B2B Payments

Amazon’s B2B Unit Growing Faster Than Retail

Amazon released new statistics about the growth of its B2B eCommerce unit, Amazon Business, on Tuesday (Sept. 11), touting the success of the operation four years after its launch.

A blog post from Amazon said “millions” of companies and “hundreds of thousands” of B2B sellers are using Amazon Business to conduct business, contributing to the unit’s goal of hitting $10 billion in sales — a figure the company expects to reach this year.

It took Amazon Business only one year to reach $1 billion in sales, it said.

According to Tuesday reports from CNBC, reaching that milestone just four years after Amazon Business’ launch means the unit is growing faster than its cloud business or customer retail operations. Some analysts told reporters that Amazon Business could eventually surpass its retail operations in size.

“We believe Amazon B2B over the very long-term has the potential to surpass the size of the core B2C segment, and remains an under-appreciated opportunity by many investors,” Robert W. Baird analyst Colin Sebastian said in a note.

Reports said it took Amazon’s consumer retail unit seven years to reach $10 billion in sales. Amazon Web Services, its B2B cloud service unit, took 10 years to reach that milestone.

In its blog post, Amazon pointed to several other milestones reached by Amazon Business this year, including expansion into France, Italy and Spain, with eight countries now a part of Amazon Business operations.

Other stats released by the company showed that more than half of the $10 billion in global sales stems from third-party sellers using Amazon Business to expand their customer reach.

While Amazon Business’ growth trajectory is impressive for some analysts, the company recently became the focus of controversy among some B2B suppliers using the service after Amazon introduced its invoicing feature that allows corporate buyers to pay suppliers on a longer time scale.

The launch of “Pay By Invoice” this year led suppliers and analysts alike to question how the tool would affect vendors’ cash flows.

“This policy could put sellers in a cash bind,” said 3P Marketplace Solutions CEO Jerry Kavesh in an interview with CNBC last month. “They may not be able to pay suppliers and employees, which is problematic at best, and [at] worst could put them out of business.”

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