
Amazon's Wholesale Slaughter: Jeff Bezos' $8 Trillion B2B Bet - grej
http://www.forbes.com/sites/clareoconnor/2014/05/07/amazons-wholesale-slaughter-jeff-bezos-8-trillion-b2b-bet/
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dotBen
For anyone wondering, this is basically how PR works at its absolute best.

This piece has been published because Alibaba is about to IPO and Amazon wants
to take a little bit of wind out of the sails by puffing (as its called in the
trade) its own otherwise obscure competitor.

Note how the journalist writes how AmazonSupply has never been mentioned
before outside of the 2012 General Meeting - the hook to make you think this
is some inside track he/she has just discovered - and then out come the canned
quotes from an array of AmazonSupply VPs because, actually, this isn't some
scoop s/he discovered, its been spoon fed to her/him.

This was designed and crafted by Amazons PR firm, probably pitched to a
freelance journalist who in turn pitched it to some outlets and Forbes bit.
The date of publishing would have been agreed way in advance and Amazon PR may
even have had rights to review/edit the piece.

Its a manipulation of media in some ways given the piece has only been crated
for the sole interest of Amazon (there's no objective analysis or mention of
competitors) and the rest of us are pawns reading it.

~~~
josefresco
I enjoyed your story and generally believe Bezos and Amazon to be very shrewd
marketers and PR manipulators BUT ... do you have any evidence to back up your
claims?

~~~
hagbardgroup
That's the beauty of manipulating the press. All the evidence is private. Your
skepticism is what makes it such an effective method of molding public
opinion.

~~~
lifeofanalysis
Thanks for putting it so well. It is mental jujutsu. You leverage your
opponent's strength against herself.

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pravda
Just for fun, I decided to look up the price of Acetal rod on amazon supply.

Acetal Copolymer Round Rod, Opaque Black, 1/4" Diameter, 36" Length $7.86

Price at Enco : $2.29 for a standard 4' length.

Amazon: $2.62 per foot!

Enco: $0.57 per foot.

Grainger doesn't have it in black, but for white: 1/4" 6 Ft - $2.94 $0.49 per
foot (Note that white is generally cheaper then black.)

I have hopes for Amazon Supply eventually adjusting their prices to 'sane'
levels. But right now, they got some wacky pricing.

Edit: Checked McMaster Carr pricing.

White: $0.53 per foot

Black: $0.56 per foot

~~~
freehunter
Yeah I mentioned it to a friend who was doing fabrication work a few years ago
when Amazon had just turned their acquisition of Small Parts into Amazon
Supply. The prices were outrageous. For comparable parts, the pricing was on
par with Home Depot, far from what you would expect a wholesaler to provide,
let alone someone trying to cash in on the market of companies like Grainger.

So no, if they've had these prices for the past two years, I don't see it
changing much going forward. If it does get lower, they're playing the market
all wrong.

~~~
Turing_Machine
The prices at Small Parts were very high long before Amazon acquired them.

Small Parts didn't really compete in the mass production supply chain. They
were aimed at prototypers (the guy who needs 1 or 2 of something, not 1 or 2
million). Even taking that into account they were pretty spendy.

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phunge
The sexiness of AmazonSupply disappears once you start searching for products.
Industrial parametric part search is incredibly hard to get right, and
McMaster-Carr is the clear leader in online. The article didn't even mention
them. AmazonSupply/SmallParts is pretty cut-rate by comparison, both in
selection and ease of search.

~~~
paul_f
The Amazon site is simply horrible compared to somebody who actually knows
what they're doing: Mcmaster-Carr
[http://www.mcmaster.com/](http://www.mcmaster.com/)

I get why Amazon owns consumer online retail. But I just don't see how that
success can translate to success in industrial products. Different DNA.

~~~
adventured
I had never been to McMaster-Carr's site. That's an amazing construction. I
have absolutely nothing to do with 99.9% of what they sell, but I found it
incredibly easy to navigate and understand. They properly focused all their
effort on navigation and finding, rather than aesthetics.

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gallerytungsten
A brief trip to the AmazonSupply site reveals that it's definitely not ready
for prime time. After doing an initial search, a somewhat random selection of
products in the category were displayed. But whenever I clicked through to the
detail page, I got an error that the page did not exist.

Also, there was one really hilarious whopper in the story that deserves some
attention:

"If there’s one company standing in Amazon’s way, it’s Chicago-based
industrial supplies giant W.W. Grainger. With $9.4 billion in revenues it’s
definitely the business to beat, controlling an estimated 6% of the entire B2B
market. With a robust e-commerce operation."

While Grainger is a serious competitor, their actual competitive advantage is
that they have numerous local outlets that you can actually visit. If the
local store doesn't have something, they'll send it to your local store at no
charge.

With that said, Grainger's site isn't particularly great, although visiting it
just now, it seems they may have improved the usability a bit. I'd hardly
characterize it as a "robust e-commerce operation."

The real competitor, at least on the web, is McMaster-Carr. Their product
selection is vast; their prices are usually better than Grainger; their
delivery is incredibly speedy, with orders typically arriving the next day,
even with standard shipping. On top of that, their site is amazingly good for
drilling down and finding exactly what you need.

~~~
sgc
If you use these much, mscdirect.com is strong competition for mcmaster-carr,
because they often have better prices and their shipping is very fast--
although the site can only be used in internet explorer at times. These are
all US-centric, because there are great sites in Europe that operate in the
same space and will also be competition for Amazon.

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rayiner
Interesting quote:

> While U.S. retailers took in more than $4 trillion in revenues according to
> the most recent U.S. Census, wholesalers brought in $7.2 trillion selling
> everything from Bunsen burners to toner cartridges. Even better for Amazon:
> Of America’s 35,000 distributors, almost all are regional, family-run
> companies pulling in annual revenues of $50 million or less, and only 160
> have more than $1 billion in sales annually.

Very interesting in the context of this article from yesterday, about U.S.
businesses being shut down faster than they are created:
[https://news.ycombinator.com/item?id=7703721](https://news.ycombinator.com/item?id=7703721).

How many people will be made obsolete by Amazon's movements into this sector,
how many middle-American cities will see money flow away, etc? Not criticizing
Amazon, of course, seems like a market that's ripe for disruption. Just food
for thought.

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rdl
I wonder if it would make sense for Amazon to buy Grainger, Graybar, or
Cardinal Health, now that Amazon has sales tax issues in every state (well,
and wholesale b2b wouldn't be an issue, but if it were directly Amazon it
would have caused the consumer business to pay taxes.)

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ars
If you want to beat Amazon at this, then do really well at something Amazon is
bad at: Search and categorization.

If you need some specific part with specific specs, it's virtually impossible
to get a list of candidates that meet those specs. Instead you need to know
the manufacturers, check them, then search for each model number separately.

------
dkyc
Finally! I've been envying Chinese Alibaba user's for a while now... Good to
see some movement in that space!

~~~
Kudos
It's been around since 2012 and it's not as good as Alibaba.

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comlonq
Interestingly, Grainger are using an off the shelf ecommerce platform called
hybris. I imagine they made (or got someone to make) many modifications to its
extended functionality though.

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gokulk
When I click on any of the product pages they are all 404's. Is this a dummy
site?

