If Amazon does something, you can be sure that Wal-Mart won’t be far behind. The gap between the two companies service launches has gotten smaller: Amazon launched a third-party marketplace in 1999, Walmart did it ten years later, free two-day shipping and eBooks took Walmart 11 years. Streaming video took only four years with their Vudu acquisition, Walmart’s incubator named Store No. 8 came out two years after Alexa Fund, and cashierless store Sam’s Club Now followed Amazon Go by ten months.
Today, both Walmart and Amazon offer the same general stack of retail and ecommerce services. Of course, Amazon has a stronger media stack, offers AWS, and has a hand in journalism; Walmart has a much stronger presence in the grocery space and in-store experience. But both have a few things in common: A vast network of warehouses, resources, and the ability to get products in customers’ hands faster than ever.
The Amazon-Walmart Battle May Enter the B2B Space
Another thing they have in common? They also have business-to-business distribution plans. Amazon Business launched less than three years ago and became a powerhouse in its own right, expected to claim 10% of the B2B distribution space by 2021—so of course Walmart has looked into jumping on board.
A Section on a Website or a True Push to B2B Distribution?
According to a recent MDM article, the retail giant is looking to turn its 2009 third-party marketplace launch and 2014 Jet.com acquisition into something even bigger than it already is, and has started zoning in on business customers. For example, one can find a section on the company’s website called, “Walmart for Business” featuring a dozen or so categories such as Janitorial & Sanitation Supplies, Breakroom Supplies, Business Furniture, Shipping & Moving, Food Service Equipment and more.
Added to this, Walmart has added a variety of industrial products, and is about to make a big push into B2B distribution according to some manufacturers interviewed by MDM.
Not only are manufacturers finding the experience of working with Walmart more pleasant than working with Amazon (working as a true distributor as opposed to a third-party marketplace), analysts speculate that fees for manufacturers will be less.
Is Walmart the B2B Distributor a Reality?
The real question, of course, is whether or not this is a market test or a massive initiative. As it stands right now, however, Walmart for Business does not offer a competitive value proposition versus Amazon Business or distributors, with MDM author Ian Heller citing the following two reasons:
- First, Walmart for Business is not a separate marketplace; it’s a section on Walmart.com and it’s not promoted very well.
- Second, the only thing you can currently buy as a “Corporate Account” are Walmart gift cards. Open account terms are a fundamental requirement to operate successfully in B2B and Walmart doesn’t offer that – yet.
Furthermore, if the company has a future in distribution, they’ve kept it under wraps, making it all the more dangerous for distributors—if they’re already testing this and working with manufacturers, they may be able to flip a switch and change the market overnight.
Bracing for Change in Distribution: Another Reason to Prepare Yourself
For companies in the distribution industry, the potential for a B2B market featuring both Amazon and Walmart poses a major threat. These companies can carry more SKUs than you, deliver items faster, and present them online in an easily searchable fashion.
This could result in one of two paths forward:
- Beating Amazon and Walmart at their own game by solidifying your supply chain logistics, warehouse automation and vendor relationships to ensure you can meet the rising expectations of your customers; or
- Preparing for diversification and the outcome economy, where value-added services and transformative business models put you at an advantage.
While Walmart’s move may still be speculative, if their NextDay Shipping, Sam’s Club Now, InHome Delivery service, Store No. 8 incubator, eBook platform, and other Amazon clones say anything about the company’s “copy Amazon” strategy, you can almost expect rumors about Walmart Business to be confirmed.
At MIBAR, we have worked with wholesale distribution and other product-centric businesses since our inception and know what it takes to deliver. We offer a wide range of solutions for companies like yours including NetSuite, Acumatica, and Dynamics GP, integrate them with CRM and BI solutions, and customize them for the needs of the wholesale distribution business. Get to know more about our work and contact us for a free consultation.