Amazon says sales from Amazon Business, its business-to-business platform that launched in 2015, hit an annualized rate of $10B globally
equaling Office Depot. http://www.bloomberg.com/... via @technology @spencersoper @amazonbusiness : We now serve millions of business customers and hundreds of thousands of business sellers. Learn more about how we're growing: http://www.amazonbusinessblog.com/ ... http://twitter.com/... Liberty / @libertyrpf : ‘Amazon Business’ [launched in 2015] passed $10billion in annualized sales. “This year, we expanded our global [B2B] marketplace to France, Italy and Spain. With these additions, Amazon Business is now live in eight countries” $AMZN http://www.amazonbusinessblog.com/ ... Isaac Krasny / @isaackrasny : This includes their hospital supply sales, where they target the “tail spend” where hospitals purchase the odds and ends they can't get from major suppliers http://twitter.com/...
Context & Ripple Effects
Three years in, Amazon Business has gone from a US experiment that did $1B+ in its first year to a platform live in eight countries after this year's additions of France, Italy and Spain. The $10B annualized figure matters because it puts the unit at parity with Office Depot, an incumbent built entirely on business purchasing.
The milestone also caps a busy stretch for the division: February's move into medical supplies for US hospitals signaled that Amazon sees B2B as more than office staples, and the later coverage showing the unit reaching $60B annualized suggests the compounding was just beginning.
First-order effects
- Office Depot now competes against a marketplace that matches its sales scale while carrying none of its physical-store cost base.
- Hundreds of thousands of business sellers gain a second large demand pool beyond Amazon's consumer marketplace, with millions of business customers as buyers.
Second-order effects
- Incumbent office-products and industrial distributors face pressure to build their own online marketplaces or discount into a price war they cannot fund from store economics.
- Medical-supply vendors and hospital group-purchasing channels become the next contested ground, since Amazon has already declared intent there.
Third-order effects
- If the pattern holds — country-by-country rollout plus category expansion — B2B procurement consolidates around marketplace operators, eroding the distribution margins that standalone wholesalers and catalog suppliers were built on.
The trend: Business-to-business purchasing is migrating from distributor-owned catalogs to multi-sided marketplaces, with Amazon Business scaling fastest across countries and categories.