Amazon Supply – a significant moment in corporate procurement history?

- April 26, 2012 9:31 AM
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Earlier this week, Amazon announced the launch of Amazon Supply,

“a new website dedicated to offering a broad selection of parts and supplies to business, industrial, scientific and commercial customers at competitive prices.”

So one of the most successful and powerful companies in the world is moving from the B2C market into the B2B – hence my question in the title. It’s easy to forget how smart Amazon is – but think about their capability in “technical” areas such as catalogue management, supplier on-boarding, payment processes…  let alone the marketing, logistics and supply chain management skills that underpin the whole thing. A scary competitor for anyone…

Amazon Supply “offers more than 500,000 items from leading brands” across a range of categories, including: lab & scientific, test, measure & inspect, occupational health & safety, janitorial & sanitation, office, fleet & vehicle maintenance, power & hand tools, cutting tools, abrasives & finishing, materials handling, materials (e.g., metals), hydraulics pneumatics & plumbing, fasteners and power transmission.

While it does offer delivery to Europe, products are shipped from the US, so in most cases and for most products, it is not going to be particularly interesting for customers this side of the Atlantic, by the time we’ve looked at shipping costs and lead times.

But it is likely to have a more significant impact in the US, and my colleagues at Spend Matters have written some excellent analysis into what it might mean for other providers of catalogue based MRO items, and potentially to eProcurement and network providers (Ariba, Coupa, SAP etc.)

Lisa Reisman at Metal Miner says that “Amazon Supply will be very disruptive, particularly for distributors in the MRO world” but the implications might be even broader in the longer term.  Might Amazon see this as the start of offering a wider eProcurement and supplier network capability? And what about supply chain financing perhaps – they’re offering a credit line to buyers already.

As Spend Matters US says,

From the Spend Matters P2P vantage point, Amazon Supply could very well be a worst MRO-focused eProcurement nightmare scenario for vendors like Ariba, SAP, Oracle, Rearden, and Coupa should Amazon chose to add what amounts to basic buying controls, workflow, compliance and analytics capability that are commonly featured in eProcurement technologies. tweet

So, more significant in the US for now, at least until Amazon Supply opens distribution centres in Europe, but a development well worth watching whether you’re a potential customer or a potential competitor. And here are the Spend Matters US posts if you want to read more.

Initial coverage and commentary

A first take on competitive implications

More detailed views on competitive aspects

Comments

  • Plan Bee:

    whey hey, when it comes to the UK the end of Procurement as a function careers – and even less revenue for the UK tax coffers

  • Falling out of love with Amazon — Spend Matters UK/Europe:

    […] we mentioned Amazon’s move into B2B supply recently, which is very much US focused at the moment. If and when they bring it to the UK, they better get […]

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