Recently, I listened to a report on Amazon's corporate purchasing forum and heard about a new concept of B&C integration. The general idea is that as the economy declines, more and more small wholesalers will choose to make small purchases on the C-end platform. At that time, I didn't think much of it and thought it was just Amazon promoting its own corporate purchasing.
It wasn't until a conversation with the person in charge of the B-end during a daily chat that I learned that the advertising effectiveness on the B-end was very poor compared to the C-end. I suddenly connected the dots and realized that I could finally upgrade my independent website to version 2.0.
Table of Contents#
01 / My Thoughts
02 / Amazon Corporate Purchasing Commission Discounts
03 / Operational Model
04 / Implementation Plan
01 / My Thoughts#
After the second half of 2023, Amazon's traffic has become increasingly expensive. In order to find a way out, I thought about increasing the repurchase rate to offset the cost of advertising. However, there was a new problem: Amazon's commission is high and is charged per item, so can we save a large portion of it?
Most sellers don't have independent websites because the cost of attracting traffic is also high (mainly due to lack of trust) and the conversion rate of advertising is not high enough. It could also be due to a lack of a good supply chain. So before implementing today's practice, we need to determine if we can do business on the B-end.
In recent years, I have met many friends who do business on the B-end and have learned a little bit about it. Just as they envy me for having fixed orders on Amazon every day without having to haggle with customers, I also envy them for easily starting with orders worth over a hundred thousand, without inventory risks or high warehousing fees. Instead of envying each other, can we combine the advantages of both?
Returning to the topic, since the advertising effectiveness on the B-end is uncontrollable and the cost of trust is higher than on the C-end, can we start by building a C-end brand with B-end attributes on the C-end platform? Isn't this what Amazon mentioned before as B&C integration? By using the controllable and fast-effective advertising characteristics of the retail industry, we can expand brand influence, lower the wholesale threshold (by providing small wholesale discounts), and thus reduce customer trust costs, increase repurchase rates, and premium rates.
02 / Amazon Corporate Purchasing Commission Discounts#
With the upgrade of Amazon's corporate purchasing strategy, there are some commission discounts, including quantity discounts and bulk order discounts. See details
Quantity Discounts#
For the sale of single-unit products, the sales commission is 15%. As the quantity of products sold increases, the sales commission will decrease to 12.8%, 12%, and 11.3% respectively.
- 1 unit: 15%
- 2-9 units: 12.8%
- 10-23 units: 12%
- 24 units and above: 11.3%
Bulk Order Discounts#
For bulk orders made through the inquiry quotation tool, the sales commission enjoys a "step-by-step decrease" for the portion with a transaction amount of over $10,000, with 7% for the $1-5 million portion, 6% for the $5-10 million portion, and 5% for the $10 million+ portion. The commission fee for the inquiry quotation tool is valid on the US and Europe sites (UK, France, Germany, Italy, Spain). View official documentation
03 / Operational Model#
Based on the above thoughts, I am planning to upgrade my independent website to version 2.0.
In version 1.0, I only wanted to use Amazon to attract traffic to my independent website. Due to the cost of trust, the independent website was only used for after-sales service and reluctantly completing some small orders. However, after a period of practice, the daily traffic to the independent website did not increase significantly, and the conversion rate was not high enough if we ran ads on the independent website. It wasn't until Amazon introduced the Brand Traffic Incentive Program and the Corporate Purchasing Commission Discount Program that we could compensate for the low conversion rate on our independent website.
In version 2.0, we no longer need to worry about whether Amazon's traffic is profitable. By using Amazon's in-site advertising and social media advertising platforms like Facebook, we can accelerate brand growth and allow customers to freely choose their ordering channels. With the Amazon Brand Traffic Incentive Program, we can also reduce commissions when customers are redirected to Amazon for purchases. Then, we can set up corporate buyer discounts for each ASIN in the Amazon backend. Finally, we can leave links and information about wholesale discounts on our website, creating a C-end brand that caters to both small B customers and retail customers.
04 / Implementation Plan#
- Have a branded domain name.
- Build an independent website. In most cases, I recommend using Shopify. If you want more freedom, I recommend using WordPress. You can find more detailed introductions and setup methods in the book "All About Independent Websites."
- Print the brand's official website on the packaging.
- Set up relevant sections on the website (brand story, bulk ordering (purchasing five or more items to enjoy wholesale discounts, affiliate programs, shipping policies, warranty policies, return and refund policies, privacy policies, terms of service).
- Apply for a Facebook advertising account and start advertising.
Finally, I wish everyone success in both the B and C ends and great prosperity.