Arkansas Democrat-Gazette

Amazon Business rolling toward $10B in annual sales

- SPENCER SOPER

Schools, hospitals and government­s have quickly embraced Amazon.com Inc. as a go-to source for supplies, propelling the company’s 3-year-old business platform into a $10 billion annual enterprise. Its success may soon provide as much revenue as the Amazon Web Services cloud-computing division and its digital-advertisin­g services.

The e-commerce giant likely will keep expanding the business service internatio­nally — currently in eight countries — in response to demand from customers, said Prentis Wilson, an Amazon vice president who oversees the division.

“We have a significan­t number of customers that use us in four or five countries,” Wilson said Tuesday, adding there are requests to expand the service to more countries.

Amazon Business is the latest example of the Seattle company tapping into new revenue sources, which has helped it maintain a doubledigi­t growth rate even as annual sales are projected to top $200 billion this year. The program uses Amazon’s existing warehouse and delivery network built for its retail customers. And it follows the retail model of offering one-site shopping for hundreds of millions of goods, with computer keyboards, janitorial supplies, office supplies and breakroom snacks among the top categories.

Sales volume for Amazon Business will exceed $25 billion by 2021, according to analysts at Robert W. Baird & Co. Inc.

The business now operates in the U.S., Germany, U.K., Japan, France, Italy,

Spain and India. Amazon’s consumer retail business operates in those countries plus Australia, Brazil, Mexico and the Netherland­s, highlighti­ng potential places for further expansion.

“It makes a lot of sense for us to leverage existing assets,” Wilson said.

Amazon’s program challenges Staples Inc., Costco Wholesale Corp., WW Grainger Inc. as well as smaller specialty distributo­rs.

Businesses are shifting their supply-shopping online from less efficient methods such as browsing print catalogs, faxing orders and

telephonin­g sales representa­tives. By 2020, 12.1 percent of $9.39 trillion in business-tobusiness spending will be online, according to Forrester Research Inc.

The Internet giant started Amazon Business in the U.S. in 2015 and reached $1 billion in sales a year later. In the U.S., customers include large schools, hospitals, more than half of the Fortune 100 companies and local government­s, Amazon said.

More than half of the products sold through Amazon Business come from hundreds of thousands of independen­t merchants who pay Amazon a commission on each sale, the company said Tuesday in a blog post, also modeled after its retail business.

Newspapers in English

Newspapers from United States