Can Amazon Be An Online Price Club That Tempts Vending Operators?

April 30, 2015, a leader in the world of online retailing, is making waves due to the recent launch of Amazon Business, a new marketplace on that combines the selection, convenience and value with new features and unique benefits tailored to businesses.

It was one of the reasons Amazon had a booth at the NAMA OneShow last week in Las Vegas, NV. I stopped in while walking the show and talked to the representatives. They were announcing the Amazon Business opportunity and gauging the interest from operators. From what I’ve seen so far, while Amazon Business is in its early stages, it presents an interesting concept for our industry. 

Online price club

I am convinced there is a place for an online distributor of products, especially in the transforming vending industry where operators are looking for new and different better-for-you products without committing to dozens of pallets. At the NAMA OneShow, I heard from several operators interested in the new edible products they saw. Whether they could try the products in their vending machines hinged on whether they were available through a distributor or buying group. Most operators just couldn’t or didn’t want to buy the volume required by the supplier for these untested and often national unknown items.

Amazon also allows products to be segmented in a vast number of ways. Operators can search for non-GMO products, vegetarian, kosher or any key description. This will allow operators a quick way to fill gaps in offerings with specific types of trending items. 

If operators run micro markets, there is also a broader opportunity. Not only can they now look at larger or more elegantly packaged foods, but also non-foods. There has been a movement the last few years to try out different non-perishable items in micro markets depending on the location. I’ve heard of everything from umbrellas to birthday cards. Distributors and buying groups have their own benefits, I won’t argue Amazon will replace those business, but could it present the one-stop shop that offers small and mid-sized operators the opportunity to trial new product lines?

Is it also a threat?

Let’s change direction now and talk about how Amazon Business might threaten the industry, because it certainly does. Specifically, office coffee service operators have already found themselves undercut by the prices Amazon can offer for not only coffee, but the ancillary products that go with it. And Amazon delivers right to the office door. In answer to this challenge, operators must play to their strengths. Operators must remember, and advertise to locations, the fact that they can offer what Amazon, big box stores and office supply stores can’t. A person, a face, someone to call when the chips are down that can provide knowledge of various brewers, equipment maintenance, statistics of the latest product trends and that personal service that only in-person communication can give you. That in-person part might be a customer representative, but it might also be the route driver that delivers regularly. Training and recognizing route drivers will become much more important in the future if we are to highlight the service part of the business. 

Call me an optimist, but I prefer to focus on the opportunity that Amazon Business presents to the vending, micro market and OCS operator. Let’s see how well the segmentation works and how we can use it broaden the product lines we offer and increase same-store sales – the best way to increase revenues. We can’t change the fact that Amazon Business has come to town, but we can benefit from their new B2B marketplace.