Amazon Business to expand in Europe
Ecommerce giant Amazon is planning to expand its b2b division, Amazon Business, in Europe. It is unclear which countries it will target. The company is currently investing in its logistics, to supply European businesses with office supplies in bulk.
The online marketplace has been dealing with rising operational costs due to inflation. As a result of that, it has raised its fulfilment costs in Europe this month. It is also planning to close all of its 68 brick-and-mortar book stores, pop up shops and ‘4-start’ stores in the United States and the United Kingdom.
Gross sales grew 25% annually
However, Amazon Business was able to grow its gross sales in Europe at a compound annual rate of 25 percent from 2020 to 2022. The business is currently active in several European countries: Germany, Britain, Italy, Spain and France. Now, it wants to expand further.
Orders in bulk
“The division is spending on logistics in order to accommodate the larger orders typically associated with company purchases, like desks, chairs and printers”, said Amazon Business VP Alexandre Gagnon. It wants to win contracts with businesses to provide them with office supplies in bulk.
‘Fulfilment economics are more advantageous for Amazon Business.’
Amazon Business is able to keep higher margins than its consumer business, because making a smaller amount of bulk deliveries is cheaper per unit. “Because businesses buy in larger quantities, the fulfilment economics are more advantageous.”