Amazon is the proverbial 800-pound gorilla on the consumer retail front, so who was really surprised in April, 2015, when the tech giant rolled out Amazon Business? At the time, Amazon billed its new business marketplace as having combining the "selection, convenience and value customers have come to know and love from Amazon, with new features and unique benefits tailored to businesses."
Amazon Business, the company said upon the April 28, 2015 rollout, would go big by "providing easy access to hundreds of millions of products – everything from IT and lab equipment to education and food service supplies – as well as business-only selection and pricing." Amazon Business customers could also count on free two-day shipping on" tens of millions" of eligible items, multi-user business accounts, approval workflow, payment solutions, tax exemptions, dedicated customer support "and much more."
Let's break down Amazon Business and its features.
What is Amazon Business?
Amazon Business provides its users purchasing solution for their registered business of any size. Each business can assign users that are allowed to go in and purchase business supplies on Amazon on behalf of their employer. The main administrator can add authorized users, or remove them, as needed, and can manage payment methods, shipping addresses, approval work flows, reporting options, etc. all based on the needs of the business.
"We provide easy access to hundreds of millions of products – everything from IT equipment to janitorial supplies – to businesses of all sizes and across industries," said Martin Rohde, director of the commercial vertical at Amazon Business.
Price savings and shipping options
Amazon Business offers exclusive price savings options for its registered business members, as well as shipping benefits. Anyone with a business-user account can purchase via Amazon.com. Account holders receive price breaks on multi-unit purchases, general price cuts on millions of business products, and gives users the opportunity to compare prices from multiple sellers. You can even request quantity discounts from some sellers. [See Related Story: How to Make Amazon Prime Work for Your Business]
"We constantly hear from Amazon Business customers that our business-only prices across such a vast selection of products is key to solving their 'tail spending' challenges (money spent on non-planned or managed supplies, spanning a broad range of categories). Tail spend can be costly and time-consuming for businesses, as it often requires managing hundreds or even thousands of different suppliers," Rohde explained.
As far as shipping goes, you can apply your existing Prime account to your business account at no additional cost, however, this is reserved for single-user business accounts. It comes with unlimited, free two-day shipping on eligible items. If you don't already have a Prime shipping account, you can add one to your business account based on how many users or employees you have. Up to 10 users is $499 a year, up to 100 users is $1,299 per year, and more than 100 users is $10,099 per year. Also, you can sign up for a free 30-day trial.
"We recognize that business customers need to manage a single payment relationship with Amazon Business and receive standardized invoices, while also having the flexibility to purchase from millions of suppliers" said Rohde.
Either individual or shared payment options can be added by administrators of the Amazon Business account. Shared payment methods include credit cards, debit cards or an Amazon.com corporate credit line. Any authorized user of your business account can use the payment method of choice to purchase items on behalf of the business. While all authorized users will be able to use the card registered, they will only be able to see the last four digits to ensure security.
Amazon Corporate Credit Line offers expanded user and management options, including the ability to authorize multiple buyers on a single account, download order history reports and pay by purchase order, according to Rohde. It also offers easy-to-understand statements and no annual fee. Administrators can manage individual and shared payment methods and shipping addresses to make ordering seamless for all purchasers.
Advantages for small businesses
Many businesses have the opportunity for tax exemption under the Amazon Tax Exemption Program (ATEP). Amazon provides a tool that helps users determine if they qualify for the program, and inquires about in which states the business qualifies for a tax exemption as well as the type of exemptions for which your organization qualifies. The administrator of the account goes through the process to set it up for the business account.
The program then allows customers to apply their tax-exempt status to eligible purchases from Amazon and all of its affiliates. Another good thing is you don't even need to specifically have an Amazon Business account to take advantage of this benefit.
Amazon Business also prides itself on transparency into the supply chain purchasing process with the analytics dashboard.
"Customers can look at their spending activity and total costs on purchases at the individual, purchasing group or type of spend level – giving small businesses the information they need to better control their bottom line," Rohde said.
He added that small business sellers on Amazon Business have the opportunity to grow their sales by reaching millions of business customers across the globe.
What Customers Say
In touting its "tailored business experience," has Amazon come through on the promise of Amazon Business two years later? It's growing number of customers certainly think so.
"We have our Amazon Business account to mainly take advantage the Amazon Tax Exemption Program," states Rob Boirun, chief executive officer at The Reviewster Network.
"So, in addition to getting tax free purchases, we love the program's ease of use in ordering and reordering our most common items," Bourin says. "When we run out of printer toner, or other office supplies, we can easily order within a few seconds and the items are in the office two days later."
Bourin says his company has also used Amazon Business for larger purchases – leveraging payment options where the firm can split up the payments between different people in the company. "For example, we purchased a new Wi-Fi router and were able to 'split up' the bill so that four different people using it would each pay 25 percent," he adds.
Business experts say there are ways that Amazon Business helps some companies more than others, and those decision makers should know that before signing on with the program.
"Amazon Business works the best when you have products that can be purchased in bulk for businesses," notes Chad Rubin, an e-commerce business owner and a "Top 50" Amazon seller. "That's a big benefit, as you can incorporate bulk pricing to boost sales and provide a discount to businesses who need a larger amount of your product."
Rubin points out that when Amazon Business customers use bulk pricing, they can reach a new audience that tends to spend more – mainly with businesses and corporate accounts.
"It definitely helps when you use bulk pricing to attract customers who need more of certain products," he adds.
Krista Fabregas, ecommerce staff writer at New York City-based Fit Small Business, who regularly chronicles the progress of Amazon, on both the consumer and business side, and who also sells regularly on the site, says that selling on Amazon "definitely has pros and cons, but is often worth the effort for a variety of sellers"
It's especially ideal for manufacturers to reach buyers direct, Fabregas notes. "The first trick for success on Amazon is having at least a 250 to 300 percent markup (or more) over cost (her experience is based on a retail plus/$30 price point). "Any lower and Amazon's high seller fees quickly eat into profits," she warns.
As Fabregas says, there are upsides and some downsides in using Amazon Business for your company, with the former seemingly outweighing the latter.
See if there isn't a good business case for leveraging Amazon's enterprise side for your company. In that sense, it's good to have the 800-pound gorilla on your team.