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Amazon juggernaut sets its sights on its next victim: The middleman

Before it was Amazon killing the retailers. Last week it was Amazon disrupting appliances. Now there's a broader concern: Amazon has the potential to disrupt the middleman in general, particularly those that work in the $7 trillion business-to-business (B2B) space.

Here's the issue: If you don't make the object you are selling, or don't have some sort of intellectual property, or solve a pain point for a customer, then you're just a middleman, and you are increasingly more vulnerable. The concern is that these middlemen will start losing volume because sales in general are going to the internet and because it's increasingly difficult to get pricing.

In 2005, Amazon bought a business called SmallParts.com. No one paid much attention to it, not even after 2012 when Amazon renamed it Amazon Supply with the idea of supplying industrial and commercial customers.

That started to change in 2015, when it was rebranded Amazon Business. The much larger goal: to be a supplier to the entire B2B community, a business that encompasses much more than just the industrial space.

Amazon Business now has 300,000 registered corporate buyers, according to Crain's, and recently surpassed $1 billion in sales, according to Reuters.

How serious is this as an issue? It's already affecting a specific class of middlemen: Industrial...


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