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New Customer Acquisition and Lower ACOS

B2B Amazon Strategy Boosts Profitability

Background

Tiger Supplies, an office furniture and contractors’ supply brand, needed help growing their Amazon channel and profitability. Already managing their B2C Sponsored Products campaigns, the Adlucent team saw an opportunity to expand into Amazon’s B2B offerings, tapping into a new audience through Amazon Business. By 2017, almost 40% of B2B buyers were finishing their purchases on Amazon. And, U.S. B2B ecommerce will grow to $1.13 trillion by 2020, according to research from Forrester.

As Amazon tries to recruit more Sellers to the Amazon Business platform, which originally launched in 2015 and has since grown its revenue tenfold, they are offering brands free one-day shipping, a variety of promotions, and tiered pricing as incentives. These perks, along with the ability to integrate directly with procurement software, offer a lucrative opportunity for those that sell commodity B2B products.

The Challenge

With an intent to boost their Amazon revenue as part of a cross-channel marketing strategy with Adlucent, Tiger Supplies originally came to us to manage Sponsored Products Campaigns in the B2C sector. When their strong performance on Amazon drove their revenue high enough to qualify for the Amazon Business platform, they came to their trusted account managers at Adlucent with the challenge to build out the new program from scratch and manage it with the goal of new customer acquisition, while maintaining their average cost of sales (ACOS).

How Adlucent Helped

Since Tiger Supplies is in the B2B sector, Amazon Business offered a clear benefit with access to a new customer base that had a high probability of reorders and significant lifetime value. Having managed their B2C Amazon account already, we were able to come into the new program with better data and build out a successful Amazon Business strategy based on extensive detailed customer insights and business-specific expertise.

From Tiger Supplies' B2C Amazon account, we mined data to find top sellers from the brand, as well as Amazon’s top sellers in their categories. From there, our Amazon team was able to target keywords from those top listings and create ads targeted to those specific listings to compete with leaders in the category. Ensuring competitive pricing and strategic ad placement led to notable success in the B2B ad space, paving the way for the brand to stay a step ahead of the competition in furniture and supplies and solidify their presence in the marketplace.

The Result

The venture into Amazon Business brought about a 1.5X larger average order value than the B2C Amazon space. It resulted in a revenue increase YoY from B2B customers compared with prior to integrating Amazon Business and positively impacted revenue growth overall. The most impressive growth was in the government and education customer segments, which saw YoY revenue growth of 118%.

With a better grasp on the value of integrating Amazon Business into the marketplace strategy and overall cross-channel approach, Tiger Supplies was able to achieve increased revenue while reducing ACOS by 1%.  It all paid off, as total B2B revenue went up a significant 89% YoY, with overall revenue up 59%.

Amazon-YoY