Amazon Supply
amazonsupply.com
amazonsupply.com
Needless to say, Industrial Supply is a low margin, volume business that requires high service levels. Most Industrial Supply companies sell the same products, there really isn't a differentiator. As always in retail, price, selection and availability are crucial in making sales.
This is a good match for Amazon, and obviously they have everything in place already to make this a success e.g warehousing, payments, ordering channels etc. It's worth noting most companies who seek industrial supply want credit - amazon already accepts credit lines though obviously these are not as nice as the cash they get instantly from credit cards and payments.
I guess the only thing Amazon lacks in this regard is a physical presence, something that Grainger, Fastenal, Airgas etc and other Industrial Supply companies have in hundreds/thousands of stores.
In terms of the market opportunity and potential success for Amazon, Industrial Supply is a huge and fragmented sector. The leaders mentioned above have low single digit market share, the same applies world-wide. The business itself is not hugely profitable, but it moves slowly and hence is relatively straight forward in regards to operation, forecasting and numbers.
Amazon's targeting the customer that can forcast his needs a few days in advance, and that's a very big slice of the market.
But i guess that it's a small non-strategic business, so they won't bother.
I think the biggest problem with Amazon is it's hands-off approach to selling products. The reason why there hasn't been any innovation in this sector is because of the interconnected relationships between managers of firms needing products and the salesmen that sell the product. More often than not, the firms have no idea what they actually need, and the sales people have the knowledge to deliver exactly the part they require.
I think that unless Amazon has a very large, and more importantly knowledgeable staff, what you will find here is a lost leader. The only thing that I see amazon bringing to the table is their warehousing.
I guess that's the difference between consumer and business to business in many respects - one knows what they want, the other not so much.
The other bit is there is the whole interaction model. In the fabricator world they seem to get an account with one of these companies, order various bits all month long and then get a roll up once a month or so on their purchases. That doesn't seem to be an Amazon compatible model yet.
It will be interesting to see how it works out.
Indeed. I've for years been impressed with how sophisticated McMaster-Carr's e commerce operations are. That, and I wonder if not having a "Big Book" will hinder Amazon at all. I've lost days of my life reading MSC's catalog...
Say I want some gallium[1]. A search in Amazon turns it up, under "Industrial & Scientific". But a search in AmazonSupply (which claims to cover "scientific, industrial, & business") does not. So AmazonSupply is not just a rebranding of Amazon's existing I&S section. What is it?
[1] You want it, too. Gallium melts at 30C, so it's a solid on your table, and a liquid in your hand. Fun stuff!
Because it's already in my cart...
I mean, I wouldn't eat it. But incidental handling is not going to hurt you.
There is some dispute on this, but if there is a dispute then that means it can't be very poisonous.
This is accurate: http://www.tumblr.com/tagged/gallium+safety
Mom & pops focus more on retail / small business customers who are price sensitive, so this is going to hurt them.
But the big players mainly rely on their services because industrial and commercial customers care more about minimizing downtime and reliability than on price. The customer service at these companies is great and helps sort through 1 million+ skews, which is completely different from picking 1 out of 20 TVs at Best Buy.
Their customers are companies like Caterpillar who need projects to be on time and same day delivery. Fastenal even puts fasteners directly inside of bins on the assembly lines so that the customer doesn't have to haul a huge chunks of metal.
Amazon would have to seriously boost its service (ie, same day to location) delivery to gain the non-retail customer base as well as expand its sales staff expertise dramatically (which of the 1000 cutting tool bits do I need for X job, what angle does it have to be installed at etc?). What this will do is consolidate the industry with Amazon and the existing big players at the expense of the mom & pops which are over 80% of the market.
It's a $140-160bn a year market. Just goes to show how much opportunity there is in technology to expand outside of consumer-focused businesses.
Petri Dishes, 100x15mm $133 vs. $79 (sterile, which is better) Amazon: http://bit.ly/I550u2 P212121: http://store.p212121.com/petri-dishes/
Allihn Condensers, 200mm Jacket, $85 vs. $43 Amazon: http://bit.ly/I5PC3p P212121: http://store.p212121.com/allihn-condenser/
It will be fun to see how they adjust moving forward.
Side note: McMaster has, hands down, the best/most useable site I've ever used. The flow always gets me quickly to exactly what I want, even if I don't know what that is going in.
It's a hardware store that sells pretty much every single part you could imagine or need.
What would you want Amazon to learn from them?
In any event, this is very cool. Especially for home robotics hobbyist :)
I'm still waiting for someone to disrupt the hard to search supply shops like Jantz: http://www.knifemaking.com/Default.asp
What happened to SmallParts.com? SmallParts, Inc., joined the Amazon family in 2005. In the past seven years, the dedicated team at SmallParts helped us expand our service and selection until we have grown well beyond our original focus of tubing, parts and fasteners for the medical supply and research industries. We have chosen the name AmazonSupply to help communicate our new, broader selection....
I like Amazon alright, but I love McMaster. Hope they can keep it going.
The website has a lot of relevant data that you need to make informed buying decisions. sometimes they even have cad file downloads with tolerances listed depending on the part.
Selling books/video online rather than in a store was a breakthrough area when Amazon got into it, ordering parts and materials isn't a new idea - Amazon is a lot less disruptive in this area.
My guess is that the biggest hit will be small specialist model/hobby shops, but unless you are in a few big cities there aren't any of these anyway.
at work --- not so much. have to create an account to charge to, worry about lead times. not worth it.
everything there i could find on amazon.com, and from my experience buying small lab tools from them, it's a 80% return rate.
last one was a set of precision tweezers which only 1/3 of them properly closed in alignment.
The good brands are 2x and 3x the price at a proper store.
These parts are being directly stocked and sold by Amazon.
As a counter-anecdote, I can't remember problems with 3rd party sellers. But then I'm only buying stuff like books.
i did bought some of those from 3rd party, and those are in the garbage.