Amazon Business Teardown: Real Data from the Largest B2B Marketplace
In 2015, Amazon launched its B2B marketplace, Amazon Business. In 2018, the tech giant announced that it had reached over $10 billion in annualized sales. That put it in the top 20 B2B distributors in the US, a feat it accomplished in three years.
Today, Amazon is on the minds of just about every B2B distributor across all sectors. That’s because Amazon’s B2B marketplace sells just about all products. Amazon’s business marketplace isn’t just one sector’s problem.Yet, many B2B distributors haven’t found the best strategy to fight back, and inaction could spell disaster in the near term. By 2021 the online market for B2B supply will reach $1.4 trillion, according to Bank of America analyst Justin Post. Worrying still, he estimates that by 2021, Amazon Business will capture 10 percent of the U.S.’s online B2B market.
However, that outcome is not inevitable. B2B distributors can fight back. And real data from Amazon Business provides the perfect blueprint for what a competitive strategy should look like.
While Amazon’s B2B marketplace boasts a wide catalog, it doesn’t sell every product equally well. In March 2017 Applico launched its Marketplace Tracker to measure how Amazon performs across product categories. The tracker tallies the number of sellers in each category and analyzes how the number of sellers grows over time.
Applico’s recently published Amazon Business Teardown report contains 21 months of seller data in 9 product categories: industrial, automotive, hardware, lighting, tools, material handling, raw materials, janitorial, and safety. It reveals crucial insights into Amazon Business’s strengths and vulnerabilities.A high-level view of Amazon’s B2B seller data reveals the following trends:
The 5 largest product categories are industrial, automotive, tools, hardware, and lighting. These are largely lightweight items that are easy to ship.
Industrial, the largest category with 57,580 sellers, is also the second fastest growing at 30.4% growth.
Janitorial is the fastest growing category at 39.3% growth, even though it is the second smallest with 11,250 sellers.
Raw materials and material handling are the two smallest categories, but they’re gaining ground with 27% growth in 2018. Note that these are primarily heavy and cumbersome items that don’t ship easily.
Applico’s Amazon Business Teardown offers a detailed look at this data, including which sectors are most threatened. The report also includes actionable strategies to compete in the age of Amazon. The report is especially useful for B2B distributors and wholesalers looking to leverage this data into a winning market strategy. Download a free copy of the report here.
Alex Moazed is the CEO of Applico, a marketplace design and advisory firm. He is also the co-author of the best-selling book Modern Monopolies that explains what it takes to dominate the 21st century economy.