Amazon launching a new marketplace for U.S businesses

Photograph by John MacDougall — AFP/Getty Images (AMZN) is launching a marketplace on Tuesday that will connect individual businesses with suppliers, giving it access to a fast-growing market worth more than $8.2 trillion in the United States.

Amazon Business will give U.S. businesses from biotechnology companies to oil and gas firms exclusive pricing and discounts for buying in bulk, free two-day shipping for orders over $49, tax exemption and the option to get products delivered with an Amazon guarantee.

A business marketplace will extend Amazon’s role as a middleman for third-party vendors, which account for about 40% of its sales.

It would also help Amazon gain an edge in the fast-growing business-to-business (B2B) online marketplace, which is likely to account for about 12 percent of B2B sales in the United States by 2020, according to estimates by Forrester Research.

Forrester estimates a compound annual growth rate (CAGR) of 7.7% in B2B ecommerce over the next five years.

“Now, business customers have access to products that are only available to businesses as well as business exclusive pricing on a number of products,” Amazon Vice-President Prentis Wilson told Reuters.

He said multiple users would be allowed to use accounts with purchase and approval controls already set in their procurement systems, which is essential for business customers.
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Amazon Business will be rolled out nationwide across categories including office supplies, IT equipment, janitorial supplies, healthcare products, large industrial equipment, education and food service supplies.

Hard-to-find items such as traffic signs, industrial deep fryers, antibodies, 55-gallon steel drums and dent pullers will be some of the products available on the platform.

Last month, the company launched a home services marketplace that connects customers with electricians, plumbers and painters in a move to have its services tied to every product sold on its website.

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