Amazon Business Launches In UK – Our Exclusive Interview with Steve Frazier

Last week, Amazon announced the launch of Amazon Business in the UK, just four months after Germany went live as the first European venture for the initiative. We wrote a quick overview of the launch here, but last week we met with Steve Frazier, VP Amazon Business International, who is spearheading the international development of the business. Here are the key points from our discussion.

Thanks for sparing the time today – a country launch is obviously a big moment and a busy time for you!  But you go back some way with Amazon and the B2B side of the business, don’t you?

Yes, I’ve been with the firm for 18 years, I’m American but started in Amazon UK actually, and I have been involved in earlier Amazon moves into the business to business space. We’ve been looking at what business needs from us for a long time now, gradually building the appropriate categories, getting better at selecting suppliers and products. We ask – “what do people and businesses need to make their jobs easier”?

Jumping straight into a point we made in our article yesterday, is Amazon Business a threat to procurement departments and professionals?  

Well, we think procurement people are busy folks. They also face maverick spend – which is often their colleagues saying “why can’t I buy somewhere that makes it as easy as Amazon”? We think we can make everyone’s lives easier, do the right thing for the organisation, for procurement and the employee.

What about the issue of control – that might worry some procurement folk? If all my field engineers start ordering books and CDs rather than tools ….

The Amazon Business functionality enables you to put spend controls in for different user groups, so you can set spending limits. You can also set up approval workflows, so users have to get sign-off on purchases. We’re also moving towards having a “preferred” labelling of products so you can direct users towards what you want them to buy.

So I guess the argument is that this is a lot more control than most procurement functions have over current maverick spend!

Yes, and we will provide level three spend data too, so visibility is also a key factor.  The analytics will be an important benefit for procurement.

Amazon Business offers a hundred million products apparently, from lab equipment to stationery, power tools to furniture. Do you have any plans to offer services  - many businesses spend more on services than goods these days of course?  

Our focus really is on physical products – and on making the process easier for customers. We will bring more sellers, more items into the marketplace. Our message is that we’re serious about business, we understand the issues and want to get this right. So we’ve done a lot of thinking and work on delivery, for instance, because that is different to the consumer side of Amazon - speed is key but there are different needs for different customers.

In your press release, you talk about integrating with P2P systems and you mention Coupa, SAP Ariba and Jaggaer. Will that extend to other providers?

Yes, really we’re open to taking to anyone who has a reasonable sized customer base and wants to integrate with us.

I’m sure this is going to be interesting to public sector organisations – but there is a technical question here. If a public body has a rule that you have to get three quotes for a purchase over £100 perhaps, would comparing prices on Amazon Business from three different merchants count as adherence to that policy?

I can’t say of course how that would be considered by each organisation  – but I know some US public organisations have looked at this and they have ruled that three bids via different merchants on Amazon Business is accepted as legitimate competition.

I guess that rule is there both to drive value and to guard against corruption so if you have a choice on Amazon and can show price comparisons then that may well be reasonable.

And the point about visibility comes into play again here – this will all be very transparent for users and procurement or audit.

My other somewhat sensitive public sector related question is this. Might you see some pushback from small suppliers who worry about getting squeezed out by Amazon – and they might also raise some of the comments about your tax situation that we have seen in the UK? I can see letters from small firms to their members of parliament if local councils start using Amazon Business …

We’d hope that small suppliers will sell through Amazon Business and will see their own businesses grow and thrive. Perhaps they will write to their MPs and say how great it’s been! And in terms of tax, the service is fully VAT compliant, so this is good news for VAT compliant suppliers.

A final question – what other developments will we see over the next year or two? And I assume that will include other countries?

We are cautious but yes, we are likely to roll out elsewhere. If you want to get a sense of the future in terms of enhancements and developments, look at Amazon Business in the US – that defines the path we are on, and they are a year or two ahead of the UK currently.

 

So, our thanks to Steve Frazier and his colleagues for the chance to meet, and we will watch developments with interest. And certainly, any procurement leader needs to be considering whether there is a place for Amazon Business in their overall procurement strategy, and just how to use the service most appropriately.

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