The Struggle Of Facing The Amazon Business Marketplace

Colossal e-tailers like Amazon Business are legitimate threats to jan/san distributors everywhere. The company’s expanding network of fulfillment centers and terrific web presence makes its order-to-delivery process simple and fast. To make matters more challenging, Amazon announced its rolling out its popular Alexa virtual assistant to the commercial market.

Despite Amazon’s deep pockets and chameleon-like adaptability, software providers believe jan/san distributors can not only compete with, but also beat out, the Amazons of the world through the use of an excellent customer service package boasting vendor managed inventory (VMI) software.

The Amazon known to the common consumer — the site hundreds of millions of people go to buy popular books, the latest fashion trends and the coolest gadgets — is one of the internet’s kings.  Amazon Business, which the company claims is the same as Amazon with the addition of tailor-made business features, boasts hundreds of millions of products, too. After creating a free account, companies can start evaluating product suggestions catered to their business or use the all-powerful search tool provided.

For example, a user can type “floor cleaner” in the Amazon Business search bar. To the left, they can select “commercial floor cleaners,” and further refine their search by selecting results for janitorial and sanitation supplies. Suddenly the user will be swarmed with products all with ratings and reviews from real people.

Once a building service contractor or facility cleaning manager decides what type of product it would like to buy, it can use Amazon Business’ website to compare deals. Amazon boasts businesses can satisfy their sourcing requirements by surveying a page full of multiple offers from a variety of sellers.

Amazon offers increasingly more price breaks with purchases, meaning the buyer will save more by getting multiples of a product. Amazon is beginning to offer price discounts on products only available to businesses and a growing number of sellers offer products exclusively on Amazon Business.

Once it’s time for a business owner to place an order, they have the option of selecting two-day shipping of eligible products with Amazon’s Business Prime Shipping.

“The two big advantages they (e-tailers) have are low or nonexistent minimum order sizes, and ease of ordering from the smart phone,” says Bob Hestenes, president, Step1 Software Solutions, Newbury Park, California.

Amazon’s large network of fulfillment centers allows businesses to choose how and when they want to receive their order.

“Amazon has perfected the pack it and ship it model and with their ever-growing network of fulfillment centers, they can deliver quickly and usually at a lower price — unless you need something immediately, says Dan Kaminstein, senior product manager, Epicor Software Corporation, Austin, Texas. “So, if you are a customer without an urgent need and can plan your orders, it’s hard to beat Amazon.”

Amazon’s virtual assistant, Alexa, has been a hit since it launched in the fall of 2014. The assistant is used in the Amazon Echo and Amazon Echo Dot devices that increasingly plug into the homes of consumers worldwide. Now, Amazon is rolling out Alexa For Business, which will help bring voice commands and ordering ease to the commercial setting. 

The accounts that seem to be most at risk to the e-tailers are the distributor’s small accounts, says Hestenes. He says his company classifies small accounts as those that contribute less than $1,000 a year in profit

Randy Lane, who handles distribution sales for PIC Business Systems, San Antonio, Texas, believes jan/san distributors might have to consider offering Alexa For Business to small accounts if they want to keep them. 

“I think distributors have to embrace Alexa,” says Lane. “If you ignore Alexa, you run the risk of a small company buying Alexa and ditching them.”

Alexa represents a new wave of technology that distributors need to keep an eye on, even if they don’t want to bring it into their business, says Lane. Those that do want to use Alexa, don’t have to have an Amazon storefront, he says.

“Yes, with Alexa you can very easily order from Amazon and use Amazon pay for your purpose,” says Lane. “Those are self serving abilities built in for Amazons benefit. There are a lot of companies who are creating new skills for Alexa that can make the device useful in the future for a distributor who finds themselves competing against Amazon.”

Amazon Business doesn’t offer the face-to-face interaction  that distributors offer. However, the site allows a purchasing business to send technical questions directly to the manufacturer via a website chat or email, so there is some assistance.

However, the value of face-to-face contact could be changing after a shift of power that might favor Amazon. Millennials don’t mind in-person interaction, but they’re just as comfortable with digital conversation or more infrequent face-to-face meetings, says Lane. While baby boomers might enjoy seeing their sales representative weekly or bi-weekly, millennials are likely satisfied seeing that same person once a quarter.

Lane expects more millennials to gain some or more purchasing powers over the coming years, a change he believes plays to the favor of Amazon.

If more distributors adopt vendor managed inventory software, than they’ll be more likely to appeal to new wave end users. Until then, the young might favor Amazon.

“You need to have this new software. You need to have this VMI,” says Lane. “Distributors need to be able to push out projects at a moment’s notice.”

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Vendor Managed Inventory Software Benefits Local Distributors