Amazon’s B2B eMarketplace, Amazon Business, has launched Amazon Business Restock, which includes two new replenishment services: Managed Inventory and Vending. The company detailed the new offerings in a Sept. 24 news announcement.

The Managed Inventory service allows Amazon Business technicians to automatically restock one or more stockrooms or similar areas at a worksite, ensuring supplies are maintained. This service is available in select U.S. cities and continues to expand.

Meanwhile, by using the Vending service, vendors can manage product distribution via Amazon Business Restock vending machines. Account administrators can set product quantities and spending limits, while employees can access authorized items by entering a code or scanning an ID.

Alerts are sent to the Amazon Business team and administrators when stock is low, allowing for automatic reordering. This vending solution is set to launch in early 2025.

“With Amazon Business Restock, we are raising the bar for what customers should expect from their suppliers,” Amazon Business Head of Services Cody Tolve said in the release. “By using automated ordering capabilities and inventory reporting, we restock customers’ worksites with the supplies they need, backed by Amazon’s vast selection.”

Amazon said the new service will save businesses time and money by streamlining inventory management and improving order reporting. Amazon Business technicians will visit customer sites to deliver and reorder products as needed.

Amazon did not, however, share what the cost of this service is in its terms.

MDM’s Take

As the elephant in the distribution room ever since the 2012 launch of AmazonSupply, Amazon Business continues to rapidly gain sales volume to the tune of $35 billion in gross merchandise volume in 2023, a major jump from $25 billion in 2020. Along the way, the platform has launched a range of technology features that give sellers and buyers more options for engaging with it: Pay-Over-Time, an App Center, a System for Cross-domain Identity Management, Integrated Quoting, Budget Management, Guided Buying, integration with a slew of B2B payments platforms and more.

MDM Podcast: Amazon Business is Just Getting Started (November 2023)

While all of those offerings are tied to the technology side, this latest offering of Managed Inventory and Vending might be the first offering Amazon Business has provided on the purely service side. This can be seen as threatening to distributors like Grainger, Fastenal, Applied Industrial Technologies, MSC Industrial Supply, Wesco International and essentially anyone that likewise offers vendor managed inventory since service has always been the industry’s biggest differentiator and competitive advantage vs. Amazon.

However, it’s a different ballgame when considering that Amazon Business’ focus is still on commodity, non-technical business products — office supplies, light MRO, JanSan, foodservice disposables, safety/PPE products and to a customer base of commercial, healthcare, institution, education and government customers that need simple product.

It appears distributors’ industry expertise and consultative selling approach would see minimal impact, if any, from Amazon Business Replenishment and Inventory Management.

“We fundamentally believe that our covered distributors have better knowledge of their customers’ unique technical needs/operations, will visit/call on customers with more frequency, and have access to better depth/breadth of authentic technical products across their network,” Baird’s Industrial Equity Research division shared in a note on Oct. 9.

But this is still a threat in the long game. The mere existence of Amazon technicians and vending machines providing replenishment and inventory management for customers is just the latest foray for Amazon into the service world that distributors have always relied upon.

Related: Stop Trying to Sell Vending Machines to Your Customers (2018)

Amazon Relies on Fastenal Vending Machines

In a bit of irony to this discussion, Amazon is actually one of Fastenal’s largest buyers of its vending machines.

Baird’s Industrial Equity Research division detailed in an Oct. 9 note how, in an investor meeting at Fastenal’s 2018 customer expo, CEO Dan Florness all but namedropped Amazon as looking into the distributor’s vending platform to learn how to create its own when answering a question about “an online player that has some ambition down the road in your space”:

“It’s there. They could — anybody could come out with a vending platform. One of the things that I think is special about our vending platform isn’t the vending platform itself. It’s the vending platform with our branch and Onsite network. Anybody could deploy a vending machine to any point in the United States — any point on the planet. And I can monitor it, and I could ship you the product. That’s like a half step in the better supply chain. We believe we’re the full step in the better supply chain. We’re doing a whole bunch of things every day that are inside and outside that machine, so we’re able to channel it through that same network. But could anybody else come up with a vending platform? Heck yeah. I assume I know who you’re talking about. They spend $22 billion a year in R&D. They probably could come up with some things pretty fast. They’ve looked at what we have for a solution. They felt it’s a good solution for their distribution centers like a lot of their customers. But there’s always that risk from a multitude of competitive threats out there.”

While that commentary is more than eight years old, it remains true, even as other distributors, manufacturers and technology providers have likewise made major investments into a vending platform.

The Big Picture

Based on its description of the new service, Amazon’s new vending machines appear straightforward for the customer to customize in terms of setting minimum/maximum order quantities, replenishment standards and order authorization. They seem to lack the bells and whistles that many distributors’ smart vending machines offer in terms of internet connectivity and software that enable advanced functions like taking various forms of payment, gathering data on customer behavior and providing real-time inventory updates.

That said, this service launch is still a concern for distributors, especially if you don’t already offer VMI as a service. If you’re Fastenal or another distributor with a robust vending platform, you can shrug this off since your offering is far superior. But for everyone else, it’s very much worth keeping an eye on.

Particularly for those in the aforementioned business consumables verticals, this could warrant a discussion on if you think this Amazon Business service is likely to steal market share and what you should do about it.