A quick guide to Amazon Business
Published by Abbi in Amazon, Amazon Business
Originally launched in the US in 2015, Amazon has found a great deal of success with their Amazon Business program, generating over $1 billion in sales in their first year. Building on that, they expanded the program to include Amazon Germany in 2016, and most recently to Amazon UK earlier this year (2017). With over 50,000 businesses utilising the German site for sales, it continues to grow making it a tool worth investigating for all B2B sellers.
Here we've uploaded a handy guide to explain what it is and some information that can help you decide if it's the right tool for your business.
So what exactly is it?
Amazon Business is a marketplace feature on Amazon that works as a targeted way for businesses to engage professional customers in supply chain relationships. Having a Business Seller account functions in a similar way as a regular account, but with special features aimed at creating a market optimised for B2B sales. Both registered Business buyer accounts and normal customers will be able to buy from Business Sellers but there are also options to sell specifically to businesses only.
To register you must first have a Professional Seller account which costs $39.99, €39 or £25/month depending on your location. However, once you have signed up you can upgrade to a business account for free.
How is it different to a normal seller account?
- Business offers: Amazon offers the option to sell your listings to Business registered buyers only. Business buyer accounts are available for free to businesses verified by Amazon. This means you can sell specific professional-grade products as well as having access to special pricing tools that mean you can offer quantity discounts and business pricing. The bulk discount option is vital part of this offering.
- Profile and product descriptions: Enhanced editing features allow businesses to distinguish themselves by creating more detailed profiles, including adding a company story and logo. They can also display different quality and diversity certificates to certify themselves. Product descriptions can be enhanced as well, with Business Sellers able to upload user manuals and CAD drawings. Buyers will also be able to find products more easily with a refined search function.
- Fees and requirements: Whilst Amazon offers lower referral fees on large B2B transactions in select categories, it also holds businesses to increased performance requirements. These include:
- Low pre-shipment cancellation rate (less than 1%)
- Low late shipping rate (less than 2%)
- Low order defect rate e.g. few A-Z claims, returns, and/or chargebacks (less than 0.5%)
- Tracking number on every business order package
- Packing slip with every business order package
- Purchase order number with every business order package when provided by the customer.
Differences depending on country
Amazon Business Seller is currently only available in the US, UK and Germany. Because of variant regional systems the UK and Germany Business Seller accounts have a few differences to the US one.
- EU selling: As with having a regular Seller account, businesses will have the option to sell within all five Amazon EU marketplaces at no additional subscription fee.
- Payment by invoicing: Businesses will be able to pay by invoice if they choose, an attractive option to business buyers. Amazon handles all the related activity including credit risk assessment, as well as billing and collection making it risk free for sellers.
- VAT: Amazon will create automatic VAT invoicing on behalf of the business, as well as offering the ability to sell with EU-wide compliant VAT-exclusive prices to businesses.
As well as these key features, Business Sellers will still be able to take advantage of any of the other useful features that come with having a normal Seller account, such as FBA and Amazon Sponsored Ads.
Should your business be using it?
Below we look at some of the benefits and drawbacks of using it.
- Amazon has an incredibly high volume of traffic and most people are ready to buy by the time they are searching for something on there. Using their pre set-up system it will be much easier for your products to be viewed by more people. It also means spending less time, energy and money trying to drive people to your own website. As it's also targeted specifically at businesses, it is more likely to reach your target audience.
- Through Amazon Business you are still able to use their FBA feature. This can take a lot of the stress out of shipping and handling issues, and help to streamline your whole operation. Especially if you are a smaller business, it takes an extra logistical pressure off.
- As discussed above, it has numerous features tailored towards a B2B market. As one of the world's biggest ecommerce retailers it's in Amazon's best interests to get you selling as much as possible. That means they spend billions a year testing, tweaking and improving features, so you can be sure they've implemented the ones they think will help that process the best.
- With Amazon Business you can add different certificates to your page that highlight diversity. For instance, if you are a female-owned or registered small business you can certify that within your seller page. Buyers are then able to refine their searches based on these features.
- Selling through the Amazon platform means there is the ability to use the myriad of tools set up to help Sellers make the most out of Amazon, such as a listing tool or a repricer.
- Profit margins will be smaller as there will be an increased number of fees, such as subscription, product and FBA fees.
- There will be less opportunity to interact and build relationships with clients. As it's all through the Amazon marketplace buyers will probably be less aware of who they are buying from and search just to find the cheapest option. Amazon also has limits on how you can contact clients meaning there is less opportunity for creating brand awareness.
- Setting up all product listings means more administration and data input which can potentially be complicated and time consuming.
Who is this good for?
Generally it makes sense for a business to upgrade to a Business seller plan as it can assist in boosting sales, especially if they are finding they aren't getting a high volume of traffic. It can also take a lot of the hassle out of organising small details, as there are lots of functions in place to make life easier.
However, if a company prefers to run on a service oriented basis, Amazon Business may not be the ideal tool as it can make the buying system slightly less personal. It also means prices are slightly less negotiable, as the direct market is more competitive. An option to consider would be selling one range of products on Amazon Business, which can help create brand awareness without tying you too strongly to the Amazon brand.