FILE PHOTO: The logo of Amazon is seen at the company logistics center in Lauwin-Planque, northern France, November 15, 2022. REUTERS/Pascal Rossignol
LONDON (Reuters) -Amazon plans to expand its business selling office supplies in Europe and internationally after the pandemic helped boost sales as companies shopped more online and looked for bulk discounts.
The company is looking for high growth, high margin businesses to pursue as it plans to close all 68 of its physical book stores, pop up shops and “4-star” stores in the United States and United Kingdom, ending some of its longest-running experiments in brick-and-mortar retail.
Amazon (NASDAQ:AMZN) Business’ gross sales in Europe grew at a compound annual rate of 25% from 2020 to 2022, vice president Alexandre Gagnon said in an interview.
In Europe, the business launched first in Germany in 2016, then in Britain the following year and in Italy, Spain and France in 2018. Amazon Business clients in the region include Siemens Gamesa, Centrica (OTC:CPYYY), and ABB, the company said, and it also supplies IT and healthcare equipment and school products.
Amazon declined to specify which countries it would target next.
It is spending on logistics to make it easier for companies in Europe to buy things like office chairs, desks, paper and printer ink in bulk, Gagnon said, with a view to winning contracts to supply them.
The business offers potentially higher margins than Amazon’s main consumer business, as making a smaller number of bulk deliveries is cheaper, per unit, than getting millions of small parcels to individuals’ doormats.
“Because businesses buy in larger quantities, the fulfilment economics are more advantageous,” Gagnon said, adding that Amazon gives companies discounts for bulk orders.
When COVID-19 lockdowns in 2020 and 2021 suddenly forced employees to work from home, companies and individuals had to invest in furniture and equipment for their home workspaces.