The simplicity of Amazon makes it appealing to businesses. It’s familiar and easy to use. Finding what you want is simple and ordering is reduced to a click of a button. Moreover, the endless choice means that you are never short of suppliers for your goods. That also means that prices are competitive – supply far outstrips demand for most product categories.
To that end, most businesses assume that using Amazon to buy their goods is a sound option. But it’s not that straightforward. Because Amazon is a marketplace, there are several aspects that mean businesses aren’t buying as well as they could while also putting their business at risk.
So where do the dangers lie?
Too much choice
Because of the variety of choice, your organisation is exposed to all kinds of risk. In the first instance, if users are allowed to buy at will on Amazon, there is no consistency in the quality of products, price or delivery. There’s also no consistency in item brand or selection. This type of buying leads to significant overspend on everyday items. It also leads to high rogue spend – spend that goes on items that aren’t needed.
In addition, the lack of traditional procurement controls on Amazon harms the business. The best way for companies to buy is through contracted spend with reputable suppliers. This type of agreement saves money through volume discounts and economies of scale. It also allows you to set delivery terms and forecast stock levels – reducing your exposure to supply chain disruptions. You cannot achieve that with Amazon.
It is hard to verify the quality of suppliers on Amazon, which exposes your business to unnecessary risk. Without having a good relationship with them (or any relationship at all), it is harder for you to guarantee delivery times or redress quality issues. Similarly, Amazon doesn’t provide dedicated account management and support – so you could be left hanging if your orders aren’t what you expected.
What about Amazon Business?
Amazon Business sought to eradicate the problems its consumer platform created for businesses. In some respects it has achieved that. The invoicing is better suited to businesses and there is clarity over whether or not you are paying VAT. You can also ask for your items to be delivered next day through Prime Business, but only through select vendors.
Despite those perks, buying through Amazon Business still isn’t optimal. You aren’t able to verify the quality of suppliers (sellers from the consumer platform can also set up on Amazon Business) nor are you able to optimise pricing or costs. To that end, the fundamental issues of buying on Amazon apply to Amazon Business.
A better option
At I-Tel, we provide an Amazon-like user experience with the essential procurement controls you find on traditional procurement systems. It means you can buy with ease, safe in the knowledge that you’re getting the best price from trusted and reputable suppliers. And because we’re able to use your spend data to identify where you’re losing money, we’re able to offset the cost of our service with cash savings in the first month). And that’s just the tip of the iceberg – we’ll make you more efficient, reduce your risk and continue to save you money by:
- Benchmarking against your current pricing to form a contract list that guarantees savings.
- Identifying bulk buying opportunities for your regular purchased items, leveraging economies of scale for big savings.
- Set up a dedicated warehousing space for you, to ensures availability, brand/item consistency. You’ll also benefit from the convenience of reduced and consolidated deliveries, boosting savings further and reducing you environmental impact.
To find out how you can start, drop us a line on 029 2049 211