What’s Missing in Amazon’s B2B Strategy

Written by Mike Marks on Monday, 13 March 2017. Posted in Business Strategy, Distribution

IRCG Amazon blog puzzle piece 250x167A lot of distributors are worried about Amazon’s growing influence in B2B markets. Despite Amazon’s replacement of AmazonSupply with the somewhat less-threatening Amazon Business in 2015, the increased competition in B2B markets created by Amazon Business still outweighs the new selling opportunities it has created.

Still, though, not all products distributors sell are a match for Amazon’s self-service buying model; some products are too complex and require too much in the way of channel services. Amazon has done a great job of making it easier for people to buy products, but they haven’t really made it easier for people to buy services. This is good news for distributors, because many of the products and services distributors sell go hand-in-hand.

Amazon’s underlying philosophy to date has ignored services almost entirely. But it’s not clear that things will stay that way.

Recently, I went to Amazon’s website to order some switches for my home to allow me to control my lights and AC from my iPhone. On the product page, I could see a little button saying that for about $80, I could get someone to come out to my house to install the switches. It was great for me to be able to add that service to my purchase a la carte. It was great for the automation specialist, too, who said the program has helped him find so many new clients that it has eliminated the need for him to advertise elsewhere.

That said, Amazon still lacks a full understanding and respect for the value of channel services in terms of what people are actually buying. But a change in this philosophy could represent a critical tipping point for their success in B2B markets and for the distributors that serve them. 

About the Author

Mike Marks

Mike Marks

Mike Marks co-founded IRCG in April 1987. He began his consulting practice after working in distribution management for more than 20 years. Over the years, his narrow focus in B2B channel-driven markets has created an extensive number of deep executive relationships within virtually every business vertical in construction, industrial, OEM, agricultural, and healthcare.

Mike has led project teams that improve market access by aligning resources to growth opportunities serving manufacturers, dealers, and distributors. Clients have ranged from small privately owned firms to many of the industry’s market share leaders. Ownership structures have included owner-operators, private equity, ESOPs, and publically traded firms. Mike is proud of the teams work and the confidence clients have shown with additional project work.

He has written extensively, and is frequently quoted on many industry issues. He has substantial board experience on both public and private distribution firms. His contributions to the field include serving multiple terms as a Research Fellow with the National Association of Wholesaler-Distributors, permanent faculty at Purdue University’s University of Industrial Distribution, eight years as Graduate Adjunct Faculty in the Industrial Distribution Program at Texas A & M University, and rendering several precedent-setting expert opinions in contract disputes between manufacturers and distributors.

Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, an $800 million vertically integrated electronics distributor in Stamford, CT. Mike’s path to management in his early career was through increasing responsibilities in sales and sales management. He also completed a tour of duty as a manufacturer’s representative.

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