Can Amazon Effect Threaten Traditional B2B Enterprises?

According to the world clothing and shoe net, Melanie Lichtfeld is the boss of Madison, a water company in Wisconsin. In the past, the company often told customers that they might have to wait several weeks before they could buy a new kitchen sink from local suppliers.

And now she passes

The parts you ordered are available in two days.

Now in the United States, more and more plumber, electricians and other contractors are choosing to buy industrial components on the Internet. Lichtfeld is just one of them.

Amazon's B2B business platform now sells all the products from light switches to hydraulic valves. Last month, the company proudly said its business customers exceeded 1 million.

Amazon is joining many electric business sellers to join the US $130 billion B2B.

Up.

In the past, this business was still largely carried out by salesmen running around the local stores to find a national distributor that caters to the needs of large enterprises, but now customers are being promptly compared shopping and free delivery to "abduction".

W.W. Grainger, the largest industrial supplier in North America, has sold more than 10 billion dollars a year.

Over the years, the company has been losing customers to cheaper prices, the company said.

Competitors, the company had to cut its price by 25% this summer.

MSC Industrial Direct is a leading supplier of metal parts. The company usually prints a 4500 page "The Big Book" product catalog, but now the printing volume of this catalog has been greatly reduced.

Today, 60% of the company's sales are from the electricity supplier channel, compared with 41% five years ago, including automatic vending machines installed on the factory floor (automatic replenishment).

Analysts said that the sales of e-commerce sellers have already grabbed most of the sales growth in the industry, and triggered concerns about the future of traditional suppliers.

Lichtfeld said local suppliers of Madison have stopped selling many products that can be easily bought online.

She also began selling spare parts on Amazon.

Despite Amazon's sales of $136 billion last year, industrial components account for only a small proportion, and the company has had a disruptive impact in apparel, video and cloud data services.

As in the past, industrial suppliers may be in a price war, and sellers who sell electricity only have the advantage because they do not spend a lot of money on maintaining branches and salesmen's network.

Amazon is changing the traditional way of selling, that is, allowing distributors and manufacturers to sell products directly to businesses on their platforms, thereby eliminating the middleman link and weakening the role of traditional local suppliers.

It also provides one click order and pparent pricing, which may be common in retail business, but is not so common in the industrial world.

Prentis Wilson, vice president of Amazon Business, said: "consumers just want to get Amazon's buying experience at work."

The Amazon Business platform is the B2B platform launched by Amazon in 2015.

He said that for industrial components, many customers are off the shelf spot orders, and now Amazon is able to control the procurement activities of some large enterprises on its platform.

Shon Altbaier-Meere, owner of Mason, a housing construction and renovation company in Ohio, said she used her personal account to purchase supplies.

She also buys parts from other websites through Google's comparative shopping service.

The world's leading equipment maintenance, repair and operation (MRO) industrial distributor Grainger, most of its revenue comes from large customers such as manufacturers and government agencies.

Grainger said in July this year that the purchases of these large customers were still growing, and that sales increased by 1% last year, up 7% this year.

But since the beginning of 2016, spot purchases have fallen by 25%, amounting to about $3 billion a year.

Elizabeth Ubell, director of Grainger's electricity supplier, said that after cutting prices, Grainger began to win back more spot purchases and smaller customers, which were not attracted in recent years.

She said that the goal of the company is not to beat the sellers of electricity on the Internet, but to keep close enough to them, and to rely on Grainger's expertise and reliable delivery services to complete the sales.

Ubell said: "Grainger's position in the market is a high-end service provider, so some of our prices will be inconsistent with the price of the market."

Compared with Amazon, some dealers started relatively early.

Many companies have provided decades of basic spare parts for next day delivery services, which are experts who are quick to complete orders from warehouses across the country.

Even smaller companies, such as United Electric Supply (a regional distributor in Newcastle), have increased order tracking and delivery services on the same day.

The company's chief executive, George Vorwick, said the industry "will not allow some people to take our business lightly."

These dealers also provide additional services, and Amazon needs to invest a lot of money to match them.

For example, Vorwick said, United Electric Supply will find the necessary parts for a power system worth 10 million US dollars from the blueprint of the client, and Grainger arranges the staff in the factory to manage the inventory.

Steve Baruch, head of marketing and strategy, said MSC Industrial Supply would cut or dye metals to meet customer requirements.

Others worry that buying parts on the Internet will increase the risk of buying counterfeit or inferior parts.

In recent years, counterfeit products have become a major problem for Amazon, which has led to the prosecution of sellers selling counterfeit goods on its website. The company also recently provided large customers with a refund for the quality problems of the glasses.

Doug Workman, owner of the Liberty Pure Solutions company in Phoenix, Maryland, said he would still buy most of the pipeline supplies from local dealers, though he would search for cheaper parts online every day.

He said he would worry about his huge responsibility to buy a bad part.

He said: "on the Internet, you can not touch and see the actual products, it is difficult to determine who should be responsible for quality problems."

More interesting reports, please pay attention to the world clothing shoes and hats net.