Enterprise solutions designed to work at the speed of your organization
The global pandemic and resulting supply chain challenges have impacted every aspect of the business-to-business-to-consumer supply chain. According to the consulting firm McKinsey & Company, 10 years’ worth of e-commerce adoption happened in a span of three months during the pandemic.1 The shift in how consumers shop has in turn forced businesses to rapidly change their strategy to serve their customers through the channels they prefer. On the back end, this shift has meant that companies have had to rethink the way they source the supplies they need to produce goods and services for their customers.
All of this rapid change has resulted in an unprescedented level of digital transformation in enterprise procurement operations. In a survey conducted by Amazon Business in 2021, 50 percent of the companies surveyed indicated that they have fully digitized their procurement process to adapt to supply chain challenges,2 and 85 percent of companies said they have pushed more of their procurement online due to the pandemic. This shift appears to be a permanent trend, as 96 percent of survey respondents anticipated that they will continue increasing online procurement, even after the pandemic ends.
Amazon Business launched a dedicated hub for enterprises to help you navigate the trend towards digital procurement. With the changes in purchasing, we want to highlight our solutions that can help enterprises build procurement foundations for the future. That’s why we’ve designed Amazon Business Solutions for Enterprises— a hub for procurement tools to reshape buying.
Customer happiness is our obsession—it’s at the heart of what we do at Amazon Business. To make sure we recognize your evolving needs and adequately address them, we found from the same Amazon Business survey referenced above that the top-five procurement priorities in 2021 are: 1) improving sustainability, 2) supporting local businesses, 3) increasing supplier diversity, 4) increasing efficiency, and 5) streamlining the purchasing process for stakeholders outside of procurement.
1. Improving sustainability
With increasing evidence of the impact of humans and businesses on climate change, enterprises are becoming more cognizant of sustainability. In a 2019 survey conducted by the consulting firm PricewaterhouseCoopers, 72 percent of the companies referenced Sustainable Development Goals in their annual reports.3 As a company that deeply cares about sustainability, Amazon does its part by taking a science-based approach to measuring and reducing carbon emissions as well as innovating in packaging and our supply chain.
Amazon Business has a buying policy that can drive progress on your sustainability goals by simplifying the process of finding and purchasing products with sustainability certifications. This is an easy way to signal to your buyers that your organization prefers Climate Pledge Friendly products. As an extension of our commitment, we also help enterprises meet sustainability goals through initiatives such as Amazon Day. You can now choose one or two days of the week to receive eligible deliveries from Amazon Business, available with our annual membership program, Business Prime. This option helps consolidate orders on a single day, which makes deliveries more consistent and reduces the number of boxes used.
“Our world and our industry are changing rapidly, and bp aims to be a very different kind of energy company to meet the evolving needs of our customers, and indeed, the world. Our new strategy will kick start a decade of delivery towards our net zero ambition.”
— Justin Burnett, Vice President of Materials Management and Warehousing, bp
2. Supporting local businesses
In many cities and towns in the US, large enterprises tend to foster thriving economies in nearby communities. This pandemic has only reinforced the magnitude of interdependency between businesses and their local communities. Many enterprises—especially in times like these—are leaning into their support for local businesses. To that end, you can create buying policies on Amazon Business that emphasize purchasing from local sellers in your city or state, within your preset price tolerance, which sends a signal to purchasers in your organization that these sellers are recommended. Creating such policies also helps promote items manufactured by local sellers in your search results.
3. Increasing supplier diversity
Businesses are becoming increasingly vocal in their support for diversity and are now reinforcing that intent by supporting small and diverse businesses. Amazon Business’ supplier diversity features connect enterprises with businesses identified as small, diverse, women, veteran or LGBT-owned. Purchasers in your organizations can search for products based on certification type and review seller certifications when making buying decisions. With our reporting tools, your organization can monitor certified supplier diversity spending. With the buying policy feature, you can set up diversity certifications policies to guide purchasers to selected sellers that meet your diversity spending goals. In an effort to support enterprises meeting their diversity goals, we have also introduced dedicated storefronts for products sold by women-owned and Black-owned businesses.
“Cisco’s purpose is to power an inclusive future for all. That means everyone. Partnering with Amazon Business we are able to provide more visibility to diverse-owned businesses, increasing their visibility, and ultimately spend.”
— Denise Lombard, Director of Responsible Procurement, Cisco Systems
4. Increasing efficiency
Controlling excessive rogue and tail spending was the most commonly cited procurement challenge among Amazon Business customers in a recent survey4. However, we have also observed that procurement leaders do not evaluate a purchasing solution solely on controlling spending. They want to understand how to drive more efficiencies throughout the process, by improving access, streamlining purchasing and approvals, all while offering multiple payment and delivery options. Here is how Amazon Business can help optimize your procurement process.
Access: Many enterprises already have e-procurement systems through which they purchase supplies. You can still provide purchasers in your organization with access to a wide selection of items and a personalized shopping experience on Amazon Business through our punchout feature, which also integrates with over one hundred leading procure-to-pay systems. With this integration, you can simplify buying for your purchasers, as they still get to access Amazon Business through a system with which they are familiar. At the same time, you still you get to maintain purchasing control, as the policies that you have set up in your purchasing system apply to Amazon Business purchases. In addition, single sign-on provides purchasers in your organization with a centralized and secure way to access your Amazon Business account. They can use their existing corporate credentials instead of having to create and manage additional passwords.
“We didn’t compromise our approval system, didn’t reinvent the wheel, or drastically change any of our existing systems. Instead, we seamlessly integrated Amazon Business with our purchase-to-pay ecosystem to order what we need in a scalable way.”
— Nassim Kefi, Procurement Advisor, ExxonMobil
Purchasing: Instead of dealing with multiple vendors, Amazon Business customers can take advantage of our wide selection of goods to purchase items from a single source, which can save time and money in both purchasing and reconciliation. This process also eliminates the need for your organization to spend time negotiating with multiple suppliers. We negotiate with vendors on your behalf and provide you with competitive pricing across many suppliers. You can can save money with business-only pricing of up to 10 percent off of 53 million items by purchasing from Amazon Business. We also offer features such as Business Lists, Recurring Deliveries and Quantity Discounts that help you save time and money.
“For a lot of the materials we buy, the most important factors are getting them quickly, and for the best price. We don’t want to handle thousands of suppliers and go through a bid process with each one, negotiating prices—that’s not a commercially viable approach. We’ve moved purchases to Amazon Business to consolidate spending in a dynamic store environment, where everyone can find what they need, and still take advantage of large-scale ordering and bulk buying.”
— Ellen Nielsen, General Manager of Category Management, Chevron
Another key challenge for enterprises is to balance efficiency with purchasing control. Amazon Business helps you do just that by defining different types of buying policies, such as: identifying preferred products or sellers, blocking restricted sellers or categories, and defining spend limits for buyers by using a feature called Buying Policies. You can assign approvers for each of these policies, so whenever a purchaser seeks an exception to the policy, it will require an authorization from the assigned approver. This ensures that only necessary orders are escalated, which frees up administrators’ time to focus on high-value activities, as purchasers still get what they need within the guardrails specified by your organization.
Payments: Efficiency is not only about improvements in the purchasing process but also about managing cash flow. Pay by Invoice enables eligible organizations to buy now and pay later with 30-day interest-free payment terms. Business Prime members can get extended payment terms of up to 45 or 60 days depending on the membership tier. Apart from efficient cash flow management, this feature also enables easier reconciliation with corresponding purchase order (PO) numbers through e-invoicing.
Delivery: Organizations like yours want employees to obtain the essential items they need for work—when, where, and how they need them. With flexible work options likely to be made permanent, your purchasers can customize their delivery preferences by updating the addresses to which they want items shipped and avoid delays by providing the days and times during which they can receive shipments. Your purchasers can also provide customized delivery instructions, such as specific drop-off points for shipments (i.e. loading dock, mail room, front desk), access codes to enter the location, how to find delivery drop-off points, and which entrances to use and what to do if they are not available. With Business Prime, you can also get free same-day delivery on eligible orders, one-day shipping on millions of items, and unlimited two-day shipping on over 100 million items.
“Instead of deliveries spread out throughout hours, days, and weeks, we get them delivered across all of our locations on a dedicated Amazon Day that we selected based on our shipping preferences.”
— Nassim Kefi, Procurement Advisor, ExxonMobil
Analytics: In today’s world, data is king. While information may be paramount, data is useless without analysis. Amazon Business’ purchasing analytics tools help your organization turn data into insights, so you can turn those insights into actions. Amazon Business Analytics helps identify purchasing trends by tracking purchases made by individuals and groups within your organization, which allows you to use this information to further optimize spending. If your organization has Business Prime, you have access to Spend Visibility dashboards, which help identify purchasing patterns in a visually appealing manner to help management use insights to make quick decisions.
“With Amazon Business, we can focus on what the data means rather than on whether it is accurate. We used to review purchasing data every two or three months. Now we can look at it in real time, which makes us much more agile in our decision making.”
— Mark Arrigotti, Head of Global Procure2Pay, Uber
5. Streamline purchasing process for stakeholders outside of procurement
In a survey conducted by Amazon Business in 2019, we found that “make it easy to buy products our organization needs” was the top driver of choice for a purchasing solution from a list of 16 benefits we tested.5 Enterprises seek a purchasing solution that makes it easy to use for their purchasers. Amazon Business does just that by combining the familiar shopping experience of Amazon.com with business-specific features. We translate the best practices we’ve developed in serving consumers through Amazon.com, into a frictionless and customized online experience for our customers.
Enterprise operations need digital transformations in every aspect of their operations, including procurement. We are committed to helping your enterprise in this journey, irrespective of where you are in the digital transformation process.
[1] Periscope by McKinsey. “Retail reimagined: The new era for customer experience.” McKinsey & Company, August 2020.
[2] Walker Sands. “B2B E-commerce in Evolution: Key Trends Driving Change in the Next Era of E-Procurement.” Commissioned by Amazon Business, 2021. (Survey conducted among 250 B2B buyers and 250 B2B sellers in the US.)
[3] PricewaterhouseCoopers. “PWC’s SDG Challenge 2019.” PwC, 2019.
[4] Forrester Consulting. "The Total Economic ImpactTM of Amazon Business and Business Prime." Commissioned by Amazon Business, March 2020.
[5] 2019 Brand Foundations Quantitative Research conducted by Amazon Business: 15-minute online survey among buyer decision makers in the US belonging to the healthcare, commercial, education, and government verticals. Sample = 867. In a trade-off exercise consisting of 16 benefits, the eight benefits listed in this article were relatively more important in evaluating a new purchasing solution. These benefits were defined as being relatively more important because their importance scores exceeded the average importance score of all the attributes. The average importance score was 100. The eight benefits we have described in this article have a score equal to or greater than 100 resulting in them being more important than the other benefits that we tested. Survey question: Which of the following benefits are most and least important to you when evaluating new purchasing solutions for your organization?
“The focus across industries, including our own, is how we can leverage technology to evolve beyond the status quo and deliver a top-notch experience. I’ve seen a lot of procurement innovations in the community management space, and Amazon Business’ platform is unique in that it can deliver on what our users expect, while simultaneously creating efficiency across geographies.”
— Jonathan Kirn, Director of Ancillary Services, Cortland Management
Learn more about how Amazon Business can help you reshape your enterprise procurement process.
