Recently, I listened to a report from a forum on Amazon's business purchasing, where I heard a new concept called B&C integration. The general idea is that as the economy declines, more and more small wholesalers will choose to make small purchases on C-end platforms. At the time, I didn't think much of it, believing it was just Amazon boasting about its business purchasing.
It wasn't until a casual chat with a B-end manager revealed that the advertising return on investment for the B-end is very poor, and unlike the C-end, where advertising can yield immediate results, I suddenly connected the dots on what I had been doing and realized I could upgrade my independent site to version 2.0.
Table of Contents#
01 / My Thoughts
02 / Amazon Business Purchase Commission Discounts
03 / Operational Model
04 / Implementation Plan
01 / My Thoughts#
After the second half of 2023, Amazon's traffic became increasingly expensive, forcing me to seek alternatives. After much consideration, I concluded that the only way to offset advertising costs was to improve the repurchase rate. However, a new problem arose: Amazon's commissions are high, and shipping fees are charged per item. So, is there a way to save on such a significant portion?
Most sellers do not operate independent sites due to high traffic acquisition costs (mainly due to a lack of trust), resulting in low conversion rates for their ads, and they may not have a good supply chain. Therefore, before proceeding with today's practice, I need to determine whether I can engage in B-end business.
In recent years, I have met many friends in the B-end sector and learned a bit about it. Just as they envy me for being able to secure fixed orders daily on Amazon without having to negotiate with customers, I also envy them for easily starting with orders over a hundred thousand, without inventory risk or high storage costs. Instead of envying each other, can we combine our respective advantages?
Returning to the main topic, since we know that the B-end's return on investment is uncontrollable and the trust cost is higher than that of the C-end, can we create a C-end brand with B-end attributes starting from the C-end platform? Isn't this what Amazon previously mentioned about B&C integration? By leveraging the controllable and quick-return characteristics of the retail industry's return on investment, we can expand brand influence while lowering the wholesale threshold (offering small wholesale discounts) to reduce customer trust costs and increase repurchase and premium rates.
02 / Amazon Business Purchase Commission Discounts#
Amazon's business purchase strategy has been upgraded, bringing some commission discount benefits, which include quantity discounts and large order discounts. Details here
Quantity Discounts#
For single-item sales, the sales commission is 15%. As the quantity sold increases, the sales commission will decrease to 12.8%, 12%, and 11.3% respectively;
- 1 item: 15%
- 2-9 items: 12.8%
- 10-23 items: 12%
- 24 items and above: 11.3%
Business Order Discounts#
For business orders completed through the inquiry quotation tool, for amounts over $10,000, the sales commission enjoys a "tiered reduction": 7% for $1-50,000, 6% for $50-100,000, and 5% for amounts over $100,000. The commission fees for the inquiry quotation tool are valid in the U.S. and five European countries (UK/France/Germany/Italy/Spain). View official documentation
03 / Operational Model#
Based on the above thoughts, I am preparing to upgrade my independent site to version 2.0.
In version 1.0, I only thought about using Amazon to drive traffic to the independent site. Due to trust costs, the independent site was mainly used for after-sales support and to barely complete some small orders. However, after some time of practice, the traffic to the independent site did not grow significantly, and if I ran ads, the conversion rate was insufficient. Until Amazon launched the Brand Traffic Reward Program and Business Purchase Commission Discount Program, which could address the low conversion rate issue of our independent site.
In version 2.0, the independent site no longer needs to worry about whether driving traffic from Amazon is unprofitable. By using Amazon's internal advertising and social media ads like Facebook, we can accelerate brand growth and allow customers to choose their ordering channels freely, as the Amazon Brand Traffic Reward Program can also reduce commissions for purchases made on Amazon. Then, I can set up business buyer discounts for each ASIN in the Amazon backend. Additionally, I will leave links and methods for wholesale discounts on the website, thus creating a brand website that meets the needs of small B customers for purchasing or acting as agents, as well as retail customers.
04 / Implementation Plan#
- Own a brand domain name;
- Build an independent site; I mostly recommend using Shopify, but if you want more freedom, I suggest using WordPress. More detailed introductions and building methods for these two options can be found in Independent Site Matters;
- Print the brand website on the packaging;
- Set up relevant sections on the website (Brand Story, Bulk Ordering (purchase of five or more to enjoy wholesale, affiliate programs, shipping policies, warranty policies, return and refund policies, privacy policies, terms of service));
- Apply for a Facebook ad account and start advertising.
Finally, I wish everyone success in both B and C, and great wealth.