Estimated reading time: 3 minutes, 9 seconds

What is Amazon Supply Doing?

how-to-research-your-competition-pop 8726It must be that time of year. Ever since Amazon began its foray into B2B products, business writers feel obligated to explain every so often how Amazon Supply (AS) will steamroll its new competitors. The latest article, by Clare O’Connor on the Forbes site (see it HERE), doesn’t break much new ground.

Let’s see, what has Amazon Supply been up to? Well, according to the story they’ve added:


  • Lots of products and categories, with their item count now exceeding 2 million 
  • Some functionality to the AS website

Not a whole lot there. It’s difficult to discern just how and what Amazon Supply is doing, since their sales aren’t reported separately, they’re still considered ‘beta’, and management doesn’t talk about them at all. Other than the two ‘new’ nuggets listed above, all we can do is speculate about their strategy. We know the size of the market, how fragmented it is,’s size, how they typically approach new developments, their usual pricing strategy, and the Amazon distribution network layout. That’s not much more than we knew the last time a batch of articles were published about AS.

However, one unique aspect of the Forbes article is that it does point a finger directly at Grainger as being one big obstacle in Amazon’s path. That’s interesting, since Grainger owns only 6% of the market and has in the past been lumped in with ‘other major players worried about Amazon Supply’. Clare gets a bit more specific in this article (disclosure: I’m a former long-time Grainger employee). I wrote about the AS entry into the B2B space back in 2012 (read it HERE), so let’s see what has changed.

A couple key points were made in the article: process is extremely important in the B2B space, and high-touch value-added services likewise mean a lot. There’s no doubt Amazon Supply will sell much product, but in the essentially zero-sum game of MRO, at whose expense? Grainger and every other industrial distributor face price competition every day. In fact, from the time Amazon opened their doors to sell stuff other than books, Grainger customers have bought from them. But price-shoppers aren’t in the Grainger sweet spot- customers who recognize cost rather than price, who expect suppliers to mesh with their processes, and who value the services provided by distributors as part of their relationship, are. It gets back to a key difference between B2C and B2B purchasers. B2B is all about process, product, and value, while B2C has a price focus.

Yep, Amazon Supply will pick off some price-focused B2B customers. That’s already been acknowledged and I’m sure Grainger and its competitors in the channel know that. However, the typical Grainger customer appreciates:


  • The offering of well over a million (and growing) products across many categories 
  • Technical expert availability 
  • Hundreds of physical locations in North America (and a growing presence overseas) 
  • Thousands of sellers who ‘touch’ customers 
  • Corporate account programs 
  • Many product and technical services, such as VMI, vending machines, eProcurement, & EDI 
  • Rock-solid operations 
  • One of the most successful B-to-B websites on the internet, which includes a number of features that provide purchasing process support to customers

Amazon Supply can certainly match some of that, but the value-add of the ones they don’t, and what the whole ‘package’ represents, are what will continue to make Grainger successful. B2B customers will recognize value and continue to buy from those who provide it. There will be carnage along the way, I’m sure, but those B2B companies that add value to their customer relationships will survive and prosper.

Read 15116 times
Rate this item
(0 votes)

Visit other PMG Sites:

click me
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.