There’s a new high-profile attendee at this year’s EDS conference for component manufacturers, distributors and manufacturers’ reps that has been seen as a potential disruptor for a while. Amazon Business, the b2b unit of e-commerce giant Amazon.com, is attending this year’s EDS as a service provider. Amazon Business sells electronic components through its b2b unit and competes directly with electronic component distributors on a number of levels.
The authorized electronics distribution industry has been facing pressure from unauthorized sales channels for some time. The widespread adoption of e-commerce in the electronics industry has enabled companies outside of authorized sales channels to sell excess components at market prices that are either higher or lower than supplier guidelines. Since many of these companies are not required to follow industry standard quality guidelines, damaged or counterfeit components have entered the supply chain from the open market. To date, Amazon Business has not announced authorized relationships with component manufacturers.
Nevertheless, the ease of buying components through a b2c model has caught on in the electronics industry. Catalog distributors, which specialize in small orders and credit card payment terms, have grown at rates faster than their b2b brethren in recent years. Amazon Business provides the following services—all of which are also provided by electronics distributors:
Tailored Business Experience: Unique search, browse and shopping experience that is tailored specifically to business purchasing.
Business Accounts: Create a single or multi-user business account, invite additional users to join the account, and define groups of users to easily share payment methods and shipping addresses.
Free Two-Day Shipping: Fast, free shipping on orders of $49 or more on tens of millions of eligible items, plus access to even faster shipping options.
Multi-Seller Marketplace: View multiple offers on a single product page for easy price comparisons, as well as shop sellers that consistently meet the performance and service requirements that businesses expect.
Business-Only Pricing: Business-only prices on select items and quantity discounts from select manufacturers and sellers.
Business-Only Selection: Business-only items combined with Amazon’s vast selection provides access to hundreds of millions of products, including hard-to-find items.
Purchasing Approval: Create approval workflows to enable better spending controls.
Purchasing System Integration: Integrate leading third-party procurement solutions for easy access.
Amazon Tax Exemption Program: Make tax-exempt purchases and manage tax exemption permissions across an organization.
Order Tracking: Add purchase order or reference numbers to purchases to assist with reporting and account reconciliation.
Amazon Corporate Credit Line: Place orders and finance purchases using a Pay-in-Full Credit Line or a Revolving Credit Line.
Comprehensive Product Information: Rich product pages and studio-quality photography, as well as dimensions, CAD drawings and manufacturer how-to videos.
Amazon Business Customer Support: World-class Amazon customer service dedicated to registered business shoppers.
Newark element14, one of the oldest catalog distributors in the electronics industry, recently weighed in on Amazon’s impact on the electronics supply chain on EPS:
“While e-tailers boast an unmatched shopping experience, they cannot emulate the level of expertise traditional electronics merchants offer their customers,” wrote Matt Clark, Global Head of eCommerce and Digital Marketing for Newark element14. “To keep pace and even pull ahead, traditional electronics distributors must become disruptors themselves and proactively shape the customer experience. Modern-day distributors are uniquely positioned to learn and grow from competitors like Amazon while maintaining their veteran role in the B2B market.”
Using the successful b2c example of e-tailers, he added, companies should consider the points below to boost customer engagement, elevate the shopping experience, and accentuate what sets them apart:
Targeted Search Features
Robust product portfolios give distributors a leg up against the competition, but this advantage alone is not enough. When most people shop online, they go straight to the “Search Bar.” Providing a straightforward search function that yields relevant results will help customers navigate online catalogs easily and efficiently. Simple search is one of the first impressions of the online shopping space. By doing it well, merchants show their commitment to customer service and providing the best shopping experience possible.
Shoppers should be no more than five (preferably three) clicks away from the product they’re searching for. The longer it takes to find an item, the less likely they are to close the sale and return to your site. This can be achieved by displaying a “quick view” search as the customer types, offering search filters reflective of jargon and popular industry terms, and then providing buyers the option to sort results by brand, price, newness or relevance based on their needs.
Rich Product Content and Engagement
Once they find the item they’re looking for, shoppers expect to learn as much about it as possible. Providing ample and engaging product information has transitioned from being a “nice-to-have” to a necessity. This is one area in particular where B2B buyers are carrying over their B2C preferences. A merchant’s ability to deliver the content customers want increases sales conversions and positively impacts the bottom line.
There are three types of content to consider: base, advanced and user-generated.
Base content is the standard for the electronics industry; this includes a good product title, description, specs, pricing, availability, images and data sheets.
Advanced content like videos, multiple high-res images, 360-degree views, 3D CAD drawings and other interactive, multimedia features builds on the essentials to create a fuller picture.
However, user-generated content is the capstone of product info. From customer and expert product reviews and Q&As to collaborative sites (such as communities and social platforms) where customers can network with each other, this type of content places the control back in the hands of buyers. Together, the right kinds of content create a more tangible e-commerce platform by enabling shoppers to envision products they cannot otherwise see or hold.
Additional Use Cases and Resources
While e-tailers boast their B2C buying experience, they are often unable to match, let alone surpass, the deep-rooted industry knowledge traditional electronics merchants offer their customers. Consider providing additional materials and resources grounded in that knowledge that the “other guys” can’t. Examples include live chats with engineers, typical use cases, potential project ideas, accelerated shipping for emergency situations and in-person visits to troubleshoot issues. By sharing their expertise, distributors give shoppers the biggest bang for their buck.
Flexible Check-Out and Delivery Processes
When it comes to finalizing a sale and shipping product, traditional distributors should consult the e-tailing playbook. B2C companies like Amazon and Alibaba are known for streamlined check-out processes via a wide range of payment methods and flexible shipping options.
By accepting all major credit/ debit cards, PayPal accounts, gift cards and promotion codes, and offering same-day, standard and custom shipping schedules, merchants empower shoppers to buy on their terms and draw them back for subsequent purchases. Collaborating with your payment partners, web developers and mail carriers can help you meet and exceed customer expectations here.
To date, it is unclear how much impact Amazon Business has had on electronics distribution. Sources in the industry suggest that Amazon Business could be a partner, rather than a competitor, to electronics distribution. If so, disruption in the electronics supply chain is just beginning.
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