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.