The 2020 Mid-Year Economic Update_long

Is the Sun Setting on AmazonSupply?

Amazon expected to fold AmazonSupply into its main platform as part of 'significant change' at retail giant.

Amazon's skyrocketing growth has mostly been on the consumer side with little improvement in the B2B space, according to Chris Hodson, an analyst with Cleveland Research Co., who delivered the keynote address at United Stationers' Emerge Core Live event for suppliers and customers last month in Nashville, TN.

"We've heard the B2B traction has been pretty limited," Hodson said, adding that this is happening because Amazon is still "not thought of as a B2B company," and it has no field sales reps and very little marketing.

Hodson said Amazon is undergoing "significant change" in its approach as it moves away from lower margin categories, like consumer electronics and media, and shifts its focus toward selling goods via the third-party community, where it sees much higher margins.

"For the first time we're seeing a little more profitability focus," Hodson said.

More importantly for distributors, Hodson said, the sun is setting on AmazonSupply as it's currently structured, and that the company will "be closing to the AmazonSupply portal and folding it under Amazon," Hodson said. "The dirty little secret on AmazonSupply in the U.S. is they weren't selling anything. That's out."

Hodson said in the next few years Amazon will refine its existing B2B platform into Amazon for Business, which the company calls a "one-stop destination for hundreds of millions of products," where you can "purchase all the supplies you need to run your business, including office, IT, MRO, tools, industrial, scientific, food & beverage, and more!"

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