Trent Guyler, vice president, digital and marketing, The Grasshopper Co.

But in recent years, the company has realized a pick-up in parts sales following the usual end of its peak season in July, says Trent Guyer, vice president, digital and marketing.

One reason, he says, is the mid-July Amazon Prime Day promotional event. Although designed primarily as a big promotional day for retailers and retail consumers, Prime Day also helps to generate spikes in traffic and sales on the Amazon storefronts and product listings of B2B sellers. Amazon scheduled its 10th annual Prime Day this year for July 16 and 17.

Grasshopper is a manufacturer of high-end grass-cutting equipment used to maintain such properties as corporate campuses and the White House lawn. It sells grass-cutting equipment priced at up to $20,000 or more per mowing unit. It also has a network of about 1,000 North American dealers and has customers in about 42 countries. On GrasshopperMower.com, it displays equipment and parts images and details, a request-a-quote feature and a dealer locator. It sells parts through the Amazon.com marketplace and Amazon Business.

Trent notes that Grasshopper customers don’t typically plan their purchasing around promotional events, because if they need a part, they want it immediately.

Manufacturers benefit from Amazon Prime Day

A Grasshopper mower.

Still, he notes that the extra Prime Day traffic has helped Grasshopper experience some of its strongest July sales days for equipment parts.

“The July Prime Day in 2022 actually helped us to have a best day of that month,” Trent says, adding, “Our sales on Day One of Prime Day 2023 uplift us to have one of our three best days in July of that year.”

Trent says Grasshopper runs ads throughout the year to promote its parts sales on Amazon, but nothing specific to Prime Day events. He adds that the reliable rise in traffic is enough to generate increased customer activity through a “halo effect of just being on the platform on Prime Day.”

Dynabrade takes a similar approach regarding Prime Day promotional activity. It relies on an expected boost in traffic rather than specific promotions. Dynabrade is a pneumatic power tools manufacturer.

B2B sellers capitalize on Amazon Business and B2C sales

Ronald Veiders, global brand manager, says the manufacturer tried running a limited Prime Day promotion a couple years ago for one of its popular SKUs and realized only a minor direct benefit. In addition to referring customers on Dynabrade.com to its distribution partners, the manufacturer sells some of its products through a Dynabrade Amazon storefront. Like Grasshopper, Dynabrade has received advice on Amazon marketplace strategy from Enceiba, a digital marketing agency.

Ronald Veiders, global brand manager, Dynabrade

The Prime Day promotion “wasn’t worth it to us,” he says. “We just like being on Amazon, because we know there’s more eyes. And I guarantee we’ll get at least a couple more sales out of it.”

Veiders agrees that Dynabrade benefits at least somewhat from a Prime Day halo effect. But he figures that the boost in activity sparked by Dynabrade’s Amazon presence is tied in large part to the trend of today’s B2B buyers to search online for Dynabrade products and to seek out deals like Amazon’s Prime two-day delivery service.

“Think about the procurement buyers out there nowadays,” he says. “Their first step is Googling, and Amazon is going to come up first or close to it if they’re looking for one of our products. And they’re going to go there to shop, price and compare. And because we’re FBA (Fulfillment by Amazon), it’s Prime and ready to go … for two-day delivery anywhere in the country.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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But many sellers do get a moderate to monumental boost in sales from Amazon Prime Day. The two-day online sales event will generate as much as $14 billion in total U.S. sales, according to Adobe Analytics.

“Prime Day can be important to B2B sellers that are correctly leveraging Amazon Business,” says Brian Beck, managing partner of Enceiba, a firm that helps companies sell through Amazon. “If sellers properly leverage Amazon’s B2B selling tools, they can see rather considerable boosts in sales during this period.”

Amazon Business doesn’t break out specific Prime Day sales. However, the Amazon B2B marketplace is hitting social media and elsewhere with plenty of promotions and deals.

Amazon ranks No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s largest online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by third-party gross merchandise value.

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How does Prime Day affect Amazon Business?

A new promotion entices small business owners, qualifying users with a personal Amazon Prime account for Amazon Business Prime Duo. Once they register and verify for a free Amazon Business account, a small business owner can then use their Prime membership for both B2B and B2C online purchases.

“Whether you’re buying for an office of 100 or stocking up for your journey as a small business owner, you won’t want to miss out on a chance to practice smart business buying this Prime Day,” Amazon Business said.

Other Amazon Business promotions for the Prime Day event cater to larger organizations. They may qualify for 30-day to 90-day free-trial memberships. And U.S. members can earn rewards when they purchase specific brands or complete qualifying actions in their account.

“This Prime Day, customers can shop for Amazon private brands products and earn 2% back,” Amazon Business said. “Stack these savings on top of one another, combining 2% back plus returns from completed actions, which can lead to 4%, 6%, or even more.”

First-party and third-party Amazon Business sales during Prime Day

How many sales first-party and third-party Amazon Business sellers can generate from Prime Day varies widely, say ecommerce analysts.

But done correctly, some Amazon sellers generate sales volume during the Prime Day event that is 30% to 75% higher than marketplace sales on an average business day.

“We see a ‘halo effect’ from the B2C side that impacts B2B sellers when they effectively participate in Prime Days,” Beck says. “Remember that B2B buyers on Amazon are also B2C consumers, and Amazon Business is doubling down in 2024 with additional capabilities specifically for B2B buyers. This includes an effort to make it easier for Amazon customers to sign up for business accounts by adding a B2B capability to their personal Prime accounts (called Amazon Duo).

Buy-Rite Beauty is a supplier of furniture and equipment to beauty salons, barber shops and other related businesses. It sells through BuyRiteBeauty.com, Amazon and its physical showrooms. On some Prime Days, sales are lucrative and generate far more transactions than on a typical day, says chief marketing officer Jeff McRitchie.

“Prime Day may not be quite as big for B2B as it is for B2C, but in past years, we have still seen sales spike more than 400% during Prime Day,” McRitchie says. “There are far more buyers in the market, and they are often looking for and expecting deals. Adding additional deals to your items such as coupons or adding a sale price to some of your items can make a huge difference, especially if you can take advantage of the badging opportunities that Amazon provides.”

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These same merchants also want £1 billion ($1.28 billion) from Amazon. The British Independent Retailers Association is representing the merchants in a newly filed lawsuit. The association alleges Amazon is “illegally misusing their data and manipulating the Amazon Buy Box to benefit its commercial operation and its overall revenues and profit.”

The lawsuit filed in a London court stated that between October 2015 and the present date, Amazon used data belonging to UK retailers on the company’s marketplace. It says the data is non-public and belongs solely and specifically to the retailers.

Amazon has yet to comment publicly on the lawsuit.

The Featured Offer (formerly Buy Box) is a window that appears at the top right of a product detail page. It’s above the Buy Now button.

“This automated component lifts products above the competition to help customers find what they need and compare alternatives based on factors like product price, condition, and shipping speed,” Amazon says.

Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by third-party GMV.

Why are UK merchants filing a lawsuit against Amazon?

Furthermore, the lawsuit alleges Amazon used the data in combination with manipulating the Amazon Buy Box. In doing so, the suit says, Amazon used a product-entry strategy that diverted sales revenue and profits from these retailers to Amazon.

“By misusing their proprietary data to bring to market rival products that are sold cheaper, Amazon is effectively pushing many of the UK’s independent retailers out of the market,” according to the lawsuit. “The consequences of Amazon’s abusive conduct have been to inflate its profits and harm the UK retail sector, especially the smaller independent retailers who are struggling at a time of difficult economic circumstances.”

The lawsuit alleges that Amazon alleges that products sold by third-party retailers were less likely to appear in the Buy Box than Amazon’s products, reinforcing the anticompetitive effect of Amazon’s decisions to take sales away from third-party retailers.

“Amazon set itself up through these unlawful practices to maximize the profit it would make and, in doing so, it must have known about the damage it would cause to third-party retailers,” according to the lawsuit.

“One might ask why an independent retailer would use Amazon if it were so damaging to their business?” says association president Andrew Goodacre. “In reality, we have seen a significant shift in consumer buying behavior and, if small businesses want to sell online, Amazon is the dominant marketplace in the UK. As a result, for small retailers with limited resources, Amazon is the marketplace to start online trading. While the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them.”

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The moral of the story: B2B marketplaces remain the fastest growing B2B digital sales channel and a key driver in how business organizations of all sizes are undergoing digital transformation, according to the newly published 2024 B2B Market and Customer Experience Report.

Consider these metrics about B2B marketplaces

• B2B marketplaces grew year over year nearly 100% in 2023. That’s up to $224.0 billion from $113 billion in 2022.
• B2B marketplaces last year accounted for 1.3% of all B2B sales.
• There are now 750 vertical industry marketplaces (and counting).
• Six in 10 B2B buyers are doing 26% or more of their B2B buying on Amazon Business.
• More than half of B2B buyers, or 59%, are conducting more than a quarter of their purchases on online marketplaces, according to a new survey of 103 B2B buyers.
• Amazon Business is the dominant marketplace, the industry’s most influential marketplace, and by far the biggest, accounting for about one transaction of every four, Digital Commerce 360 projects.
• Marketplace service provider Mirakl says the gross merchandise volume on the Mirakl Marketplace Platform, which client companies use for first-party and third-party ecommerce sales and drop-shipping, grew 50% year over year in 2023 to $8.6 billion.
• The rollout of these new marketplaces will continue in 2024, and the total number of B2B marketplaces could exceed 1,000 in as soon as two years, Digital Commerce 360 projects.

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For example, 94% of companies want to know the place of origin for the products they procure for their organization, and 90% want to know the type of transportation used to ship the products.

“With a clear vision for more responsible purchasing, the question is whether or not organizations are positioned to execute that goal,” the Amazon report says. “Even though six in 10 respondents have mandates for sellers that follow sustainable practices — and many more would like to purchase from these sellers even if not required — 85% of respondents say the difficulty of sourcing suppliers who follow sustainable practices prevents their company from setting or achieving sustainability goals for procurement.”

As B2B companies deal with procurement costs, staffing, and supply chain issues, they focus on digital transformation strategies. More than half of survey respondents said they already use such procurement applications as analytics, automation and electronic invoices, the Amazon Business study found.

At the same time, more than two-thirds of respondents said they face such challenges as retaining and developing procurement staff talent, cutting procurement costs and building resilient supply chains.

“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” says Alexandre Gagnon, vice president of Amazon Business Worldwide.

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With business conditions not the best on the continent and more small businesses in Europe facing challenges, more sellers are turning to ecommerce to for help in finding fixes and solutions, says the Amazon survey of 2,500 small business owners.

The surveyed small business owners are in:

• France
• Germany
• Italy
• Spain
• The United Kingdom

The survey found that 70% of owners of small and medium enterprises (SMEs) in Europe lack confidence in how to scale their businesses online.

Main areas where owners would most benefit from support when scaling their businesses include guidance on how to best utilize a logistics support network (73%) and assistance on value-added tax (VAT) and customs compliance (70%).

For European businesses trying to scale, ecommerce was called out as benefiting business owners. Being online means:

• They are always open (45%)
• Ecommerce provides an ability for them to sell from anywhere, at any time (44%)
• Ecommerce offers access to a wider base of customers (44%)

In fact, small business owners spend an average of 10 hours a week looking into how they can scale up and how to cope with more online sales, according to the Amazon survey.

“Launching or scaling an existing ecommerce business can be a daunting, complex, and time-consuming experience for sellers,” says Amazon Europe vice president of seller services Xavier Flamand.

There are currently 125,000 European sellers on Amazon Business. They’re currently listing more than 1.2 million products, Amazon says.

“65% of sellers say they would benefit from customized support to sell their products online,” Flamand says.

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Just under half (45%) of respondents would be willing to incorporate AI immediately into their procurement operation, while 80% indicate they would do so within two years, according to Amazon Business. With AI-powered technology applications, procurement pros can more quickly identify product sources and manage expedited deliveries, says Aster Angagaw, Amazon Business vice president and head of the public, commercial and strategic sector.

Amazon Business and procurement AI

The technology sector (52%), followed by telecommunications (51%) and medical/pharmaceuticals (49%), is leading the charge to adopt AI immediately or within a year. Health care services are the least likely to do so (38%), followed by government respondents (39%).

Procurement professionals also ranked security and technology (22%) and technological changes/AI (11%) as an overall challenge/risk in the next year. Concerns largely arise around data security and whether the technology is ready for real-world applications.

As procurement teams welcome emerging technologies, there’s a growing need to strike the right balance between improvements and security best practices. However, time is also of the essence. Even a year or two delay can open a window to greater advancements in AI, meaning laggards only fall further behind competitors. Just under half (45%) of respondents would be willing to incorporate and adopt emerging procurement solutions.

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Companies across various industries plan to increase procurement technology spending next year to improve their efficiency and agility in managing procurement across their global supply chains, Amazon Business says in its 2024 State of Procurement Report, released this week.

The report, featuring data and analysis from an international survey of over 3,000 procurement professionals, notes that 98% of respondents said they were planning investments over the next few years in analytics and insights tools, automation, and artificial intelligence.

“Following a year of focusing on reducing costs, procurement leaders are now planning to use the funds they saved to invest in approaches to optimize their procurement processes and allow them to operate more strategically, with the efficiency and complexity of procurement listed as the top challenge they’re currently facing,” Amazon says.

“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” says Alexandre Gagnon, vice president of Amazon Business Worldwide.

Amazon says the report compiled and analyzes insights from 3,108 procurement professionals at organizations involved in government, financial services, hospitality and food service, health care services, manufacturing, medical and pharma, retail, technology, and telecom industries. Survey respondents represented the United States, the U.K., France, Germany, Italy, Spain and Japan.

Aster Angagaw, vice president, head of public, commercial and strategic sector, Amazon Business

Aster Angagaw, Amazon Business vice president and head of the public, commercial and strategic sector, says procurement professionals are zeroing in on several critical areas, including speed in procuring products and agility in dealing with sudden needs to find new products, sources and shipping routes.

She notes that many companies have a procurement processing system set a certain way and following a particular process. When unexpected changes occur, she adds, “your ability to respond quickly and flexibly becomes really challenging.”

But she asserts that with business analytics and other AI-powered technology applications, procurement pros can more quickly identify product sources and manage expedited deliveries.

“This whole idea of smart business buying is being able to use the digital automation, digital transformation, AI and machine learning to create this opportunity for efficiency, flexibility and agility,” Angagaw says.

She adds that AI and other new technology applications can help procurement managers fulfill corporate goals of procuring products from a diverse group of suppliers known for following sustainable, environmentally friendly, and good governance practices.

But the study found that while 81% of respondents said their companies have mandates for purchasing from certified sellers, including, sustainable, local, or minority-owned businesses, 85% said they needed help finding such suppliers.

The study noted the following percentages of respondents using technology applications:

• 62% – Procurement analytics or reporting tools.
• 54% – Automation of manual procurement processes.
• 51% – Digital or online invoices.
• 47% – AI-driven optimization of purchasing decisions.
• 41% – Voice technology.

The study also noted the following percentages of respondents identifying their top areas for investment:

• 36% – Technology or tools to be more efficient.
• 35% – Mitigating procurement risks amid economic or geopolitical challenges.
• 33% – Setting or meeting goals for ESG of buying from certain types of suppliers.
• 30% – Decentralizing purchasing so buyers can purchase more easily for their teams.
• 29% – Integrating more closely with other parts of an organization.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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President and CEO Andy Jassy told investors on Amazon’s Q2 earnings call that the ecommerce giant has been improving its artificial intelligence and machine learning technology. It has also been making its fulfillment network more efficient. Jassy also said Amazon Business, its B2B division, is one of its fastest growing offerings.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV. The latest analysis of the industry as whole is published within the 2023 Global Online Marketplaces Report.

For more detailed coverage, read our Amazon Q2 earnings story.

1. Amazon has been refining its AI

Jassy last week said AI “is going to be at the heart of what we do.” Moreover, he said every business division within Amazon has multiple ongoing generative AI initiatives.

Among those initiatives, Amazon has built CodeWhisperer, an AI-powered coding companion that recommends code snippets directly in the code editor. This is meant to accelerate developer productivity in the coding process.

But Amazon’s work in the AI sphere is still in an early phase, he said.

“Generative AI has captured people’s imagination, but most people are talking about the application layer, specifically what OpenAI has done with ChatGPT,” Jassy said. “It’s important to remember that we’re in the very early days of the adoption and success of generative AI, and that consumer applications is only one layer of the opportunity.”

2. Faster fulfillment in Amazon’s Q2 and beyond

In its fiscal Q2, Amazon reduced the miles its drivers traveled to deliver packages to customers by 19%, Jassy said. It did so through “regionalization,” or its logistics overhaul that shifts its fulfillment network from a national one to a network divided into eight regions that can each operate on their own.

This has led to a 20% reduction in number of touches for each delivered package, Jassy said.

“When shipments come from fulfillment centers that are closer to customers, they travel shorter distances, which cost less in transportation, gets there faster and is better for the environment,” Jassy said.

He said Amazon’s development and expansion of same-day fulfillment facilities has driven this increase in efficiency. He added that the same-day facilities are Amazon’s fastest fulfillment mechanism and one of its least expensive.

The same-day facilities are located in the largest metro areas around the country, Jassy said. Amazon intends to double the number of these facilities, he said.

“While we’re seeing strong early results from this regionalization effort, we still see several ways in which we can be more efficient in this structure and we believe will improve productivity further,” Jassy said. “We’ve also re-evaluated virtually every part of our fulfillment network this past year and see additional structural changes we can make that provide future upside.”

3. Big business, small business

Jassy emphasized Amazon Business’ $35 billion annual run rate for gross sales. It serves more than 6 million customers.

Still, he said, Amazon has only a fraction of the features it needs “to address more of the enterprise at this point.” For example, there are features to make bigger procurement workloads easier for companies.

Merchants that use Amazon’s “Buy with Prime” feature, on average, increased their shopper conversion 25%. That “makes a real difference to their business,” Jassy said.

He added that those who “participate in Prime Day activities, in aggregate, experienced a 10x increase in daily Buy with Prime orders during the sales event period versus the month before we announced Prime Day.”

Although Jassy and other Amazon representatives did not mention its small business sellers on the Q2 earnings call, Amazon did mention them in its earnings release.

It said more than 60% of Amazon sales in its marketplace came from independent sellers, most of them small and medium-sized businesses.

U.S.-based independent sellers sold more than 4.1 billion products and averaged more than $230,000 in sales, Amazon said. It also announced a filter on its marketplace to search for small businesses.

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The survey, which polled 500 small business decision-makers in the United States in March, found that 61% of respondents will look for ways to reduce the costs associated with B2B purchases over the coming year. In addition, 61% of respondents say staying within budget is a priority.

Todd Heimes, director and general manager, Amazon Business Worldwide

“Small and medium-sized business owners say concerns about how inflation and a possible recession will affect their business are keeping them up them at night,” says Todd Heimes, director and general manager, Amazon Business Worldwide.

63% of small business decision-makers polled listed high inflation as the top challenge, while 39% cited a possible recession, and 30% cited supply chain disruptions, the survey found. Respondents could list more than one concern.

88% of respondents said the ability to easily find items is a key factor in growing their businesses long-term, while 91% cited the ability to find items within their price range.

“Even the smallest businesses are looking to find more efficient ways to purchase,” Heimes says.

Procuring products faster to boost growth

In addition, buyers at small businesses are seeking ways to make the purchasing process more efficient, helping them find and purchase what they need faster and more easily to spur their companies’ long-term growth, according to the survey.

The survey asked 500 small-business decision-makers in the U.S. about their online purchasing patterns, the challenges and opportunities impacting purchasing processes, and the broader landscape for small businesses. All respondents were 18 years or older, work in purchasing at a business making $25 million or less in annual revenue. 61% of respondents worked full-time, 7% part-time, and 32% were self-employed.

Amazon Business produced the poll with marketing agency Walker Sands; data collection was conducted via online market research vendor Rep Data between March 20 and 27.

Heimes points to Amazon Business’ use of artificial intelligence and machine learning technology as two ways the marketplace is helping small businesses purchase more efficiently and quickly find products within their price range.

“We are constantly adding greater product selection through Amazon Business Sellers to provide the most relevant selection for small and mid-sized business buyer’s needs,” he says. “We are also increasing the number of products with business-specific pricing and quantity discounts.”

“Subscriptions are another way for small and mid-sized businesses to receive discounts,” Heimes adds.

In addition to providing features through its marketplace that aid small businesses’ operations, Amazon Business is also providing grants to help small businesses grow.

Small-business grants program

This month, Amazon Business is making more than $250,000 in grants available to eligible small businesses that purchase through its marketplace and have less than $1 million in annual revenue.

Amazon Business will select one grand-prize winner and a group of finalists and semifinalists to receive the grants and other perks such as Business Prime memberships and Amazon devices. Applications are due by May 21; winners will be announced July 17.

In 2022, Virtual X Kitchen, a food service business that serves customers exclusively by delivery and pick-up based on phone and online ordering, was a 2022 grant finalist. The College Park, Maryland-based ghost kitchen received $20,000 which it earmarked to create a sustainable restaurant model for urban areas by maximizing kitchen space for multiple owners to share, streamline the ordering process, and raise awareness of its brand.

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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