Namely, small businesses. More than 60% of the businesses that sell on Amazon are small and independent, Amazon says in a new report. Collectively, those businesses in 2022 sold more than 4.1 billion products — or an average of 7,800 products every minute — Amazon says.

Sales per small business store on Amazon averaged about $230,000 per store, according to Amazon’s new report, 2022 Small Business Empowerment.

Dharmesh Mehta, vice president, worldwide selling partner services, Amazon.com Inc.

“Selling in Amazon’s store has enabled independent sellers to employ an estimated 1.5 million people in the U.S.,” says Dharmesh Mehta, vice president of Amazon’s worldwide selling partner services. “And during the 2022 holiday season alone, Amazon customers purchased nearly half a billion products from small businesses in the U.S., leveraging Amazon’s significant investments in customer traffic, a trusted shopping experience and fulfillment and logistics capabilities that enable fast and convenient delivery.”

Amazon small business metrics

• In 2022, Amazon and its third-party lending partners lent $2.1 billion to independent sellers.
• The top small business categories include health and personal care, home, beauty, grocery, and apparel,
• The states with the most independent sellers are California, Florida, New York, Texas, and New Jersey.
• The fastest growing are Alaska, Washington, D.C., Mississippi, Maine, and Wyoming.

“While small businesses continue to thrive by selling in Amazon’s store, running a small business has never been straightforward,” Amazon says. “And this past year brought new challenges that businesses of all sizes had to navigate. The economy saw rising interest rates and inflation not seen in nearly 40 years. And many businesses continued to face supply chain issues because of the global pandemic and its aftereffects.”

Amazon.com Inc. is No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North American web merchants by sales. It is No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

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Gregory Kirber, CEO, PartsTech

PartsTech B2B marketplace funding

The influx of working and business development cash from OpenView and PartsTech’s existing investors, including Insight Partners and BP Ventures, will be used for new product and business development, says founder and CEO Greg Kirber.

“This additional investment from OpenView will allow us to scale our team and invest more aggressively in developing solutions that power critical repair operations and keep vehicles and people moving,” Kirber says.

Prior to the latest round of capital, PartsTech had previously raised about $16.5 million, says Crunchbase.com.

Boston-based PartsTech is a B2B marketplace and parts procurement platform. It enables auto repair facilities to find the right parts when needed. PartsTech currently connects about 15,000 auto repair facilities with a network of 30,000 supplier locations, the company says.

The marketplace has been in operation and claims to have $2.4 billion in assets under management.

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For starters, Ritchie Bros. Auctioneers Inc. completed its $7.3 billion acquisition of Westchester, Illinois-based IAA. IAA facilitates the marketing and sale of total-loss, damaged and low-value vehicles.

Ann Fandozzi, CEO, RB Global

“The closing of the IAA acquisition represents the beginning of an exciting new chapter for Ritchie Bros. as we expect the combination of our businesses to drive long-term, profitable growth,” says Ann Fandozzi, CEO of Ritchie Bros. “With IAA, we will accelerate our transformation into a premier digital marketplace and expand into an attractive, adjacent vertical, broadening our global footprint. Our combined yard footprint, marketplace infrastructure and comprehensive suite of innovative solutions will allow us to serve customers more effectively and efficiently than ever before.”

In tandem with the closing of its cash and stock deal for IAA, which auctions damaged and repairable vehicles, theft-recovered vehicles, vehicle parts and donation vehicles, Ritchie Bros also changed its corporate name to RB Global.

“The RB Global name signifies the transformation of our business into a premier global marketplace and more closely aligns with our strategy,” Fandozzi says.

Accelerating growth bey0nd auctions

“Over the last several years, we have worked to create a new growth platform that extends beyond auctions by building out our suite of solutions, enhancing our technology offerings and expanding our real estate footprint,” Fandozzi says. “The IAA acquisition accelerates these efforts, adding significant scale, reach and capabilities. As one company — RB Global — we have a unified vision for success and value creation.”

RB Global also reported higher gross transaction volume, revenue and a net loss for the first quarter ended March 31.

The company reported Q1 gross transaction volume of about $1.90 billion. That’s a 32% increase from $1.44 billion in the prior-year quarter. Revenue increased year over year by 30% to $512.4 million from $393.3 million.

The company reported a net loss of $28.2 million, compared with net income of $178.1 million in the year-earlier quarter. It attributed the net loss partly to acquisition-related and integration costs.

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Randy Altschuler, CEO, Xometry Inc.

For the quarter ended March 31, Xometry posted total revenue of $105.3 million, up 26% from $83.67 million in the same period last year. Revenue for the company’s manufacturing services marketplace grew by 35% to $86.68 million from $64.14 million in the first quarter of 2022, as the number of active buyers grew 46% to 44,716 buyers and the number of suppliers increased 11% to 7,621 sellers.

In addition, the company narrowed its net loss in the first quarter to $18.34 million, compared with $20.12 million in the year-earlier quarter.

“The continuing shift to digital is inevitable, and as the leading two-sided marketplace, Xometry’s asset-light digital marketplace creates efficiencies and value for buyers and suppliers alike,” CEO Randy Altschuler told analysts. “Artificial intelligence is at the heart of Xometry, generating prices for buyers and suppliers across a range of on-demand manufacturing processes.”

Xometry continues to build out its marketplace services and inventory, he said.

“In Q1, we added more than three dozen materials and finishes, including galvanized steel, stainless steel, and custom CNC materials,” Altschuler told analysts. “Additionally, we launched instant quotes for parts with multiple finishes. We also launched a new quick-turn injection molding service for quotes in as fast as two hours and parts in as little as five business days.

“For U.S. buyers, we introduced a new domestic economy shipping option, which offers lower pricing and longer lead times than the standard shipping option, but with higher pricing than our traditional offshore economy option. We are pleased with the adoption of the domestic economy.”

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The survey, which polled 500 small business decision-makers in the United States in March, found that 61% of respondents will look for ways to reduce the costs associated with B2B purchases over the coming year. In addition, 61% of respondents say staying within budget is a priority.

Todd Heimes, director and general manager, Amazon Business Worldwide

“Small and medium-sized business owners say concerns about how inflation and a possible recession will affect their business are keeping them up them at night,” says Todd Heimes, director and general manager, Amazon Business Worldwide.

63% of small business decision-makers polled listed high inflation as the top challenge, while 39% cited a possible recession, and 30% cited supply chain disruptions, the survey found. Respondents could list more than one concern.

88% of respondents said the ability to easily find items is a key factor in growing their businesses long-term, while 91% cited the ability to find items within their price range.

“Even the smallest businesses are looking to find more efficient ways to purchase,” Heimes says.

Procuring products faster to boost growth

In addition, buyers at small businesses are seeking ways to make the purchasing process more efficient, helping them find and purchase what they need faster and more easily to spur their companies’ long-term growth, according to the survey.

The survey asked 500 small-business decision-makers in the U.S. about their online purchasing patterns, the challenges and opportunities impacting purchasing processes, and the broader landscape for small businesses. All respondents were 18 years or older, work in purchasing at a business making $25 million or less in annual revenue. 61% of respondents worked full-time, 7% part-time, and 32% were self-employed.

Amazon Business produced the poll with marketing agency Walker Sands; data collection was conducted via online market research vendor Rep Data between March 20 and 27.

Heimes points to Amazon Business’ use of artificial intelligence and machine learning technology as two ways the marketplace is helping small businesses purchase more efficiently and quickly find products within their price range.

“We are constantly adding greater product selection through Amazon Business Sellers to provide the most relevant selection for small and mid-sized business buyer’s needs,” he says. “We are also increasing the number of products with business-specific pricing and quantity discounts.”

“Subscriptions are another way for small and mid-sized businesses to receive discounts,” Heimes adds.

In addition to providing features through its marketplace that aid small businesses’ operations, Amazon Business is also providing grants to help small businesses grow.

Small-business grants program

This month, Amazon Business is making more than $250,000 in grants available to eligible small businesses that purchase through its marketplace and have less than $1 million in annual revenue.

Amazon Business will select one grand-prize winner and a group of finalists and semifinalists to receive the grants and other perks such as Business Prime memberships and Amazon devices. Applications are due by May 21; winners will be announced July 17.

In 2022, Virtual X Kitchen, a food service business that serves customers exclusively by delivery and pick-up based on phone and online ordering, was a 2022 grant finalist. The College Park, Maryland-based ghost kitchen received $20,000 which it earmarked to create a sustainable restaurant model for urban areas by maximizing kitchen space for multiple owners to share, streamline the ordering process, and raise awareness of its brand.

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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Alexandre Gagnon, vice president, Amazon Business

From 2020 to 2022, Amazon Business grew at a compound annual rate of 25%, according to Alexandre Gagnon, vice president of Amazon Business Worldwide.

To expand on that growth, Gagnon says the marketplace plans to enlarge sales of office supplies. The product category grew in recent years as the pandemic led companies to more purchasing online.

Gagnon, the top executive at Amazon Business, made his comments in an interview published today by the Reuters news service and confirmed by an Amazon Business spokeswoman.

Enhancing logistics to support B2B sales

Gagnon said Amazon Business is improving logistics operations in Europe to make it more attractive for corporate-account customers to make bulk purchases of supplies ranging from desks and IT equipment to paper and printer ink. That provides Amazon the opportunity to reap higher margins compared with small-order retail consumer sales.

“Because businesses buy in larger quantities, the fulfillment economics are more advantageous,” Gagnon told Reuters.

Amazon Business entered the European market when it opened for business in Germany in 2016, followed by Great Britain in 2017. It also operates in France, Italy and Spain. The ecommerce company deals with such corporate clients as:

• Electrical equipment manufacturer ABB
• Renewable energy technology company Siemens Gamesa
• Energy technology engineering firm Centrica Business Solutions

When asked if Amazon Business intends to enter additional markets in Europe, the spokeswoman said the company “can’t comment on future plans.”

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B2B ecommerce buyers use a variety of resources

A new McKinsey survey of 3,800 B2B executives in 13 countries, including the U.S., finds that 70% of decision makers are prepared to spend up to $500,000 on a single ecommerce transaction.

“At the highest end of the spectrum, however, we see meaningful movement,” according to the report. “The number of decision-makers willing to spend as much as $10 million or more has increased by 83%. This trend holds true particularly in China, India, and the United States, and in global energy and materials (GEM); telecommunications, media, and technology (TMT); and advanced industries sectors.”

B2B buyers use as many as 10 channels to interact with suppliers, McKinsey says. But one channel getting a lot more use these days is B2B marketplaces.

B2B companies winning the most market share are simultaneously employing five major modern sales and marketing tactics, McKinsey says.

The five tactics

• Deploying advanced sales technology
• Increasing hybrid sales teams and capabilities
• Delivering hyper personalization
• Tailoring strategies on third-party marketplaces
• Achieving ecommerce excellence across the full marketing and sales funnel

“They’re developing a sophisticated digital customer experience — especially by leveraging social media, mobile devices, and texting early in the buying process. They’re increasingly facilitating a greater share of their sales efforts through third parties and owned marketplaces,” McKinsey says.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. We add new content regularly. 

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In 2021, when Amazon Business announced it had reached $25 billion in annualized gross sales the prior year, that 2020 gross sales figure had been projected three years earlier by Colin Sebastian, managing director and ecommerce analyst at investment firm R.W. Baird & Co.

Andy Jassy, CEO, Amazon.com Inc.

Amazon.com Inc. CEO Andy Jassy, in his 2022 letter to shareholders posted on Amazon’s website today, says that Amazon Business “drives roughly $35 billion in annualized gross sales,” including third-party sellers’ as well as Amazon’s own sales transactions on the dominant B2B marketplace.

“We believe that we’ve only scratched the surface of what’s possible to date, and plan to keep building the features our business customers tell us they need and want,” Jassy says in the letter, which Amazon posted on it website today.

Wall Street analysts agree that Amazon Business has only scratched the surface. Sebastian, for one, has projected that Amazon Business will reach $80 billion in gross sales by 2025. Other Wall Street analysts have also come out with lofty projections.

Jassy says Amazon Business has thrived even during tough economic times because it has listened to and learned from customers, resulting in innovations in the customer experience as they purchase among “hundreds of millions of business supplies” on the B2B marketplace.

Amazon Business rolls out new buying features

The initial B2B services Amazon Business offered when it launched in 2015 included features that let account holders maintain multi-user accounts, share payment methods, and access and review analytics data on what a company’s buyers were purchasing.

Since then, Amazon Business has expanded services to include free shipping for Business Prime members, which can extend to thousands of buyers from the same company, and the Guided Buying program, which lets companies establish spending rules for its employees.

The Guided Buying program also supports the ability of companies to direct more of their purchasing to sellers on Amazon Business who meet their diversity and sustainability requirements, including minority- and women-owned businesses and sustainable products shown to be environmentally friendly.

In addition, Amazon Business says it has increased its sales and account services with large enterprise and expanded the application of artificial intelligence and machine learning to better match customer demand with available products from suppliers.

AWS, or the Amazon Web Services cloud technology unit, “is now an $85 billion annual revenue run-rate business with strong profitability,” Jassy says in the shareholders letter.

Colin Sebastian, managing director and ecommerce analyst at R.W. Baird & Co., will speak on B2B ecommerce investment trends in a “Follow the Money” presentation at the EnvisionB2B 2023 Conference & Exhibition in June in Chicago.

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Dave Haase, president, ChemDirect

As president of chemicals marketplace ChemDirect, Dave Haase is driving online growth in an industry still new to B2B ecommerce. He says that having kicked off online marketplace sales transactions in 2019, ChemDirect is on course to triple gross merchandise volume to about $40 million by the end of 2023 over 2022.

Haase will discuss the strategy behind ChemDirect’s growth a speaker on the June 21 “Keys to Success on B2B Marketplaces” panel at the  EnvisionB2B 2023 Conference & Exhibition in Chicago.

DC 360: What is driving B2B companies like ChemDirect to expand online?

Haase: Trends indicate that buyers are looking online more over time — as they get younger and companies like ChemDirect work to make online purchases easier. Additionally, within the chemical industry, supply chain disruption and inflation are driving more price changes and disparities than we’ve seen historically. That increases the need to look around, which ChemDirect helps aid.

DC 360: What are your biggest internal and external barriers?

Haase: Internally, working to structure data to ensure we deliver relevant search results all the way back to an initial search on Google or Bing. Externally, sharing prices is the largest barrier. We have a real price on every product — but many chemical suppliers are distributors and are still hesitant to list prices. But to buy online, you have to know what something costs.

DC 360: What are the chief gains you’re realizing?

Haase: We’re adding new customers at an increasing rate as our supply base grows. These new buyers have increased our network by 30% in just the past 90 days. That’s an important start to building network effects — the buyer base to provide incentives for suppliers to list and ensure they have competitive pricing.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them? 

Haase: I’d say customer focus is the most important piece of building these businesses. Ensuring that you are providing a great product experience and the selection and price they need to come back.

DC 360: Regarding COVID-19 and supply chain disruption, what is the biggest adaptation your company has made?

Haase: We’ve worked hard to ensure our products are on shore, and available. This is critical as supply chains have been stressed and inconsistent. Additionally, having landed costs is critical as variables like ocean freight move around quickly.

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Haase: I wish we moved faster! I’m sure everyone says that. So, I’ll give another answer as well — we should have worked earlier in the process to ensure our prices were competitive. This isn’t a simple thing, but something we could have started earlier. We’re now working to use artificial intelligence to check prices against competitors and model variance based on size and grade. But I wish we had started a year earlier!

DC 360: What excites you the most in new digital commerce technology?

Haase: Using AI to scale our intelligence. Specifically, improving search relevance, creating pricing models, supplementing product data, and creating unique content for each of our 450,000 products. We’re going to make huge strides in those areas this year.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities?

Haase: I believe the most important challenges and opportunities in commerce are going to be in verticals that have yet to evolve. But those verticals — like chemicals — will have unique challenges such as lack of price transparency in our industry. It’s hard to generalize because these verticals will be different, but I think the overall theme will be doing more with less. Reducing time to value for suppliers and buyers and streamlining payments and financing in unique ways. In short, making it so much better to buy online that buyers and suppliers overcome their objections.

Jim Daly is a DC360 contributing editor covering digital business technology and strategy.

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Ann Fandozzi, CEO, Ritchie Bros. Auctioneers

In addition to record gross transaction volume on their online B2B marketplace, Ritchie Bros Auctioneers Inc. also made a key acquisition. For the year ended Dec. 31, gross transaction value (GTV) for its online auction and “buy-now” marketplace sites grew to $6.025 billion. That’s up 9% from $5.533 billion in 2021. In comparison, total revenue, which includes inventory sales and services, increased 22% to $1.7 billion. Net income for the year increased 110% to $319.8 million.

“We delivered record financial results and made significant progress in continuing to build our marketplace technology and advancing our growth initiative, despite operating in a challenging environment of continued tight supply, inflationary headwinds, aggressive competition, and foreign exchange volatility,” says CEO Ann Fandozzi.

Ritchie Bros. Auctioneers is also rethinking how it will expand it its B2B marketplace and digital footprint, Fandozzi says.

“We are transforming Ritchie Brothers from a traditional auction business to a trusted global marketplace for insight services and transaction solutions. And we continued our journey by taking several important steps in 2022,” she says. “Ritchie Brothers 2.0, our marketplace technology platform, is in the process of piloting an all new digital check-out experience with self-serve invoices and settlements.”

Acquiring IAA to accelerate growth

Vancouver, Canada-based Ritchie Bros. said in November that it would acquire Westchester, Illinois-based IAA, which facilitates the marketing and sale of total-loss, damaged and low-value vehicles, in a $7.3 billion cash-and-stock deal.

“We identified IAA as a potential combination for Ritchie Brothers back in 2020, and together with our board of directors have evaluated a possible acquisition of IAA for more than a year,” Fandozzi says. “The strategic logic of this combination is clear. With IAA, we believe we can accelerate growth for Ritchie Brothers, drive margin expansion and expand our reach into an attractive adjacent vertical.”

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