Bussiness
Amazon Business jumps into inventory management services
Over the past decade, it’s safe to say nothing in B2B ecommerce has grown faster than product sales transactions at Amazon Business, which surpassed $35 billion in gross merchandise sales by 2022, its eighth year in operation.
They’re going to raise the bar in inventory management.
Brian Beck, managing partner
Enceiba
The mammoth marketplace’s competitors — including prominent B2B distributors like Grainger, MSC Industrial Supply Co. and Fastenal Co. — have also maintained strong ecommerce numbers, with digital transactions accounting for more than half their total sales. A big part of that digital success has been an emphasis on services like inventory management programs and internet-connected vending machines at customer locations.
Amazon Business makes its move into inventory management
But Amazon Business is now also going after inventory management services and industrial vending machines — a move with significant competitive ramifications for the B2B ecommerce industry. At its recent annual Reshape conference, it revealed among several new developments the Amazon Business Restock program as its “first replenishment services offering.”
Amazon Business Restock is already making available some managed inventory services, such as for restocking breakrooms, in a limited number of U.S. cities. Next year, it plans to roll out at customer locations internet-connected vending machines that will dispense such items as personal protection equipment and IT equipment like headphones and record and process the transaction details.
Brian Beck, managing partner of Enceiba, a B2B agency that helps manufacturers and other businesses sell through Amazon, asserts that Amazon is in a position with AI expertise and financial resources to develop inventory management services that could help it capture market share among high-volume contracted commerce.
Amazon Business brings AI expertise
“They’re going to raise the bar in inventory management,” he says, adding that it will likely apply its AI expertise to help predict what its customers will want to have ordered and replenished in inventory stocks and vending machines.
Amazon Business will still have its challenges, Beck adds. He notes that distributors like Grainger, Fastenal and MSC Industrial Supply have deep experience in controlling the inventory they sell, extensive knowledge about their customers’ facilities, the products they need and where they need to access them, and offering consulting services for overall inventory management.
Amazon Business will need to perfect those skills while also determining how to best control inventory from its suppliers, including those that are third-party (3P) sellers that retain inventory ownership until sold to an end customer.
Still, “what Amazon is really good at, they’re going to look at what the customer needs, and they’re going to figure out, regardless of how they source the product, how to get the product to the customer,” Beck says.
He adds that inventory management services will likely help Amazon Business go beyond its existing strength in long-tail commerce, the occasional or one-off purchases companies make outside of contracted purchasing programs, and build market share among high-volume purchasing contracts with B2B companies.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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