Amazon Business announced it is launching Business Prime Shipping, a paid annual membership program for registered multi-user business customers in the United States and Germany. On the same day as the announcement, Grainger’s share price dropped 5.3%, Fastenal stock lost 3.6% of its value and other broad-line distributors suffered significant value erosion as well (see MDM’s analysis here).
In the U.S., Business Prime Shipping offers unlimited free two-day shipping on eligible items for all users on an Amazon Business account. The company says the service is intended for the Amazon Business customer to ship items to its own locations for its own use, and not to purchase items for the purpose of resale, rental, or to drop ship to customers or other parties. Amazon is offering a free 30-day trial at www.amazon.com/businessprimeshipping.
The annual Business Prime Shipping membership is based on the number of users on the business account: $499 for up to 10 users, $1,299 for up to 100 users, and $10,099 for over 100 users. Once the customer selects the appropriate membership, all users on the account will receive an email notifying them that Business Prime Shipping has been enabled. Any new user added to an existing Amazon Business account with Business Prime Shipping will be automatically enrolled in this membership.
Amazon Business launched in 2015 to replace Amazon Supply, which started in 2012, but built its B2B platform on the acquisition of SmallParts.com, an appliance parts web site, in 2005.
MDM will be publishing a three-part series examining Amazon Business’ actions and their implications for distributors beginning in November.