When Amazon debuted AmazonSupply in 2012, it was clear the company was looking to use B2B sales as a growth lever in its quest to dominate ecommerce. 

So it didn't come as much of a surprise when the company was selling over 2 million stock keeping units (SKU) by 2014. 

Amazon Reaches Critical Mass

The sunsetting of AmazonSupply for Amazon Business in April 2015 further highlighted the company’s quest to become the go-to source for B2B ecommerce. 

With roughly $3.6 billion in 2015 revenues, approximately 20 percent growth from 2014 and a 37th place ranking in online B2B revenue generation (fee charged), it was clear the company was progressing towards its objectives and looked to be on track to surpass $4 billion in revenue in 2016.

So where does this leave the other 98 percent of America’s distributors? 

According to MDM's list of the largest distributors (PDF), only about 25 have higher revenues than Amazon Business’ 2015 revenues of $3.6 billion. When you factor in Amazon’s over $125 billion in revenue, only two distributors, Avnet and Arrow Electronics, have revenues representing 18 percent or more of Amazon’s total.  

Those numbers alone suggest Amazon already possesses a pretty significant advantage when it comes to ecommerce, accounting for 43 percent of all US online sales in 2016, especially when you factor retail’s challenging fourth quarter, 2016 into the equation.

But beyond these numbers, let’s dive deeper to look at how distributors line up against Amazon in several areas including breadth of product offerings, logistics, technology and market reach and mindshare. 

How Distributors Stack Up Against Amazon

Breadth of Product Offerings

According to its website, Amazon Business today carries north of 20 million SKUs. While Googling “how many SKUs does Amazon Business carry” did not corroborate that figure, even if we cut the number in half, it's still over 10 million. 

Few, if any, distributors carry a comparable amount of inventory.  As a one-stop shopping resource for a variety of indirect supplies, Amazon is in an enviable position.


Amazon Business offers free two-day shipping on orders of $49 or more for general customers and also carries over a member's Amazon Prime account benefits, which include free two-day shipping regardless of the amount of the order, next day shipping for as low as $2.99 per item and same day delivery for free in limited cases or $5.99 on most orders, and free two-hour delivery when possible.  

While it appears customers can't yet pick up at an Amazon facility, Amazon’s logistics capabilities are comparable or better than 80 percent of existing distributors and it continues to make improving logistics services a priority.


In addition to having pioneered and become the leading proponent of ecommerce in the past 20 years, Amazon has been extending its platform to support B2B ecommerce for almost five years now. 

That’s a significant advantage and one no distributor will likely be able to reel in. 

Add in Amazon Web Services (AWS), which is currently the leading cloud platform, and it’s hard to see any distributor coming close to competing with Amazon from a technology standpoint. And with the holiday 2016 success of Amazon Echo, it’s easy to assume this will spill over into B2B in some capacity within the next few years.  

Game, set, match: Amazon Business.

Market Reach and Mindshare

With its 20 year lead in ecommerce, Amazon boasted more than 300 million customers worldwide by the end of 2015. That number has likely grown in the year since.

Learning Opportunities

Does any other distributor have anywhere near as large a customer base to influence? Unlikely. 

And in the US, more than 45 percent of households had Amazon Prime memberships by the end of 2015.

The point is consumers have adopted Amazon at an unprecedented rate. And many of those same customers go into work every day wondering why B2B purchasing isn’t as simple as using Amazon.  

Amazon Business has started taking advantage of this mindset shift and will continue to do so in the coming years.  

There still appear to be limits to what Amazon Business can do in B2B now, but it is likely to focus on indirect supplies as a foray into direct materials. While this may not seem to align with its current business, never say never. Remember when Amazon was just selling books and CDs? 

Should the Competition Just Give Up?

Does the rise of Amazon Business in B2B spell the end for distribution?  

Definitely not. 

But Amazon Business will reconfigure the landscape over the next decade the same way Amazon did retail. Amazon Business hasn’t cracked the code on reinventing distribution yet, but it's working on it.  

And let’s assume no meaningful distributor will pull a Target and ask Amazon Business to be its e-commerce platform. That being said, a distributor isn't overly concerned, maybe even paranoid, about Amazon Business encroaching on its business, the best I can offer is it might be time to grow eyes in the back of your head. 

Amazon Business is targeting distribution. It will eventually work out many of the kinks and if other distributors wait any longer to start challenging back, it will be too late. 

Distributors should focus on the value proposition they provide to their customers (convenience, service, etc.) and work to strengthen it. Don’t be afraid to follow Amazon’s lead on customer obsession. Start ramping up your technology efforts and savvy because while you won’t surpass Amazon Business, this will be a key enabler in your digital transformation.  

Finally, be willing to learn and do not stand still because as the adage goes, "we cannot predict the future, but we can invent it.”

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