With more than $30 billion in B2B sales and as the starting point for almost 70% of product searches, Amazon has now emerged as one of the world’s largest and most influential distributors.
Is Amazon destined to put large swaths of B2B companies out of business by eviscerating the value of the traditional distribution model?
Or does the marketplace behemoth play a different role in the customer journey and distributors can instead utilize Amazon to grow sales without risk of accelerating their own demise?
Master B2B Co-Founders Andy Hoar and Brian Beck debate this key issue with an all-star panel of industry executives in a searing Un-Webinar debate, broadcast LIVE from B2B Online in Chicago.
Key Takeaways:
Team “Amazon Is NOT an Existential Threat to Distributors”
Ron Veiders – Director of Marketing at Dynabrade
Ryan Lee – Founder and CEO of Nautical Commerce
Team “Amazon IS an Existential Threat to Distributors”
Jason Hein – Principal B2B Visionary at Bloomreach
Gregg Walker – VP eCommerce at Bulbs.com
Question 1: Why is amazon an existential threat?
Jason Hein: A buyer 15 years into their career today has bought everything they’ve bought online since they were 7. Most distributors haven’t adapted fast enough, and now they’re so far behind they can’t catch up.
Gregg Walker- Young procurement managers their whole life has started their product searches on Amazon their entire life.
Ryan Lee – Amazon is obviously in a strong position, but B2B is about relationships and Amazon is transactional. It’s about experts guiding you through projects.
Ron Veider – Our buyers find that after they buy something on Amazon they sometimes discover that they need an extra part, or they need help with assembly. Each of those adds time to the project. When they buy directly from the distributor, they can get the service they need to keep projects on time.
Brian Beck – Distributors aren’t going away because of the unique role that they play. Amazon has a role to play – when a customer knows exactly what they want, and they want it fast in a small quantity. But each has a role.
Question 2: Who is better at cultivating B2B customer relationships?
Veiders – Is Amazon going to walk onto a shop floor and understand the job that needs to be done, let alone doing that in an ongoing way? The initial phase of the sell is critical because it builds trust and only a distributor can do it.
Walker – That expertise is coming. Look at job listings for Amazon and see how many postings they have for MRO product specialists. They’re hiring them in droves and they’ll bring that expertise into the website. Younger procurement people don’t want to speak with a salesperson.
Hein – We’re in a world where there are so many points of interaction on the website that we can build infinitely more knowledge by what following what visitors do online than we can by talking to them on the phone.
Walker – Plus, Amazon will build out installation expertise as well.
Hein – Amazon will hire the product experts and manufacturers will pay for it.
Veiders – The distributor has a role – and a sustainable role- with service.
Question 3: Amazon has extensive infrastructure, why isn’t it applicable to a B2B environment?
Hein – Distributors have trained manufacturers for years to do their own logistics. 20 years ago distributors said “I don’t want to hold inventory” so they had manufacturers drop ship. And now that manufacturers have the capabilities to do that and nothing will stop Amazon from using manufacturers to drop ship items.
Walker – Amazon’s fulfillment network is nothing short of elite.
Veiders – How many distributors are actually paying the fees to ensure 2-day prime delivery? Plus, we’re nowhere near the point where we’re capturing 75 years of expertise in an application.
Beck – Smart distributors will work with Amazon and work direct. It can be incremental.