Amazon Business Teardown

By Anais Concepcion

What Data from Amazon Business Tells Us about How to Compete with It

Whether you view them as friend or foe, Amazon Business is on the mind of just about every B2B distributor. Unfortunately, real data on Amazon’s progress is hard to come by. The company says very little publicly and shares even less when it comes to numbers. That’s why in March 2017 Applico launched its Marketplace Tracker to chart Amazon Business’s rapid progress in B2B. This data, which we first shared in a series of white papers we published in 2017 and 2018, has helped give us unique insight into Amazon’s success in B2B. Based on that data and Amazon’s financial reports, we were able to estimate that Amazon Business’s sales would hit $10 billion in 2018. A few months later, Amazon announced that its B2B marketplace had done just that.

In our latest whitepaper, we share new data from our Marketplace Tracker to show exactly how Amazon grew throughout the year and in which categories it has grown most aggressively.

We analyzed real data from Amazon Business captured over a 21 month period and focused on 9 product verticals: industrial, automotive, hardware, lighting, tools, material handling, raw materials, janitorial, and safety. In each category we tracked how the total number of sellers in each category grew over time.

We used that data as a proxy for determining in which verticals Amazon has the largest product catalog and where it was still lagging behind.

This data has never been more valuable. Bank of America analyst Justin Post recently estimated a total addressable market for e-commerce B2B of $1.4 trillion by 2021. He also suggested that given its current growth trajectory and broader industry trends, Amazon will claim 10% of the market that same year – unless incumbent industry leaders fight back.

Applico’s proprietary Amazon Business data revealed some telling trends in the B2B marketplaces’ strengths and weaknesses. Here’s a quick overview of key findings:

• Amazon’s 5 largest product categories are: industrial, automotive, tools, hardware, and lighting.
• Industrial is the largest category with 57,580 sellers, and the second fastest growing with 30.4% growth.
• The fastest growing category is Janitorial which boasts a 39.3% growth. It is the second smallest category with “just” 11,250 sellers.
• Amazon’s 2 smallest categories are raw materials and material handling. But these categories both had a 27% growth in 2018.

But what does this data suggest about what parts of your catalog are under threat from Amazon Business? And, just as importantly, which parts of your catalog are safe (for now)? How can these findings be translated into an actionable strategy that beats Amazon Business at its own game? These answers and plenty more data on Amazon Business’s progress can be found in our latest Amazon Business Teardown report.

The report reveals all this Amazon Business data in greater detail and offers actionable suggestions for B2B distributors by size and vertical. Download your free copy of the report here.

 

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