Amazon Business (B2B on Amazon)
Per unit, an order through Amazon Business usually nets more than the same order sold direct to a store, because the business buyer pays a near-retail price and the wholesale buyer pays roughly half of retail. Per order and per year, wholesale direct usually wins, because the store's order repeats and multiplies across accounts without a referral fee or an FBA fee on every unit. Both of those statements are true at once, and the way to hold them together is to run the numbers on a single order and then ask what happens to that order over twelve months.
This article does exactly that with one product. Bring your own numbers and swap them in.
The product and the order
A plausible product: a ceramic pour-over coffee dripper, listed at $32 on Amazon. Landed cost including inbound freight is $9.40 per unit. It ships in its own retail box and weighs a little under a pound packed.
The order in both cases is 48 units. On Amazon Business that is a cafe group buying for six locations at your top quantity tier. In wholesale direct it is a kitchenware store taking four cases of 12.
Everything below is per unit unless stated otherwise, because per unit is where the fees live.
The Amazon Business order, fee by fee
Consumer price is $32. Business price is $30. The 24-plus tier is $27.50, so a 48-unit order pays $27.50 a unit, $1,320 in total. How tiers are built to land there is in quantity discounts for sellers.
Referral fee at the standard rate for the category on a $27.50 sale is about $4.13 per unit. Some categories charge a reduced referral rate on the portion of a business order above a threshold, which would trim this a little on a large order; check your own schedule using Amazon Business fees for sellers before you rely on it.
FBA fulfilment fee for a packed weight just under a pound in the standard size band is about $5.40 per unit. Multi-unit orders of the same ASIN sometimes get a small per-unit reduction; assume none.
Monthly storage on 48 units of a dripper-sized box, prorated to the roughly five weeks the units sat before the order, is about $0.12 per unit.
Inbound shipping to the fulfilment centre, spread over the units, is about $0.45.
Advertising. Business reorders come mostly from order history, but the first order of the group came through a sponsored placement. Spread over the units, call it $0.90.
Payment. The buyer used Pay by Invoice, so the $1,320 arrives when they pay or on the due date, at no cost to you unless you choose the paid faster option. Cash arrives about 30 days later. The mechanics are in Amazon Business net terms.
Per unit: $27.50 minus $9.40 landed, minus $4.13 referral, minus $5.40 FBA, minus $0.12 storage, minus $0.45 inbound, minus $0.90 ads. That is $7.10 per unit, or $340.80 on the order. Amazon did the pick, pack, ship, customer service, returns, invoicing and credit. You did nothing after the units arrived at the warehouse.
The wholesale direct order, fee by fee
The store buys at $16 a unit, half of retail, which is the ordinary keystone a kitchenware store expects. Four cases of 12 is $768.
There is no referral fee. There is no FBA fee.
Fulfilment is on you. You pick 48 units from your own stock or from a 3PL, pack them into a master carton, and ship. Ground shipping for a 48-unit carton across two zones is about $38, so $0.79 per unit. If a 3PL does the pick and pack, add about $0.60 per unit. Call fulfilment $1.39 per unit.
Storage: you are holding these units yourself or paying a 3PL a bin fee. Comparable to Amazon, about $0.12 per unit.
Inbound freight from the factory is the same $0.45 per unit, since it was landed cost either way.
Advertising: none. The store found you, or you found the store. Replace it with the cost of your time selling, which is real but does not fit on a per-unit line. Ignore it for this order and remember it for the year.
Payment: the store asked for net 30, and this is their second order so you agreed. You invoice, wait, and carry the risk that they pay late or not at all. Assume they pay on day 34.
Wholesale packaging. The dripper's retail box is fine for a shelf, but the store wants a case pack with a barcode on the outer carton. Your factory does that for about $0.20 per unit on the next run; on this order you labelled cartons by hand.
Per unit: $16.00 minus $9.40 landed, minus $1.39 fulfilment, minus $0.12 storage, minus $0.45 inbound, minus $0.20 case packaging. That is $4.44 per unit, or $213.12 on the order. You did the selling, the invoicing, the packing, and the chasing.
The comparison on one order
Amazon Business nets $7.10 per unit and $340.80 on the order, paid with certainty in about 30 days, with almost no labour. Wholesale direct nets $4.44 per unit and $213.12 on the order, paid when the store pays, with a fair amount of your labour.
If the question is which channel makes more on 48 units, the answer is Amazon Business, by $127 on this order. Anyone telling you wholesale is more profitable per unit has not run the numbers on a product with a keystone wholesale price and a $5.40 FBA fee.
That is why the per-unit view is the wrong frame, and why the next section exists.
The same two buyers over a year
The cafe group on Amazon Business reorders. Say they take 48 units a quarter as drippers break and new locations open, so 192 units a year at $7.10, or $1,363. Your business analytics will show them as one of your best repeat buyers. There is no lever you can pull to make them order more, and if a competitor takes the business Buy Box on your ASIN next spring, the reorder goes to them. The buyer was Amazon's customer the whole time.
The kitchenware store reorders too, say 48 units a quarter, 192 a year at $4.44, or $852. Less. But the store is one account, and a store that reorders every quarter is the reference you use to open the next one. By the end of the year you have eleven stores on the same rhythm, or a regional distributor who serves forty of them and takes 40 cases a month at $14, a dollar or two below the store price, because the distributor is doing the selling now. At $14, the per-unit contribution drops to about $2.44, and forty cases a month is 480 units, so $1,171 a month, or about $14,000 a year, from one relationship. Nobody on Amazon Business is going to place that order, because nobody on Amazon Business is buying to stock forty stores.
The Amazon order is a better order. The wholesale order is a better channel, and it is better precisely because its per-unit margin is lower: that lower price is what pays the store and the distributor to sell for you.
What this tells you to do with each channel
Keep selling to business buyers on Amazon and price for them properly. It is the highest-margin unit you will sell, it costs you no labour, and the reorder data is the best proof of demand you have. Set the tiers to clear your floor and stop worrying that a quantity discount is too generous.
Do not try to make Amazon Business into wholesale by pushing tiers below your floor hoping to attract a reseller. The channel cannot reach a reseller's price, and the buyers who fill carts there are not resellers anyway.
Do open the wholesale channel, and price it at real wholesale from the first order, even though the per-unit number stings next to your Amazon margin. The store can only sell your product at $32 if it bought it at $16. Price it at $22 to protect your margin and it sits on the shelf marked up to $44, and you have lost the account.
Finding the store or the distributor is the part that takes effort, and it is where most Amazon brands stall, because there is no Buy Box to win and no ad to run. Paste the listing into WholesalePilot to see a preview of the distributors and retailers that would carry the dripper. Then run this same arithmetic with your own landed cost and your own FBA fee before you send the first quote, so you know what you are agreeing to per unit, per order, and per year.