Amazon Business 'not a threat' to buyers, SM poll finds

Will Green is news editor of Supply Management
26 August 2015

Buyers believe Amazon Business does not pose a threat to the role of the procurement professional, according to a poll.

The SM Jury voted by 10 to two to say the online tool, which allows firms to make purchases with the ease of consumers on Amazon, does not undermine the purchasing function.

Miguel Santos, procurement senior consultant at Portugal Telecom, voted ‘no’. “The fact is that the very nature of acquisitions by firms demand that issues such as contract and delivery time be negotiated for each acquisition, since each has different needs and expectations,” he said. “It is not a click on a button.”

Christin Webb, senior procurement specialist at Memphis Light, Gas and Water Division, agreed, saying much of what the organisation bought had to be manufactured to order.

“It also appears that Amazon does not offer the negotiating of pricing, which is one of the key roles that procurement professionals take part in when trying to get the best bang for the company's buck,” she said.

“Without this option it seems Amazon doesn't threaten the role of the procurement professional because most companies will always look at savings, and while there are several options listed on Amazon, you can't knock them down from the lowest visible pricing.”

Tony Morris, procurement transformation consultant for EMEA at Fujitsu, also voted ‘no’. “It’s just another catalogue in the system,” he said.

However, Andy Davies, director of the London Universities Purchasing Consortium, voted ‘yes’, expressing concern that “Amazon’s dominant position across an increasing number of consumer markets will spill over to business”.

“Many people find Amazon’s online offering easy to search and easy to buy from, and if they look to replicate this experience in the workplace it may threaten competition in the longer term as B2B suppliers, with whom procurement functions have more established relationships, assured quality levels and advantageous terms, start to fall by the wayside,” he said.

“The danger is that Amazon will become supremely powerful across a wide range of supply markets, gradually diminishing buyer power to zero over time. There won’t be much that procurement professionals could do about it by then.”

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