Amazon: business-to-business platform “on pace” for $10 billion annually
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Amazon: business-to-business platform “on pace” for $10 billion annually

Three years ago, ecommerce giant Amazon launched its business-to-business platform. This canny move saw the potential for taking the convenience and economies of scale that have made online retail such a disruptive force, and applying them to a wider market: schools, hospitals, offices, factories, and more. This week, the company says its bright idea is raking it in, as sales from the business-to-business segment hit an annualised rate of $10 billion globally.

Amazon’s share price has appreciated by 69% so far this year

graph 1309 amazon

SOURCE: Yahoo Finance

Amazon Business was not a slow grower. A year after its launch in 2015, it had already managed to hit $1 billion in sales. Back then, it was a U.S. only enterprise, but today it’s active in eight countries, including big-hitters like Germany, Japan and India.

However, the U.S. is still the market in which its success is easiest to gauge. In that region, Amazon counts “nearly 80% of the largest enrollment education organisations,” more than half of the Fortune 100 companies, more than half of the 100 biggest hospital systems, and more than 40% of the “most populous” local governments as customers.

Amazon Business is a massive marketplace, which offers hundreds of thousands of sellers access to millions of business customers. These third-party sellers make up over 50% of global sales. So far, the business model seems to be working!

In a blog post celebrating its latest milestone, the company wrote: “Year after year, our biggest learnings come directly from customer and seller feedback. Looking ahead, we remain focused on innovation on their behalf, to deliver features they need to be successful. It is still day one for us, and we’re excited about what’s to come.”

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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