Amazon Business: Definition and Uses

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Have you ever placed an order online and then realized you forgot one thing? There's no way to add it on after you push the "Order" button, so you either have to wait until you're ready to place a large enough order, or you pay to ship that one item. Well, Amazon has solutions to problems like that. They offer basic Amazon Business, and Business Prime accounts at several levels with different pricing that gets you free shipping on every order. You simply place another order for that item and presto! Free shipping, maybe even in two days or less. There are other benefits too, plus the option of selling products or services on Amazon.

Amazon Business Versus Business Prime

Amazon Business is a program offered for companies, whether large or small. Amazon describes it as being for "Sole proprietors and big business, purchasing pros and occasional buyers." To receive the benefits of the program, business owners need to open a free business account on Amazon.com.

Amazon Business Prime is an additional, optional service for Amazon Business customers. Business Prime charges fees based on the number of people who use the account. Prime's main benefit is free shipping on nearly all items, regardless of the dollar amount of the order. Items that are eligible for free shipping have a blue "Prime" logo next to them, and most items qualify. Other suppliers are shipping those that don't.

The person who initially opens the Amazon Business account becomes the account's administrator. They decide who will be able to use the company's Amazon Business account and has to approve each person on the Prime account. The annual fee for Prime depends solely on the number of registered users on the account.

The number of users on the account isn't necessarily the same as the size of the business, although there is often a correlation. A huge corporation might only authorize the 10 people in their purchasing department to use the account. Another company might authorize 100 or more people. Of course, a small company might consolidate all purchasing requests to one or two people.

A business may have an Amazon Business account and not opt for the Amazon Business Prime service. However, a company that wants to join Business Prime must have a free Amazon Business account or open one.

You may wonder if you can use your personal Amazon Prime account, with fees of $12.99/month or $119/year as of September 2018. The answer is yes; you can use your individual Amazon Prime account to buy business products and have them shipped to you for free. But you will miss out on getting the better business pricing that you get with the free Amazon Business account, so it makes sense to at least sign up for that if you aren't sure you want to pay for the Business Prime service.

Amazon Business/Business Prime Benefits

It's important to understand what comes with each type of account, and each plan, to know which one to choose.

Amazon Business benefits: The basic Amazon Business account gives you many benefits, including special pricing on items businesses typically use. This special pricing doesn't require large, bulk orders. But, if you do order an item in large quantities, you can save even more and use their comparison shopping feature to get the best deals. It will also give you details about sellers, such as if they're owned by women or minorities, or other demographics that may be important to you.

Orders of $25 or more ship for free, with occasional exceptions on non-qualifying items that are fulfilled by suppliers other than Amazon. Usually, when you encounter a non-qualifying item, you can easily find a substitute for it that does qualify for Business Prime free shipping.

Amazon will also ship large orders on a pallet right to your loading dock if your order qualifies. That way, you have it all in one place to distribute the way that works best for your company. Speaking of all-in-one-place, Amazon also provides free analytics so you can keep track of purchases by individuals, by item category, groups and more, as well as your overall spending.

Businesses can use different payment options for their accounts. For example, if you have a large purchase that several departments are going to use, you can split the cost among different users who have buying authority on your account, thus simplifying your bookkeeping. You can set spending limits for your users, and apply for credit lines through Amazon Corporate Credit Line. If your organization qualifies as a tax-exempt, you can enroll in the Amazon Tax Exemption Program.

If you're a purchasing professional with an e-system, you can connect it to Amazon. There are nearly 60 programs listed that they integrate with, from Adelpo to Workday, and if yours isn't listed, you can contact them to have it added. The website includes a tutorial video that leads you through the connection process.

Amazon Business Prime benefits: When you upgrade to Business Prime, you get free shipping on all orders regardless of the dollar amount of the order. If you're familiar with Amazon Prime for individual personal use, Business Prime operates on the same principle. No matter how many orders you place, even if you're only ordering one box of paper clips, it ships for free. With other shopping websites, you have to order enough to meet the minimum dollar amount to get free shipping. You don't need to worry about that if you're a Business Prime customer.

Some orders even qualify for free, two-day shipping. And orders of $35 or more may qualify for free, one-day shipping if your order is placed by a certain time of day. Some orders can be delivered on Saturdays or Sundays, and the system will ask you if you can accept packages on those days if that's the case.

Amazon Business/Business Prime Fees

Although it's free to have an Amazon Business account, the Amazon Business Prime service has an annual fee. The cost depends on how many people in the company have ordering privileges. There are four plans to choose from, with pricing as of September 2018:

  • Essentials: $179 per year for up to 3 users (max 3 users),
  • Small: $499 per year for up to 10 users (max 10 users),
  • Medium: $1,299 per year for up to 100 users (max 100 users) and
  • Enterprise: $10,099 per year for over 100 users.

Amazon offers a 30-day trial period for Business Prime. If you decide within the 30 days that you want to cancel the service, they will often pro-rate the fee and return the unused amount to you.

If you pay for one Business Prime level and then add more people authorized to use the account so that it pushes you to the next level, Amazon will automatically bump your business up to the next level.

For example, say you paid $499/year for the Small level because you authorized eight employees to use the account. Two months later, you added two more people, and then a month after that, you added another:

8 users + 2 users + 1 user = 11 users

That most recent authorized user pushed you to the Medium level which, at $1,299/year, is substantially more than the $499/year cost for the Small level. Sure, at that point, you can add 99 more people and still stay in the Medium level. But, are you going to add that many people?

It pays to keep an accurate tally of how many users you have on the account. That way, when you're going to be pushed into the next level, you can decide if it's worth it to the company to pay more for the Business Prime service. You might decide instead to consolidate orders and keep to a maximum of 10 authorized users. Anyone else who needs to order can go to one of those people and ask them to place the order. Since you get free shipping with Business Prime no matter what the size or dollar amount of the order, they don't even have to try to combine orders.

It's kind of like sitting in an emergency exit row on an airplane. The flight attendant asks you if you're willing to take on the responsibility of pushing out the window in the event of an emergency. If you're not willing to do that, you have to move to another seat and make room for someone who is willing. If one of your authorized users doesn't want to be bothered placing an order for someone else when they're not ordering anything themselves, they lose their order authorization on the account, and the eleventh person becomes the tenth authorized user instead.

Amazon Business/Business Prime Restrictions

There are some rules, caveats and exceptions for both accounts.

  1. Business Prime can only be used for employees to ship products to your business, not to your customers.
  2. Orders over $1,300 may require a signature.
  3. Shipping speed can be affected by large quantities; for example, it may not arrive in two days.
  4. Not all items qualify for free shipping. Look for the blue "Prime" or the words "free shipping" displayed by the item.
  5. There is no AmazonFresh option for the business accounts, but they do offer some bulk foods that businesses typically buy, such as candy, pretzels, gum and etcetera.
  6. Sometimes items are available at lower prices on Amazon but offered by other sellers; however, they don't come with free shipping. Amazon always alerts you if this is a possibility for your item, though, and also if used items are available on the website at a lower cost.

Amazon Business Reviews

It's tough to find a negative review of the programs, services and options that Amazon offers its business customers. The company seems to have thought of everything business professionals want in online shopping; a big enticement to encourage you to shop with them instead of with several different suppliers.

Their customer service contact phone numbers and email are prominently displayed. The website conveys an accommodating feel, in several places stating that if you don't see what you need from us, ask. It's clear they want business accounts. Getting customers is one thing, but to keep them, they have to follow through with a website that's easy to navigate, on-time deliveries and excellent customer service. Amazon is doing that, according to the positive reviews.

Some say the biggest benefit is the free shipping. To others, it's better pricing for businesses. You need to decide for yourself which benefits matter most to you and how to best take advantage of them.

Amazon Business Seller Program

On the flip side of ordering through Amazon, you can also sell on Amazon. As with Amazon Business accounts, the company has options for individuals and small businesses as well as big businesses.

For example, you can sell a few items online or hundreds of items for the starting fee of $39.99/month. You pay additional fees depending on what other services you want. They'll even handle packing and shipping them through Amazon Fulfillment Services. Individuals can sell for $.99 per item plus fees.

Or, if you provide services instead of products, the list of current Selling Services on Amazon categories includes professionals ranging from auto glass installers and plumbers to interior designers and music instructors. Instead of paying a fee upfront or monthly to advertise, Amazon bills the customer and takes between 15 percent and 20 percent of the bill as their fee, and pays you the rest.

The percentage depends on the amount of the bill. For the portion of each bill that's up to $1,000, Amazon takes 20 percent. For the portion that's over $1,000, they take 15 percent as their fee. Businesses like it that they only pay after they get work through Amazon.

It's no surprise that many books about how to sell on Amazon are available for sale on Amazon, written by independent authors. Most also have a less-expensive Kindle edition for sale.

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About the Author

Barbara Bean-Mellinger is a freelance writer who lives in the Washington, D.C. area. She has written on business topics for afkinsider.com, smallbusiness.chron.com, Harbor Style Magazine, the Charlotte Sun and more. Barbara holds a B.S. from the University of Pittsburgh and has won numerous awards in B2B and B2C marketing.