3 Tips for Facing The Amazon B2B Behemoth
Posted by Hayley Null, Manufacturing Industry Marketing Lead
In the manufacturing and distribution industries, the most recent – and likely the most profound – disruption is the rise of Amazon Business, Amazon’s B2B marketplace and platform.
In the final part of a webinar series on Amazon and product companies, NetSuite sat down with Ricky Hernandez, Director of ecommerce Sales of Avery Products Corporation, and Polly Weston, Director of Marketing of Bailey Hydraulics. The pair discussed how their organizations decide whether to partner with Amazon Business and how that decision affects company strategy. While both have different approaches to Amazon Business partnerships, they agree on three key takeaways that relate to Amazon Business and its effect on the manufacturing and distribution industries.
Never, ever take your eye off Amazon.
Whether your organization currently partners with Amazon Business or not, you should constantly evaluate its position in the market and whether a partnership makes sense.
Amazon has changed how both Avery Products and Bailey Hydraulics go to market. The rise of Amazon Business pushed Avery to consider sales channels outside their traditional catalog channel. They decided to become an early adopter of the AmazonSupply – now Amazon Business – platform as a way to reach new customers through a new channel. Today, Avery considers Amazon a major growth platform and large sales driver.
Meanwhile, Amazon has been a game changer for Bailey’s B2C business. The company sells to two main customers – direct to consumer (traditional B2C) and through dealer distributors (OEMs). Amazon.com has helped grow their traditional B2C business through improved brand and product awareness, supercharged website traffic and increased overall sales volume. Bailey reviewed an Amazon Business partnership in the past but decided against it to avoid to cannibalizing business from their trade partners, who sell on Amazon Business themselves.
While both panelists have seen tangible business benefits from partnering with Amazon, they provided some caveats to working with Amazon Business that other companies should take into consideration when looking into a partnership. Some challenges they highlighted, include counterfeiting, brand damage, and unauthorized retailers. When investigating whether it makes sense to sell directly on Amazon Business, it’s important to analyze the trickledown effects it would have on your company. You don’t want to cannibalize sales or damage established business partnerships. If your company decides the benefits outweigh the risks, it’s important to have an Amazon strategy in place.
Determine where your customers buy. Then be there.
When deciding whether to sell via Amazon Business, look through the eyes of your customers. Are your customers or trade partners buying online? If so, what are their expectations when shopping on sites like Amazon and Amazon Business? If not, could you reach additional audiences with an Amazon Business presence?
Avery’s business mix is 60 percent business customers and 40 percent retail customers. Amazon Business speaks to the core business consumer that the company has always supported and was an extension of what the company was already doing. Furthermore, it created another platform for them to reach their business customers and helped Avery accelerate the growth they were already experiencing.
For Bailey, Amazon.com is a perfect fit for their workshop customer (small business owners, farmers) who are looking to replace only a part or two. When searching for a product, these customers typically search on Google or even go straight to Amazon to find a specific product. For this reason, an Amazon.com presence made sense, and Bailey has seen B2C sales skyrocket with the introduction of Amazon selling. Polly attributed some of this success to partnering with a third party who optimizes their Amazon listings, images and prices and positions their products in a way that gains the audience and traction they’re looking for.
Bolster your new sales channels with new technology.
Automation reduces the burden of increasing the number – and management of – sales channels.
Avery has invested heavily in technology to develop their own ecommerce channel and improve content and SEO on their website. The company is also focusing on increasing supply chain and operational efficiency to better manage their Amazon Business partnership. Finally, Avery uses technology to mine through and manage their Amazon data for actionable insights into business performance.
For Bailey, it’s key to have a NetSuite connector linking their ERP system directly to their online Amazon marketplace. The company can identify the best place for their products and the appropriate pricing. This automation allows Bailey to push products to multiple marketplaces and manage inventory efficiently and easily, helping them maintain good standing with Amazon and increase sales. The NetSuite connector allows Bailey to have more control over their relationship with Amazon and their presence on the platform.
As Amazon Business and its partners are constantly changing and improving, it’s important to monitor the market and adapt your business strategy as necessary. To learn more about how to manage this cycle of continuous improvement, download the webinar here or go to netsuite.com/amazon-business.