Amazon.com has launched Business Prime with the new service set to be launched in Australia next year according to insiders.
The membership service for businesses service could hurt the likes of Officeworks, Staples along with building and electrical suppliers to trades.
Amazon said that they are looking to replicate in the workplace the quick delivery of online orders that made it a go-to shopping destination for households.
Shares of US industrial suppliers WW Grainger and Fastenal, which both sell industrial and construction supplies, fell on the news.
Investors are concerned the world’s biggest online retailer will use low prices and convenience to win the suppliers’ business in the same manner it took market share from book stores, electronics stores, department stores and big-box retailers.
Currently Business Prime Shipping, available in the U.S. and Germany, offers free two-day delivery to companies paying $499 to as much as $10,099 a year depending on their size, Amazon said.
Bloomberg said that business-to-business transactions is a broad category that includes pens and paper for the office as well as equipment and parts used in factories as well as suppliers for construction trades — have been slower to shift online than retail, but could be a bigger revenue opportunity in the long term, said Andy Hoar, an analyst at Forrester Research.
He estimates the U.S. market will reach $1.2 trillion by 2021, up from $889 billion this year.
“I don’t see the same ceiling in business-to-business sales as I do in retail,” Hoar 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.”
