Amazon Business (B2B): How It Works and Growth Tips

Amazon Business is an additional program specifically aimed at businesses and organizations. Governments, large enterprises, schools, and healthcare organizations – entities that have different and more complex needs compared to individual buyers – could all benefit enormously from Amazon Business.

With the Amazon B2B program, one can create an Amazon Business Account via Seller Central to sell in bulk efficiently to business customers. In today’s blog post, Bobsled’s Zlatana Pejovic has shared all of her recommendations surrounding this program.

What is Amazon Business?

• 5 million businesses worldwide
• 80+ Fortune 100 companies
• 92 of the 100 largest hospital systems
• 90 of the 100 most populous local governments
• 1M business buyers worldwide

Benefits for Amazon Business sellers

• An easy-to-use and familiar account portal, which translates to a smooth selling experience
  Access to the convenient Amazon delivery and fulfillment system, identical to the Seller Central platform
• The ability to access a large number of business customers across a wide range of product categories
• The ability to offer Quantity Discounts which encourages Business Customers to buy in bulk quantities.
• Certain unique certifications (small business, women­, minority­ and veteran-­owned business, ISO 9001­ certified etc) are display to Amazon Business customers throughout the shopping experience, can assist with customer acquisition and conversion rates
• Sellers can offer a tax exemption on qualified purchases to customers that participate in the Amazon Tax Exemption Program – this is particularly useful for nonprofit organizations.

Benefits for Amazon Business buyers

• Centralization of all business buying conversations.
• Access business-only prices, deals, quantity discounts, plus up to an additional 10 percent off with Recurring Delivery on eligible items.
• Integrate Amazon Business accounts with eligible purchasing systems, providing one-click access to Amazon Business with Single Sign-On (SSO).
• Free shipping on eligible items, setting delivery preferences to get eligible orders when and where it is most convenient for an Amazon buyer. 
• Reorder Lists: customers can quickly reorder the items they buy the most.
• Multiple payment methods: buy now pay later, invoice or a corporate credit line (for approved customers)
• Specific reports get linked to Amazon Business Analytics, giving you more awareness of your buying activity
• Business Prime: A separate membership from Amazon Prime, Business Prime offers unlimited, free shipping on eligible orders and more business purchasing benefits such as Spend Visibility, Guided Buying, extended terms for Pay by Invoice.

how does amazon business work?

As previously mentioned, existing sellers (on the Seller Central platform) with a Professional Selling Account can join at no additional cost. To register, simply follow the steps below;

Image source: Amazon

Amazon B2B Seller Requirements

• A seller must have Professional Seller plan to use a Business Account
• Eligibility is based on Seller Account metrics, such as Seller Feedback and past Sales Performance (e.g. seller feedback must be at least 4.5 stars)
• Existing access to all other programs on Seller Central will remain the same after the Business Account has been created.
• Opting out is also very simple, without affecting the privileges of your Seller Central account in any way. This can be done at any point via Settings > Account Info > My Services. Opting out will only remove the business-to-business-specific features in a Seller Central account, and all other benefits will remain the same.

Amazon business terminology

In order to provide a clearer understanding of the B2B terminology, we will define the previously mentioned terms:

• Business Orders. Orders made exclusively by the Business customers, as shown below. These orders will be easily recognized by the Business Buyer label to the right of the Order ID:

• Business Price. A discounted price that Amazon Business (B2B) Sellers can offer to the Business Customers. This price will be visible only to Business Customers.
  Unlike the Business Price, a “Regular price" or "Retail Price" is the retail price for a product for all Amazon customers that are non-business entities, and who purchase products for their personal use only, and not for resale. The Business Price cannot be higher than the Regular Price but they can be equal to one another. A product is allowed to have both the Regular and the Business Price. Also, if there is no Business Price offered for a product, a Business Buyer will still be able to purchase it, but at a Regular Price. If you wish to make a discount offer only for business customers, one can do so by providing only a Business Price without a Regular Price, or by creating separate SKUs solely for business customers. It can also be defined as a discounted price available only to businesses regardless of the quantity purchased.
• Quantity Discounts. Made exclusively to B2B customers to encourage them to buy in bulk quantities.
• Negotiated Pricing. Another valuable option is to add a business customer you want to create negotiated pricing for. This option is available for both 1P and 3P.

To create negotiated pricing for a customer, you will need their Business ID, which they can find in their Business Profile.

💡 Check out Amazon’s Business Seller Program: the B2B e-commerce silver bullet?

As more businesses and organizations shop on Amazon, are we seeing B2B volume increase?

Bobsled has observed the following Amazon Business trends:

• B2B sales make anywhere between 1 and 15% of total revenue for Bobsled clients
• Regardless of the product category, there’s always a portion of sales that comes from B2B
• Categories that are not closely related to B2B have their B2B sales in 1-3% of total sales range
• Brands that sell B2B relevant products have their B2B sales in 11-15% of total sales range
• We’ve seen consistent increase in B2B revenue this year:
• 27.07% increase in Feb
• 23.89% increase in Mar
• 9.68% increase in Apr
• 23.07% increase in May

Best practices for optimizing Amazon Business performance

It’s easy to define the goal of participating in the Amazon B2B program: to facilitate a seamless connection between business buyers and business sellers. Here are some best practices:

Business Price/Quantity Discounts

Combining business price and quantity discounts is the best way to use the benefits of selling in bulk to the business customers. There are two options:

1. Percent Off Business Price - minimum set quantity gets a % off. If a business price is not set, Amazon will use the regular price instead. Therefore, one can combine the business or regular price, but the discount will be offered to business customers only.
   
2. Fixed Prices - minimum set quantity gets a fixed dollar amount discounted price:
   

Amazon Business Sellers should think strategically about what type of discount would appeal most to each customer segment. Therefore, combining Business Price, Quantity Discounts and Negotiated Pricing would be the best way to customize each specific offer through Amazon Business.

B2B Relevant Categories 

Not all businesses would benefit in the same way from this program. Although all sellers and businesses can participate, the program is specifically aimed at:

1. Manufacturers and distributors who specifically serve B2B markets, including: Education - schools, universities and colleges; Medical - dentists, hospitals, laboratories; Food - cafes and restaurants, food production facilities, food packaging; Industrial - raw materials, material handling, protective & safety equipment
2. Companies who can't or don’t want to sell to individual consumers, due to the complexity around sales tax collection and reporting, products not being consumer-suitable, or products with a low unit price that need to be sold in bulk.
3. Sellers who have manufacturer and distributor part numbers (MPN/DPN) or National Stock Numbers (NSN) whose customers may be searching for products using these identifiers.
4. Existing Amazon sellers who already have their products on Amazon, and whose products could also be used in a business or government context - office supplies, technology devices, educational toys and games, even health & personal care.

Pro tip: always aim at having slightly better business prices when selling directly to other businesses outside of the Amazon Business platform. This will help keep existing business customers loyal to your direct offering, and Amazon can be used for reaching new business customers. When business discounts are the same via direct and Amazon, there’s a risk of some existing DTC customers switching to Amazon where your margins will be thinner due to Amazon’s fees.

start your Amazon Business experiment today!

With Amazon B2B becoming more and more popular with both small and large businesses, it is worth considering for most brands and manufacturers. 

A huge benefit of the program is that it’s incredibly easy to set up and wind down. Those that land on the right Amazon Business strategy now are destined to win big as the platform grows!