Amazon.com Inc. Wednesday announced that it is offering a Corporate Accounts program to draw businesses, libraries, schools and government buyers to order supplies from the Seattle-based Internet retailer.
In a change from Amazon's current business model, corporations and other volume purchasers will be able to set up a running account and use online purchase orders instead of paying for each purchase with a credit card.
According to an announcement, "The program also features a suite of new account management tools designed specifically for corporate and institutional buyers. Corporate account holders will also enjoy access to an online order history for all account purchases; one consolidated, line-item bill for all account activity; and the option to receive an e-mail notification every time a purchase is made."
Amazon already has customers for the new Corporate Accounts program, including Johns Hopkins University's Sheridan Libraries, Northwestern University Law Library, Stanford University Libraries and Oracle Corp., the company said.
Adding corporate customers makes sense to round out Amazon.com's business model, said analyst Alan Alper at Gomez Inc., a Waltham, Massachusetts-based e-commerce, market research firm.
"They have captured the imagination of consumers. Why not corporate?" Alper said. "If Amazon is missing one segment of the market, it would be corporations."
It could be difficult, however, to make money on the venture in the short term, since many corporations are tightening budgets in what Alper calls a "corporate recession." Companies also tend to resist changing their business practices and like to stick with product-specific distributors with whom they have established business relationships.
"Look at all the business-to-business exchanges," he said, "Great idea in theory, but it has failed to [catch on]." Another challenge for Amazon will be to ensure that orders turn into revenue, especially without relying on credit cards, he said.