Presented by Amazon Business
The last few years have seen a rapid rise in B2B ecommerce adoption across industries. Buyers are shifting purchasing to digital channels to streamline operations and gain access to millions of sellers, while sellers seek new customers and greater efficiency.
While buyers’ and sellers’ digital transformations during the pandemic spurred eprocurement adoption, the rise in digitization preceded COVID-19 — and will outlast it. B2B ecommerce has empowered businesses by boosting efficiency and providing a more diverse supplier base, and it will continue to do so as more and more businesses shift online.
B2B ecommerce boosts efficiency
Today’s purchasing leaders play a critical role in their organizations’ success. They’re being asked to essentially reinvent procurement to free up more time and resources to go directly to support their organizations’ core goals and missions.
The disruptions of 2020 shone a light on the importance of efficient, streamlined procurement processes that can be adapted to meet unexpected challenges. In this context, it’s become clear that digital purchasing offers a level of agility, resiliency, and efficiency that simply isn’t possible with traditional manual processes.
For example, prior to the pandemic, Exxon Mobil consolidated thousands of transactions into a new procure-to-pay system that allowed employees to purchase supplies from a B2B online store. When the pandemic hit and new supply needs surfaced, the fact that Exxon Mobil had already automated routine purchases enabled their teams to get what they needed quickly and maintain operations globally, while keeping costs in check.
Shifting to eprocurement yields efficiency gains for buyers of all sizes, especially when online stores integrate with their internal accounting systems. For large enterprise and government buyers, purchasing through a multi-seller online store that integrates with an enterprise resource planning (ERP) solution enables real-time expense management and can help reduce the overall cost of operations.
Small buyers can see efficiency gains from similar integrations that automatically import and categorize purchases from online stores into bookkeeping software, eliminating the need for tedious manual reconciliation. Once organizations understand the efficiencies possible with eprocurement, few if any return to old offline processes.
Supplier diversification goals spur greater opportunity for sellers
While buyers of all sizes are going digital, the shift has been particularly notable for large enterprise and government buyers, which represent some of the fastest-growing segments in B2B ecommerce today. Digital purchasing is attractive to these large buyers in part because it helps them meet goals around diversifying their supplier bases.
For government buyers in particular, it can be important to purchase from local sellers or sellers that possess certain nationally recognized certifications, such as those for small, woman-owned, minority-owned and LGBT-owned businesses. However, sellers with these qualifications sometimes struggle to connect with large buyers through traditional means. For example, a 2020 study by Censeo Consulting Group found that 93% of small businesses experienced “significant barriers” to reaching government buyers.
Buyers can use a multi-seller online store with in-depth seller profiles to easily find sellers with desired characteristics, whether that’s a diversity certification or location in a local zip code. Reporting tools help buyers track their spending with sellers in different categories. By enabling buyers to manage seller relationships at scale, features like these also help large enterprises and government entities work with a wide array of small businesses more easily.
We’ve already seen these trends accelerate growth for many small, diverse and local sellers. For example, certified Black- and veteran-owned small business Aldevra raised its sales on Amazon Business 315% in part by leveraging its diversity certifications online. Less than five years after joining an online store, the medical and food service equipment supplier is now a contractor for multiple state and local governments and government agencies including the U.S. Department of Defense. The shift to eprocurement benefits both large buyers and small, diverse sellers — and that’s likely to fuel continued growth for a long time.
The digital future of purchasing
At Amazon Business, we’ve witnessed the accelerating growth of B2B ecommerce firsthand. Within a year of our 2015 launch, we reached 1 million customers and $1 billion in sales. Continuing that momentum, today we are serving more than 5 million customers and have reached $25 billion in worldwide annualized sales.
The rise in B2B e-commerce adoption is not just a pandemic trend. Buyers and sellers alike are embracing digitization because it serves their long-term goals for savings, efficiency and supplier diversification. In the future, online stores will continue to innovate and evolve, unlocking new benefits for users — and powering continued growth in 2021 and beyond.
Alexandre Gagnon is VP of Amazon Business Worldwide.
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