Amazon’s office supply business booms, defying skeptics

The Amazon Business office-supply unit has attracted large-business customers, despite a contention by the Federal Trade Commission and a U.S. district-court judge that Amazon would have trouble competing with Office Depot and Staples for these customers.

Amazon.com said its online store for office supplies has logged more than 1 million business customers since launching two years ago — including large firms that U.S. antitrust regulators and a federal court thought it would have trouble luring away from competitors.

The e-commerce giant is trumpeting the client roster of Amazon Business, as the unit is known, as a big success.

It’s 150 percent bigger than in July this past year. And it includes, Amazon says, companies of all sizes, from hospitals and restaurants to local governments and Fortune 50 companies. Amazon cited King County, the U.S. subsidiary of industrial conglomerate Siemens and Stanford University as clients. Amazon didn’t disclose total sales for the year.

Large institutions are key to Amazon’s new venture because they are the turf of rivals Office Depot and Staples, huge suppliers with the expertise to navigate big corporations’ stodgy purchasing practices that hinge on requests for proposal and multiyear contracts guaranteeing discount pricing.

When antitrust officials at the Federal Trade Commission (FTC) contested the proposed $6.3 billion merger between Office Depot and Staples in 2015, the companies contended that Amazon Business, as well as regional office-supply firms, would step up to fill any competitive void left by the combination.

The FTC, the companies said in a statement, “refuses to even acknowledge the rise of new competitors, such as Amazon, and the disruptive effects of the digital economy.”

In May 2016, a U.S. court sided with the FTC. Among the arguments wielded by the court was Amazon Business’ lack of “demonstrated ability” to compete in the business-to-business space “on par” with the combined might of Office Depot and Staples within the three next years.

The judge expressed skepticism that Amazon’s do-it-yourself approach to purchasing would fare well with the bureaucratic requirements of large corporations. “The evidence before the Court simply does not support a finding that Amazon Business will, within the next three years, either compete for large (requests for proposals) in the same way that Office Depot does now, or so transform the industry as to make the RFP process obsolete.”

In a news release Tuesday, Amazon said that its business-to-business platform offers “millions” of products from 85,000 sellers. Other customers highlighted by Amazon were Con Edison of NY, Gwinnett County Public Schools in the Atlanta area, Intermountain healthcare, Johns Hopkins University and the Mayo Clinic.

“We are grateful to our customers for helping us reach this significant milestone,” said Prentis Wilson, vice president of Amazon Business.

By Ángel González for Seattle Times 

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