremely large customers segment, all of these people are actually Amazon’s clients, not yours. It will be hard to get insightful data about your customers which makes it difficult to analyze your business. For example, you won’t have access to buyer’s emails – something you would naturally capture on your own eCommerce site via a customer or corporate account. This limits your ability to send strategic emails and marketing promotions.
Brand development impact
You’re limited in developing and promoting your own brand. Once you set up an Amazon webstore, you’ll get restricted by specific terms and conditions meaning you don’t sell your brand the way you normally would on your own website. Amazon’s veneer make it difficult for buyers to notice your brand.
Transaction and FBA fees
By selling on Amazon, you’ll have to deal with lower margins for each sale. The transaction fees vary from 8% to 15% depending on the type of item but it’s gone as high as 45% for specific product categories.
As there are countless merchants on Amazon’s overcrowded marketplace, you will wind up facing steep competition. Besides, selling only on Amazon limits your business into product comparisons. You’re not able to differentiate on customer/product experience, service, or brand as all content is confined to specific Product Pages.
Amazon Business vs B2B Site: Striking the Balance
There’s no universal best practice when it comes to building your B2B eCommerce strategy as every business is different.
But what is universally true, is that business owners can’t stay indifferent to Amazon Business. The days of a simple “business card” website are long gone. It’s time for B2B business owners to assess the online visibility of their products and recognize how important eCommerce is for the future of their business.
Here are three different ways how your business can use Amazon to help supplement your eCommerce efforts:
- You can try out Amazon business marketplace as a launching pad for your B2B sales and spare both time and money in the short term;
- You can focus on the long-term plans and invest in building your own brand and its identity elevation;
- You can opt for launching your own dedicated commerce site and join Amazon Business to utilize it as an additional sales and marketing channel.
If your business is looking to establish your own brand, make sure an eCommerce platform you choose to build a dedicated online store caters to B2B eCommerce needs and provides the functionality required to operate in B2B environment.
OroCommerce offers the most comprehensive set of out-of-the-box B2B features helping you drive online sales growth. Contact us to discuss your individual business case and get a personal demo of our product.