I had a chance to talk to tED Magazine about the challenges Amazon poses to independent distributors with their new Amazon Business Prime Shipping (launched November 2017).
Here’s an excerpt:
This is the biggest and scariest announcement we’ve seen from Amazon in the last several years and distributors should be terrified. Amazon has now extended a core pillar of its company to business customers and we can be assured that it will have Amazon leadership’s full attention and backing. Amazon has the scale, fulfillment, and procurement capabilities to not care whether they make money on the products they’re selling because they make so much money on Prime. This announcement is a big swing at small businesses like distributors and contractors—now, a small electrical contractor can give 10 people access to Business Prime for $499 (just $50 per person, half of the $99 Prime cost to consumers), save costs on shipping (which can definitely add up), and receive any product in under two days, enabling small companies to have great service at their fingertips. Amazon’s reach today is extensive—recent studies show that 55% of all online product searches today take place on Amazon first instead of Google, where customers would find their local distributor or retailer, so this announcement is definitely a major threat to distributors.