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After less than four years, Amazon's business supplies site is on pace to pass $10 billion a year

Eugene Kim
  • Amazon disclosed in a blog post Tuesday that its business marketplace is on pace to reach $10 billion in sales this year, just three years after reaching $1 billion.
  • That's faster than the growth of its consumer retail or cloud business units.
  • Some analysts believe Amazon Business could become bigger than the consumer marketplace.

Amazon AMZN Business, the company's marketplace that sells business supplies to corporate buyers, is on pace to generate more than $10 billion in sales volume this year, a significant milestone for a service that officially launched just three years ago.

Amazon revealed the new sales projection in a blog post Tuesday , highlighting the fact that "millions of business customers," including 55 of the Fortune 100 companies, purchase products through its business marketplace.

Amazon Business, which sells everything from office supplies to lab equipment, launched in 2015, replacing a service called Amazon Supply that had been around since 2012. A year later, Amazon disclosed that the business marketplace passed $1 billion in sales.

Business-to-business sales presents another massive growth opportunity for Amazon, which makes most of its money through its consumer retail and cloud computing services. The company booked $177 billion in total revenue in 2017, and nearly $53 billion in the second quarter of 2018.

The new sales figure also suggests Amazon Business is on a faster growth trajectory than any of the company's other business units. For example, it took seven years for Amazon's consumer marketplace to go from $1 billion to $10 billion in sales, while AWS surpassed the $10 billion sales milestone only in 2016 — 10 years after its launch.

"We believe Amazon B2B over the very long-term has the potential to surpass the size of the core B2C segment, and remains an under-appreciated opportunity by many investors," Colin Sebastian, an analyst at R.W. Baird, wrote in a note Tuesday.

Amazon also said that "hundreds of thousands" of business sellers are on the business marketplace, with third party merchants accounting for more than half of the $10 billion in sales. But not all sellers are happy with the aggressive expansion, as Amazon has forced them to accept longer payment cycles recently .

Correction: Amazon Business is on track to pass $10 billion in annualized sales, not revenue.




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