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Business to Business - Essay Example

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From this paper, it is clear that business to business or simply B2B indicates a commerce system where transactions take place between business houses. Under a B2B system, parties involved can be a manufacturer and a wholesaler or a retailer and a wholesaler…
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Business to Business
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Download file to see previous pages Amazon.com, the world’s largest online retailer, has developed improved mechanisms for promoting its B2B e-business transactions. This paper will analyze Amazon’s B2B arrangements with other companies and the nature of B2B transactions the company engaged in. In addition to discussing Amazon’s technical architecture that supports its B2B transactions, the paper will also identify the benefits and drawbacks of these transactions. Amazon’s B2B transactions Amazon.com has developed B2B arrangements well with firms across the globe. According to the Forbes writer Kanellos, Amazon is under an ongoing evolution process where the organization is transferring from a consumer retailer to a logistics provider to business houses. Amazon allows third parties (or external marketers) to sell their products by means of its online retail services. Firms can display their inventory information, sell their products, and receive payments online once they created an account in Amazon.com. In addition, sellers can also make use of Amazon’s Webstore, which would help them take advantages of search engine optimization and backend organization. As Kanellos points out, the volume of products sold by external marketers on Amazon website increased to 36 percent. Amazon follows an interesting B2B model in delivering services to third-party retailers. Traditionally, a store owner or a wholesaler considers the difference between the retail and wholesale price as its profit. In contrast to this conventional business practice, Amazon likes to obtain a commission on its online retail services. Market analysts observe that this business model has greatly assisted the company to advance in B2B marketing. The organization has developed an affiliate program for promoting its products and its online retailers. Businesses can earn income when Amazon products are purchased through clicking those firms’ advertisement link. Publishing is another B2B service offered by the Amazon. The company launched its self-publishing site in 2011with intent to assist individuals to self-publish their movies, music, and books online and thereby to eliminate intermediary costs. Once an individual obtains a copyright on his products like books or movies, he can use the advertisement and payment solutions provided by the Amazon. The company offers free publishing options and finds its revenues through royalty payments and shopping fees. As Smith opines, the fulfillment program is Amazon’s one of the major advancements in its B2B environment; this program allows organizations to store and ship their products through Amazon’s fulfillment center. Once the Amazon fulfillment center receives the items sent by companies, those items are cataloged into the firm’s system. Under this option, companies can either sell their offerings through Amazon.com or complete the sales process using their own techniques. When items are ordered, Amazon fulfills the orders and delivers the products to the end customers directly. Amazon’s back office system assists business houses to track the fulfillment. It is identified that Amazon has B2B relationships with different sizes of businesses ranging from sole traders to corporate giants. As per Amazon’s B2B strategy, new and un-established companies need to commence their operations with personal accounts.  ...Download file to see next pages Read More
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