Amazon Debuts B2B Version of its Popular Prime Membership

Amazon is following up the success of its Prime membership for consumers by launching a new Prime membership aimed at businesses. Investors worry that Amazon will wrest revenues from traditional industrial suppliers, much as it did with retail operations and bookstores among other businesses. For that reason, the news that Amazon now offers Business Prime Shipping had an immediate impact on WW Grainger, whose shares dropped as much as 4.6 percent, and Fastenal, whose stock dipped as much as 4.2 percent.

Bloomberg reports that Amazon’s Business Prime Shipping will first be available in the U.S. and Germany and will offer free two-day delivery. Business Prime members will pay between $499 and $10,099 annually, depending on their size. Amazon’s new business-facing service could also “win business from office supply stores” including Staples and Office Depot.

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Forrester Research analyst Andy Hoar explains that, “business-to-business transactions … have been slower to shift online than retail, but could be a bigger revenue opportunity in the long term.” He believes that the U.S. market in such transactions will skyrocket from $889 billion this year to $1.2 trillion by 2021.

“I don’t see the same ceiling in business-to-business sales as I do in retail,” he said. “In retail, people want to go to the store to see and touch things. For business sales, people don’t want to have to go to the store.”

Fortune reports that, “Business Prime Shipping is available to customers of Amazon’s Business membership service that gives companies access to deals on things like office supplies and to help them keep track of what they buy.”

The $499 membership tier is limited to businesses that sign up 10 of their employees, while those that want to sign up 100 workers will pay $1,299, and those “that want over 100 employees to have access must pay $10,099 annually.”

“Business Prime Shipping combines the wide selection of products available to Amazon Business customers, with the speed and convenience that customers have come to know and love from Amazon Prime,” said Amazon Prime vice president Greg Greeley.

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