The Power of Amazon Business: Redefining global procurement
Amazon Business: The Whats, Whys and Hows of global business procurement
Many are familiar with Amazon as a store for on-the-go purchasing, as today’s shoppers place a high value on convenience, selection, and value. Indeed, numerous public and commercial sector organisations have employees who use their personal Amazon accounts for work purchases and later seek reimbursement.
But this can lead to a host of inefficiencies: employees must spend time submitting and following up on requested reimbursements while approvers must investigate purchases and reconcile them with existing policies. Meanwhile, much of this spend goes uncaptured, unmanaged, and unanalysed.
Businesses and organisations – from sole proprietorships to large enterprises, governments, schools, and healthcare organisations – have different needs than individual buyers. That’s why Amazon created Amazon Business. With built-for-business tools and features, a wide selection of industry-relevant products, and the convenience and value of Amazon, organisations of any size can simplify buying to drive toward their next stage of growth.
While there are many similarities between Amazon and Amazon Business – including the familiar, user-friendly shopping experience, mobile app, and reliable shipping – a key differentiator is the ability to establish a single Amazon Business account for multiple users, set user permissions, and consolidate purchasing activities for all users in one centralised location for a given country or region.
Once this consolidated account is set up, organisations can grant their buyers access to an extensive selection of hundreds of millions of industry-relevant products, many offering business-only prices.
I sat down with Amazon Business executives, Andy Krzmarzick, Leader, Deals & Growth Pursuit, and Ken Brennan, Head of Category Adoption, to discuss the system that is changing the way that business is done, and having a significant impact for procurement on a global scale.
“With Amazon Business, organisations that fulfil the necessary criteria can set up features like pay by invoice and integrate with over 100 existing procurement and finance systems. Adding Business Prime, they can enable features like Guided Buying to prefer, restrict or block certain products for buyers; access fast, free shipping speeds on eligible items; and review insightful charts and graphs that provide valuable information on spending trends, including the top buyers, top items purchased, most purchased categories, and more,” says Krzmarzick.
This previously uncaptured data allows organisations to gain deep insight into their organisation’s spending, all while maintaining the speed, convenience, and agility employees need to stay agile and focused on the organisation's goals.
Amazon Business beginnings: Taming tail spend
Amazon Business launched in 2015 to help organisations better serve their bulk and spot purchasing needs. However, it soon became clear that Amazon Business was well suited to tackle a problem that had previously seemed insoluble: taming the long tail of indirect spend.
“The hallmarks of spend in the long tail are that it is decentralised, difficult to quantify, lacks visibility for procurement leaders, and is replete with countless suppliers who all vary in terms of the customer experience and levels of customer service they provide,” says Brennan.
Amazon Business solved these problems through assembling the world’s largest assortment of business products in a single store, for the first time ever.
This massive supplier consolidation and spend centralisation continues to drive greater visibility to a wider swath of spend than previously thought possible, effectively leading to more consistent customer experience and service levels.
“But to go a step further,” says Brennan, “Amazon Business layers in different business selection, business-specific discounts, dedicated and personal account management, and fast, free delivery on eligible orders for Business Prime members; combined with an analytics suite that, for the first time, allows customers to self-serve their procurement data and visualise it in a highly customisable way.”
These benefits are unique in the industry and are part of how Amazon Business helps customers practise smarter business buying.
And today, they are still innovating.
Now, Amazon Business users are businesses, non-profits, schools and governmental entities of all sizes who are shifting their managed category spend to Amazon Business, in addition to managed category indirect spend like Office Products, IT Peripherals, and Facilities supplies.
Lessons from the fallout: How Amazon Business remains a reliable supplier despite global supply chain disruptions
During recent and ongoing global supply chain disruptions, Amazon Business has served as a key partner for many businesses, not just because of their expansive selection, but because of the depth of inventory that sits behind that selection.
“The not-so-secret reason we have been better able to serve customers than traditional suppliers through supply chain uncertainty,” says Brennan, “is that behind our massive assortment are millions of selling partners who maintain their own healthy inventory that customers on Amazon Business can leverage to fill gaps that arise when other suppliers falter, due to lacking well-diversified sources of supply.
“Beyond our place in assuring supply chain security, procurement leaders are the driving factor behind ensuring organisations weather these disruptions deftly.”
From pushing the boundaries of cost savings to sourcing scarce supplies, businesses must have a procurement strategy to achieve purchasing agility.
More than ever, procurement leaders are focused on digitising procurement processes through the use of new technologies, allowing them to pivot more effectively across their supplier base when disruptions occur. This ensures their buyers are more efficient, their supplier set is more diversified, and accelerates the speed of procure-to-pay.
Amazon Business brings hundreds of thousands of suppliers and hundreds of millions of products to a single solution, giving businesses the ability to implement an agile digital procurement strategy overnight that strengthens their supply chain.
Brennan says, “Ultimately this results in procurement leaders better serving their customers – who are the employees within their organisations – by allowing employees to find, procure and receive what they need more efficiently.
“Whether they are working at home, in the office, or on an offshore oil production platform, Amazon Business has the ability to help employees get what they need, wherever they are, while ensuring procurement teams aren’t left without a solution to help their customers.”
Resilience: From Pandemic to progress
In 2020, Krzmarzick served as the single-threaded leader for Amazon Business' public sector Covid response, overseeing the facilitation of massive orders for essential items like infrared thermometers, hand sanitiser, gloves, and other high-demand products that were in short supply.
The experience revealed significant vulnerabilities in the global supply chain, and underscored the importance of supply chain resilience. The result was a new level of continuous monitoring and adaptation to mitigate the impact of global disruptions on Amazon Business and its customers.
From sourcing in Asia to shipping across the ocean, supply chains involve multiple ships, processing, ports, trucking, warehousing, and numerous critical links to reach the end user. Disruptions in production or a breakdown in any of these links can have a precarious impact on buyers and suppliers, and Amazon Business was not immune to these challenges.
Drawing from this experience, Amazon Business has learned valuable lessons, and has taken critical steps to strengthen its infrastructure.
Investments have been made to improve delivery – particularly bulk shipments – and closer monitoring of inventory positions helps to ensure they are better able to meet demand at scale.
Additionally, Krzmarzick emphasises that before joining Amazon, he didn't fully appreciate the extent of supplies and selection available in the Amazon Business store, which acts as a mitigating factor against supply chain risks. More than 50% of all sales on Amazon Business come from third-party selling partners. This vast network of over 1.9 million sellers provides businesses with a higher level of assurance, allowing them to find the products they need at competitive prices, even during times of unanticipated disruption.
Agility: Amazon Business as the exemplar
According to Krzmarzick, agility thrives when teams have the tools they need to make rapid, scalable decisions that help meet their goals.
Krzmarzick says, “Users can swiftly make purchases and have them shipped directly to the required location and throughout this process, they have a wide array of purchase choices available to them. For example, Amazon Business can facilitate buying from small and diverse businesses, fostering inclusivity.
“We also offer a feature called the Request for Quote (RFQ), which empowers buyers to request better prices when purchasing items in larger quantities. This initiates a bidding process among sellers on Amazon Business, resulting in improved offers automatically sent back to the buyers.”
At scale, this tool has the potential to transform the solicitation process for companies and governmental entities by essentially staging the RFQ process on Amazon Business.
This technological advancement significantly streamlines and accelerates the procurement process, reducing the time and effort traditionally required for staging solicitations.
Krzmarzick noted the significant time investment in the government sector, particularly as a former proposal writer. “With technology-enabled solutions on Amazon Business, the hundreds, if not thousands of hours spent across multiple individuals to stage solicitations can be greatly minimised.”
For Brennan, agility in procurement means empowering those closest to a problem to make in-the-moment decisions, while maintaining internal compliance and spend management best practices that have been part of procurement strategy for decades. “But the past few years have really pressure tested the standard methods of implementing agile procurement and found them in need of rethinking,” he reflected.
Amazon Business helps simplify the procure-to-pay process for buyers while maintaining the control and service level adherence procurement leaders need to ensure the business meets their objectives.
Brennan says: “Businesses that want to further augment their capabilities have the option to choose Guided Buying through Business Prime. Business Prime has the tools needed to create procurement policy that presents within the native user experience to ensure that buyers get what they need within the compliance guardrails that procurement and business leaders have defined.”
Amazon Business has taken a hybrid approach to helping organisations practise agility: in addition to continuously evolving their own site-level technologies, they have also focused on integrating with their customer’s own eProcurement and Financial software to create a blended experience that better meets organisational objectives.
“This ultimately results in de-risking the supply chain while providing greater visibility to more areas of spend than ever before,” says Brennan, “which both ensures purchasing happens within defined guardrails, while also not being so overly restrictive to the point where agile strategies end up not meeting buyer’s needs effectively, which can lead to rogue spend behaviours.”
How to start with ‘Smart Business Buying’
Krzmarzick says that in simple terms, 'Smart Business Buying' allows buyers to streamline purchasing while saving on everyday supplies so they can focus on growing their business.
“In Amazon Business, they can easily locate and purchase lower-priced or better-value items from a vast selection offered by millions of sellers. Furthermore, as these purchases are made over time, the store learns from buyer behaviour and leverages machine learning capabilities to present even better offers. This improvement is not only for the individual buyer but also based on the purchasing activity of hundreds or even thousands of buyers across the entire organisation.”
Brennan adds that Amazon Business’ mission has always been to reshape buying for their customers and help them shake off the more aged modes of procurement philosophy so that they may venture into the future of procure to pay.
“And we usually start that by capturing more of the tail spend occurring across a business, which is historically decentralised and ad hoc in nature. But it doesn't end there,” he says. “The shared goal we have with our customers is finding ways to optimise their supplier base and leap entire categories of indirect spend forward into a more modern procure-to-pay environment that leverages technology.”
The result is creating a newfound intelligence within procure to pay that goes down to the user level, which helps organisations apply uniform procurement policy to a wider swath of their spend in a more automated way, while consistently removing cost year over year.
“So smart business buying has a number of meanings when it comes to the vast number of things that Amazon Business can do,” says Brennan.
In short, Amazon Business is changing the world of procurement.
They simplify the purchasing process to make it easier for their customers to get necessary products.
They solve their customers’ unmet and undiscovered needs — continuously expanding their selection and adding relevant new tools and features.
“We’re right for any organisation at any stage — starting, growing, transforming,” says Brennan. “And it’s our instinct to invent — we purposefully question what others don’t, creating unexpectedly better ways of getting things done.”
When asked if there is anything to add, Brennan answers: “Yes. Reach out to your Amazon Business representatives to learn more about how we can help you execute smarter business buying.”
To learn more about how Amazon Business, visit AmazonBusiness.com