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Defend Yourself Against Amazon’s Next Potential Move: Buying Up B2B Distributors

Unilog’s CEO, Suchit Bachalli, predicts Amazon will continue to dig its heels in the B2B marketplace by acquiring a major wholesale distributor like Grainger or Fastenal in the near future. In his two-part article series recently published in Supply House Times, Bachalli says the online giant could pose a huge threat to industrial suppliers if they add a national brick-and-mortar presence to their business arsenal.

His prediction comes after Amazon’s surprising move to buy Whole Foods in August 2017. The grocery store acquisition gives Amazon the ability to test new technology and business models within the consumer retail marketplace, completely changing the in-store shopping experience as we know it. Their foray into the grocery business has already sparked big losses for grocery chains around the country. The purchase of a major distributor like Grainger, Bachalli maintains, could be the next logical move for the online powerhouse, given the sheer size of the B2B market and its estimated $7 trillion value.

Bachalli is not trying to scare distributors; rather, he’s warning them of this imminent threat so they can prepare and plan for what’s to come. There are clear differentiators between Amazon and distributors, and it’s those differences businesses must preserve and defend.

While Amazon is clearly the king when it comes to big data, analytics, and technology, wholesale distributors offer great customer service and relationships, a deep knowledge of their product line, and an exceptional understanding of the industries they serve. Unlike an Amazon customer, a B2B buyer can pick up the phone and ask a distributor a question about a product, request more information in the way of catalogs, brochures, and manuals, or seek a custom solution for their business application. This is where the distributor currently hails over Amazon: B2B customer service and sales people act as consultants, problem-solvers, and resident product experts in an industry where complex configurations and solutions are a daily necessity.

The tides could change, however, if Amazon acquires a business with an experienced salesforce to augment their lacking customer service. This, Bachalli says, is why distributors should develop both short-term and long-term strategies to defend their business, retain their customers, and remain competitive.

According to Bachalli, you can begin incorporating the following business strategies right now:

  • Develop great content – Since Amazon lacks in the content department, make sure your product content is comprehensive and features rich descriptions, detailed specifications, supplemental guides and manuals, as well as impactful visuals like product images, videos and CAD drawings. The more information you offer, the easier it will be for buyers to make a purchasing decision.
  • Utilize a product information management tool (PIM) – This foundational eCommerce tool allows you to manage large product catalogs and immense amounts of data, and then use that data to create a personalized omnichannel experience for buyers.
  • Embed product information using Bluetooth beacon technology or a micro-QR code – These emerging tech tools are transforming the way people buy products. Intuitive and responsive, they eliminate the need to search for products using a traditional web search with your browser.
  • Team up with a voice recognition service for verbal online ordering – With voice assistant services like Alexa, Google Home, and Cortana gaining popularity, the B2B marketplace is now making their products available for optional verbal ordering.
  • Offer on-demand rush delivery service – Amazon now provides upgraded shipping service for business customers, so distributors should consider adding “premium” delivery options as well.

As you look to the future, consider investing in these long-term defense strategies to sustain your business:

  • Learn everything you can about big data – Big data is one of Amazon’s big strengths, so understand what it is and how it, too, can work to your advantage.
  • Collect (and use) more data – If you have a website, you have data, so start collecting and analyzing it. Analytics tools can help you make sense of it all in order to benefit your business.
  • Invest in automation and technology – Remove the friction slowing down your processes and people by using better technology and automation to drive efficiencies and boost sales.

Don’t wait for Bachalli’s predictions to come true before taking action. Realize the threats, leverage your advantages, determine a course of action you can take now, and create a strategic plan for the future. For more of Bachalli’s insights on Amazon’s disruption of the industrial market, and his steps to aid in your defense, be sure to read both his articles – part one and part two – in their entirety.

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