Amazon Business is a competitive B2B marketplace for businesses who want to sell more to other companies. With more than one million customers, selling on Amazon Business is an attractive prospect to many sellers, manufacturers and distributors alike.
But what exactly is Amazon Business? What are the advantages and disadvantages to Amazon Business? What is the difference between Amazon Business and selling on Amazon? What requirements do you need to meet for an Amazon Business account?
We put the spotlight on the business-to-business (B2B) marketplace so that you can decide whether or not it makes practical sense for you to expand and sell on Amazon Business.
What is Amazon Business?
Amazon Business is a B2B marketplace that has been created to address the changing needs of business customers and provide them with a more efficient way to buy and sell online.
According to Forrester Research, 93% of business customers prefer to buy online and 75% agree orders made online are far more convenient than buying from a salesperson.
At the same time, Amazon has changed the way online shoppers buy online. The marketplace has made the online shopping experience easier, faster and cheaper for customers across the world.
However, businesses have very different wants and needs to online shoppers. For example, business customers require VAT invoices, and loyal business customers or those who place large volumes of orders often expect big discounts.
Amazon Business has taken the key benefits related to selling on Amazon (reliability, cost and speed) and added extra features tailored to business requirements – and it’s already proving to be a huge success.
In fact, the B2B marketplace is used by more than one million customers, making it quite a lucrative prospect for businesses searching for new ways to expand and sell more products.
What’s more, it’s worth remembering that these customers aren’t just standard B2B businesses – charities and governments can also use Amazon Business to buy products.
The Amazon Business marketplace currently operates in eight countries. These include:
- United Kingdom
- United States
If Amazon Business isn’t active where you’re located, it may be worthwhile to check out your options for selling products overseas through Amazon’s other marketplaces.
What features does Amazon Business provide sellers?
As an Amazon Business seller, you have the opportunity use specific features tailored to the needs of businesses to sell more products on the marketplace.
One such feature of new B2B selling platform is the Amazon VAT Calculation Service, which sends invoices on a business seller’s behalf and enables you to list business products with VAT exclusive and inclusive prices.
What’s more, Amazon has revealed to Tamebay that business sellers who have adopted the VAT Calculation Service have increased their business to business sales by more than 50% within the first month of using the feature.
Another key aspect is Amazon’s exclusive business listings feature, which allows you to create listings only for companies and only visible by business customers. This can be a great way to target specific products to business customers and others to retail customers.
Amazon Business merchants also have the ability to offer companies specific discounts to encourage more sales through the B2B marketplace. There are two types of discounts provided by the Amazon Business seller program, including:
Business price: A discounted price made available to Amazon Business customers.
Quantity discount: A tiered discounted price based on the volume of the order.
You can also add extra credentials to your Amazon seller profile as a way to distinguish yourself to Amazon Business customers. While there are eighteen Amazon seller credentials in total, these include the following:
- A female-owned business
- Registered small business
- Minority business owner
- Veteran-owned business
In order to list your business in line with these seller credentials, you will need to be able to provide supporting information. Depending on the credentials you want to claim, you’re likely to need to produce a physical certificate or business identifier number.
These will be displayed to Amazon Business customers, who can refine their product searches based on such attributes when or if they see fit, which can impact your sales.
The difference between Amazon Business and Amazon
Other than the main business features we’ve discussed, there are other differences between Amazon Business and selling on Amazon. On top of these extra benefits, Amazon Business sellers are held to increased performance requirements.
As a business seller on Amazon, you will need to stick to the following standards:
- Low pre-shipment cancellation rate (this needs to be less than 1%)
- Low late shipping rate (this needs to be less than 2%)
- Low order defect rate (you need to keep your returns and/or chargebacks at less than 0.5% and not have too many A-Z claims)
- A tracking number is required for every business order package
- A packing slip is required with every business order package
- A purchase order number with every business order package when given by the customer
Who is eligible to sell on Amazon Business?
In order to use Amazon Business, you need to be on the Amazon Professional Seller account plan. This costs £28.75 (including VAT) and is a recurring monthly fee.
If you are a pro seller on Amazon already, then there are no additional sign-up fees. In fact, you can trial out the business marketplace with very little risk at this moment in time.
Although Amazon Business has been created for B2B sales, retail businesses can also sell on the marketplace. This can be a great way to explore a new market, boost your visibility, reach more customers and sell more products.
The B2B marketplace is currently active for business customers based in the United Kingdom, United States, France, Germany, Spain, Italy, Japan and India that can buy products on Amazon Business.
What are the advantages to selling on Amazon Business?
There are several advantages to exploring your opportunities with Amazon Business. Here are five of them:
1. Increase the visibility of your products
With more than one billion users on Amazon Business, you can increase the visibility of your products to reach even an even wider pool of potential customers.
As you may already know, the more your products are seen the more likely you are to see a boost in sales. As businesses tend to spend a lot and buy in volume, Amazon Business provides plenty of potential for growing your business.
Keep in mind that Amazon has taken over search engines in terms of where customers start their product hunts. While this is specific to retail, it’s worth remembering that where the retail industry goes, the B2B industry tends to follow.
2. Low risk
Amazon Business doesn’t charge professional account sellers any extra account fees and there are no additional final sale fees taken from business sellers, making it a fairly low risk way to test out selling products on Amazon Business.
However, there are still standard Amazon referral fees to consider if you’re new to selling on Amazon or Amazon Business.
Integrating your existing Amazon pro seller account is a straightforward and hassle-free process. If you’re considering selling on Amazon Business, today is a good time to test the waters and see what happens.
Keep in mind that Amazon has already announced there may be additional Amazon Business seller fees in the future, so this opportunity may not always exist.
3. Works with Fulfillment by Amazon (FBA)
If you are a Fulfillment by Amazon (FBA) customer then Amazon enables you to carry these benefits over to your Amazon Business account, making selling on Amazon Business an even more attractive prospect
Amazon FBA is a group of services provided by the marketplace to help you trade and fulfill your orders quickly and easily. The basic premise is that you take care of selling your products and Amazon FBA picks, packs and ships your orders for you.
4. Diverse seller credentials
As we have already touched on above, the business marketplace provides sellers on Amazon with the means to list a total of eighteen additional credentials on their profiles.
This helps online businesses who are diverse or fall within a minority, such as being a small business, veteran-owned or female-owned.
As Amazon Business customers can refine their search based on these credentials – with many business customers needing to meet quality sourcing objectives or corporate social responsibility goals – you may enjoy an increase in sales.
5. A fortune is being spent on research and development
Amazon is willing to spend a lot of money and put a lot of resources into its projects. In fact, the marketplace giant spent nearly $23 billion on research and development last year – more than any other US company.
As Amazon continues to innovate the way businesses and customers buy and sell online, it is likely the Amazon Business marketplace will also continue to rise both in terms of seller features and functionalities and customer popularity.
What are the disadvantages to selling on Amazon Business?
Just as there are advantages to becoming a business seller on the new marketplace, there are also downsides to Amazon Business. Fortunately, the former outweighs the latter.
1. Limited communication and control
Amazon doesn’t view the people who buy your products as your customers. The marketplace considers these buyers to be Amazon customers as it is the platform that is trusted by shoppers, not each individual business.
As a result, Amazon limits your ability to communicate with customers. This extends to rules around what you can and cannot include in your packages, making it much harder for you to increase awareness for your brand and business.
If you want more control over your brand and customer experience, then Amazon Business may not be the right move for you. However, it can be a good way to start expanding your business overseas and increase your profits.
2. Extra data and administration duties
Depending on your experience with selling on Amazon, you may find that getting your product data on Amazon is time-consuming and confusing.
There’s different rules for each product category and how your product data is set up is likely to have a big impact on the visibility of your products, which can impact your ability to sell products on Amazon.
3. You still give up profit margin
Although not strictly related to Amazon Business, when selling on Amazon it’s worth keeping in mind you’ll still encounter selling fees.
Depending on the type of products you sell, you may be charged a final sale fee percentage of 7-45% each time you sell products on Amazon.
Working out your Amazon seller fees is key to growing your business and enjoying success on the marketplace.
Explore your Amazon Business opportunities
When it comes to Amazon Business, a common question asked by manufacturers, distributors and online business owners alike is whether it’s a good idea to sell on Amazon or stick to their own website, where they feel they have more control.
However, it doesn’t have to be a case of one or the other. You can sell through both platforms as both offer different opportunities to grow and support your online business.
Of course, you’ll want to make sure that you implement appropriate inventory management software to minimize human error and to synchronize your stock across your selling channels so that you don’t oversell or run the risk of a stock out.
Amazon Business should play a key role in your business strategy. Selling on the business marketplace enables you to boost your visibility, reach more customers and increase your sales. All of this helps you to grow your business and expand overseas with relative ease.
But, in order to build your brand and develop lasting relationships with your business customers, a well-designed website with clear and compelling content is key. Both Amazon Business and your website can support the growth of your business in different ways.
Looking to sell more on Amazon? Find out how to increase your sales on Amazon, with 13 exclusive tips from Amazon sellers.