NEW YORK (TheStreet) -- Amazon (AMZN - Get Report) today launched Amazon Business, a marketplace directed specifically towards business customers, signalling a larger push into the massive business to business (B2B) market. By the end of 2015, the U.S. B2B market is expected to surpass $8 trillion, and the e-commerce segment alone will represent 9.3% of that, according to Forrester Research. By 2020, the B2B market is expected to surpass $9 trillion, with the e-commerce B2B market topping $1.1 trillion.
It should therefore come as no surprise that Amazon is strengthening its efforts to grab a larger piece of those numbers. According to Amazon, millions of business customers bought billions of dollars worth of products on Amazon in the past year, so they already have a base of customers from which to grow.
"We think Amazon Business is an experience that businesses will love and a great opportunity for manufacturers and sellers to reach registered business customers," Amazon spokesperson Stacey Keller said in an email. "It's only the beginning for this new marketplace -- we will continue to build out features in areas like technical support, payments, shipping and pricing."
Originally, Amazon sold business and industrial products as a standard category on its site, no different than apparel or electronics. However, in 2012, Amazon shifted this category into a standalone site, known as Amazon Supply. The site added new functionality, allowing businesses to buy in bulk at lower prices, create invoices, etc., but it excluded third-party sellers and offered a limited selection of products. Now in version 3.0, Amazon Business will combine the best of both worlds, integrating its unique business interface and pricing while also keeping the site tied to Amazon's wealth of third-party sellers.
"You'll see an explosion of product selection," said ChannelAdvisor CEO Scot Wingo, who helps third-party sellers set up shop on Amazon and was pre-briefed on the Amazon Business launch. "[With Amazon Supply] our customers were frustrated because they never had access to that marketplace, it was only Amazon's products."
While Amazon Supply offered at most 2.2 million products, according to Business Insider, Amazon Business will offer more than 250 million products.
In addition, businesses will be able to integrate purchasing platforms like Ariba, enable multiple users to log into one account, and create workflows, such as allowing all employees to purchase whatever they'd like under $100 but requiring authorization for orders over $100.
Another bonus for business customers is that Amazon Business will provide free two-day shipping for orders above $49, even if the business does not purchase Amazon Prime.
The move certainly sets Amazon in a head-to-head battle with some traditional business-to-business players like Staples (SPLS, but it ought to worry some of the local distributors in the game even more, Wingo said.
"There's all this old-school business and industrial distributors out there like Grainger and Ferguson; I think they should be freaking out more, because a lot of their value is they have products close to businesses, but two-day shipping gets in their wheelhouse," Wingo said. "It's not hard to imagine a one-hour delivery window where that leapfrogs what even local distributors are able to do.
However, even though the move may leave some competitors quaking, it's not clear how significant of an impact this will have on Amazon's bottom line. Though it neatly packages up its B2B offering in a more integrated way, it seems to be more of an extension of what they've already been doing.
"I'm not sure what the fuss is," said Needham & Company analyst Kerry Rice. "I don't really think it's that different than somebody going online and ordering supplies from Amazon today. Maybe it expands their addressable market to somewhat larger companies, but I don't know if that'll be enough to move the needle on revenue."