What is Amazon Business? A Complete Guide for 2024

Amazon has revolutionized the world of online shopping. What started out as an online bookstore now offers everything imaginable at the click of a button. But Amazon Business takes the convenience one step further – it‘s an online B2B marketplace tailored specifically for the needs of businesses.

In this complete guide, we‘ll cover everything you need to know about Amazon Business, including:

• What Amazon Business is
• Core benefits for your business
• Difference vs. Amazon Prime
• Products, suppliers and pricing
• Purchasing, billing and payment
• Business Prime explained
• Delivery, logistics and procurement
• Budgeting with business analytics
• Success stories and key statistics
• Tips to get started
• Future outlook

Let’s dive in!

What is Amazon Business?

Amazon Business is an online B2B marketplace owned by Amazon that allows registered businesses to easily purchase supplies and services they need to operate. It provides tailored features for organizations across industries looking to simplify procurement.

Who is it for?

Amazon Business serves organizations of all sizes, from small companies to large enterprises:

• SMBs: Benefit from competitive pricing, streamlined purchasing and flexible delivery
• Enterprises: Leverage dynamic pricing, API integration and consolidated analytics
• Public Sector: Access contract pricing, diversity programs and nonprofit registration

Core benefits

Key advantages Amazon Business offers over traditional business purchasing include:

• Huge product selection – Access millions of supplies and services spanning IT, office, maintenance, medical and more

• Competitive pricing – Enjoy quantity discounts, business-only pricing and tax-exemption eligibility

• Simplified procurement – Easily manage purchasing, track orders and strengthen oversight with workflow approvals

• Business Prime benefits – Unlock unlimited fast shipping, 5% back in rewards and early access to deals (for paying members)

Simply put – Amazon Business takes the convenience companies rely on Amazon for as consumers, and tailors it to the specific needs of organizations.

How Amazon Business Differs from Amazon Prime

Many businesses owners are understandably curious about the difference between Amazon Prime and Amazon Business.

While Prime focuses purely on serving individual consumer needs with entertainment and free shipping, Amazon Business offers tailored features for companies, like:

For Businesses

• Multi-user accounts
• Approval workflows
• Purchase order management
• Shared payment methods
• VAT identification

For Organizations

• Dynamic pricing
• API integration
• Consolidated analytics
• Contract pricing
• Nonprofit registration

Additionally, Business Prime provides member-only benefits designed for businesses, like unlocked discounts and 5% back on eligible purchases.

So while Prime serves individuals, Amazon Business serves organizations with features optimized for commercial, work-related purchasing.

B2B Ecommerce‘s Trillion Dollar Potential

Although B2B ecommerce represents a fraction of the overall B2B market today, it shows tremendous room for growth in coming years as business purchasing shifts online.

Globally, B2B ecommerce gross merchandise volume is projected to reach $20.9 trillion by 2030. This indicates a lucrative opportunity for platforms like Amazon Business to continue disrupting legacy distribution models.

Early B2C ecommerce success stories such as Amazon and Alibaba are now turning attention towards replicating this frictionless procurement experience for enterprises. And COVID-19 may have simply accelerated an inevitable digital migration by forcing remote work and supply chain diversification.

Amazon Business Growth and Trajectory

Since launching in 2015, Amazon Business has wasted no time staking its foothold in the enterprise ecommerce segment, which presents a $1 trillion total addressable market (TAM) in the US alone.

In 2021, Amazon Business recorded over $31 billion in US B2B gross merchandise volume. This represents 70% year-over-year growth, signalling the momentum this marketplace is gaining.

To put this astonishing figure in perspective, Amazon Business is already generating more revenue than established B2B players like Grainger – demonstrating the sheer dominance Amazon can achieve once applying its proficiencies to new verticals.

And this growth remains consistent globally. Amazon Business expanded into Europe in 2017, and has since reported $12 billion in overseas B2B transaction volume while launching localized sites for France, Italy and Spain.

Industry researchers expect Amazon Business to command up to 7% of the total addressable B2B ecommerce market within coming years.

Expanding into New Verticals

Another sign of Amazon Business‘ ambitious expansion roadmap is its acceleration into new specialized verticals like:

• Healthcare – With Amazon Pharmacy and Amazon Clinic launch, healthcare now represents the company‘s fastest growing procurement segment

• Advertising – Self-service Amazon Advertising platform helps brands promote products directly to in-market buyers

• Hospitality – Supports purchasing needs across lodging, restaurants, entertainment venues and tourism

Diversification into these multi-billion dollar sectors further grows Amazon‘s B2B ecosystem and defends against any tapering in core retail categories.

And such moves remain consistent with the company‘s track record for redeploying capabilities into white space opportunities, as evidenced by its historic expansions from books into consumer electronics into cloud services and more.

Comparing Top B2B Ecommerce Players

Increasingly companies have several major B2B purchasing platforms to evaluate or choose between:

Each serves a distinct B2B niche. But what sets Amazon Business apart is its balance of value, convenience and selection – bundling the affordability businesses expect from wholesale channels with the broad inventories and fast shipping of leading e-tailers.

And over time, Amazon Business aims to displace even more specialized competitors by matching their vertical expertise while cross-leveraging Amazon‘s supply chain and technology infrastructure advantages.

AI and ML Enabling Smarter Procurement

Increasingly AI and ML advancements are supporting automation to simplify procurement across Amazon Business:

Guided purchasing helps steer buyers to optimized decisions leveraging data on past behavior patterns while minimizing maverick spending. Pre-negotiated discounts and pricing further optimize suggested choices.

Smart reordering streamlines recurring purchases by dynamically forecasting demand and preferences, enabling just-in-time fulfillment.

Anomaly detection spots unusual spending activity to mitigate fraud and enforces policy guardrails without impeding progress.

Contract optimization algorithms process millions of data points across product catalogs, suppliers and customer demand to predict ideal terms for multi-party agreements.

And these capabilities stand to improve continuously thanks to Amazon‘s industry-leading investments in AI research. Such technologies already accelerated Amazon‘s consumer business growth, and now bring similar efficiencies its commercial expansion.

Sustainable and Diverse Supplier Options

Modern enterprises increasingly prioritize supplier diversity and sustainable sourcing when evaluating procurement channels. Amazon Business delivers on both fronts:

Its Climate Pledge Friendly program deem products having one or more sustainability certifications spanning:

• Energy efficiency
• Renewable materials
• Responsible manufacturing

And participating companies can filter products by various eco-standards to meet environmental objectives.

Plus over half of sellers on Amazon Business are small businesses, helping large enterprises meet supplier diversity requirements.

This combination of extensive green product designations and small business offerings makes Amazon Business highly capable of aligning with contemporary procurement policies.

Retail Customer Conversions

Interestingly, over 50% of Amazon Business accounts originate from conversions of existing Amazon consumer members.

The frictionless path from retail shopping to business purchasing helps Amazon both enroll new companies on the platform while unlocking higher-margin sales to current customers.

"We were already frequent Amazon shoppers for personal goods. Getting set up with Amazon Business took less than 5 minutes, allowing us to effortlessly consolidate all work supply orders."

Mae T., Content Creator

This migration exemplifies a key go-to-market advantage for Amazon Business – leaning on established consumer familiarity and trust to accelerate business traction.

Compelling Customer Success Stories

Across categories, Amazon Business clients report stellar cost and time savings applying the platform‘s pricing leverage, selection breadth and ordering convenience to replace incumbent vendors.

Pet food manufacturer Wild Earth simplified ingredient procurement of meats, supplements and emulsifiers while averaging 60% discounts off traditional industrial providers for bulk quantities.

Office manager Anita S. switched from Office Depot to Amazon Business for headquarters supplies, sharing:

"We instantly saved 35% on basics like printer paper and pens while gaining next day delivery speed."

Oil and gas inspector agency Maverick decreased tooling and spare part purchases 70% discovering many specialty components through Amazon Business priced well below existing industrial parts catalog pricing.

Such examples demonstrate the immense value delivery Amazon Business unlocks once integrated into enterprise procurement workflows.

The Data Behind Better Buying Decisions

looking specifically at Amazon Business Prime member metrics provides additional insight into how data aids procurement optimization:

Reviewing member analytics gives organizations clear visibility into spend distribution across vendors and categories guiding reallocation opportunities.

Having this enterprise spend intelligence fuels data-driven decision making for supply chain adjustments and cash savings that bolster operating margins.

The Future of Amazon Business

Having explored its offerings and value proposition, what might the future look like for Amazon Business? Projections indicate tremendous growth in coming years:

By 2025

• Over $7 billion in US B2B ecommerce market share
• 10+ million business customers globally
• 5-10x increase in third-party sellers providing expanded product depth/breadth

By 2030

• Potential to drive over $1 trillion in US B2B ecommerce GMV annually
• Expanded ecosystems, vertical solutions and procurement automation driving dominance
• Could surpass Amazon retail revenues through enterprise digital transformation

And if its early Small Business and Healthcare procurements are any indicator, Amazon Business carries no signs of slowing momentum in its quest to digitize B2B commerce worldwide.

Tips for Getting Started

Interested to explore how Amazon Business can transform procurement for your company?

Here are tips to accelerate getting started:

Scope needs – Document key purchase categories, requirements, ordinances affecting decisions and pain points around current systems. This frames where Amazon Business can help.

Request quote/trial – Many offerings like Business Prime have short-term trials or quota-exempted piloting, making low risk to test. Identify options for hands-on evaluation.

Compare pricing/supply – Benchmark current vendors against Amazon Business listings to quantify savings upside, using quotes or trials to validate.

Get employee input – Survey your team on where Amazon could most positively impact their productivity, growth and output. Employees nearer decisions often spot opportunities leadership overlooks.

Start small, scale later – When rolling out Amazon Business, consider piloting with a specific department or site before expanding company-wide. This allows quicker optimization.

Following these steps positions your company to best evaluate if and how integrating Amazon Business into your e-procurement strategy can yield productivity and financial advantages.

The Takeaway

This guide covered everything from core Amazon Business capabilities to expert insights on how it unlocks value across numerous industries – plus a glimpse into the future.

In summary, Amazon Business brings the same obsession for customer experience that fueled Amazon’s consumers success to enterprise purchasing. It simply aims to make business buying convenient, informed and financially predictable.

Consider reviewing some of the tips shared as next evaluating if the platform merits deeper investigation for your organization or not. Don‘t hesitate to reach out with any lingering questions.