Amazon stops short of Brexit guarantees

Online retail Amazon has stopped short of providing any Brexit guarantees for its business clients despite a European expansion that it says could help UK firms manage supply chains across the continent.

Amazon. Pic: Paul Faith/PA Wire

The online retail giant is launching Amazon Business in Italy and Spain just over a year after bringing the business supplies platform to the UK where it counts a raft of FTSE 100 firms among its 100,000 customers to date.

Bill Burkland, head of Amazon Business UK, said the expansion - which follows roll-outs in the US, Germany, France, India and Japan - offers multinational firms a “consistent” marketplace to “streamline their purchasing” while providing “new exporting opportunities for smaller UK businesses”.

Sign up to our Business newsletter

Sign up to our Business newsletter

But when asked about whether Amazon was in a position to provide any guarantees around Brexit - either on prices or services given concerns about post-divorce tariffs with the EU - the answer was “no”.

Mr Burkland said that some of its bigger clients - which include hospitals, universities and major UK listed firms in the banking, engineering and pharmaceutical sectors - have access to account managers that help Amazon understand how customers “are thinking about their supply chain and what their pay points are and where they see opportunities that Amazon may be able to help them with”.

However “most of them aren’t about Brexit”, he said. “Most of them are about more mundane things.”

“But I think that if our customer wants to have a discussion about how Brexit may impact their manufacturing or their supply chain then we’d certainly be willing to be a part of that discussion and understand how Amazon Business, on a pan-European basis, might work,” Mr Burkland explained.

Amazon Business said it was not able to disclose the names of the larger businesses which have become regular customers on the platform, which connects companies with suppliers offering a range of products including laptops, office stationery, industrial safety equipment, and janitorial supplies.

Supplies can also be sourced directly from Amazon, which offers accounts for free and takes a percentage of the sales as it does on its consumer platform.

The retailer has tacked on additional services to grow its customer base in the UK, including quantity discounts, catalogue curation which can restrict purchases or cap employee spending, and line item detail that will show every product purchase on a company credit card statement thanks to work with the likes of Visa.

It has also been taking on financial risk through its pay-by-invoice model - which echoes supply chain finance services that are often provided by banks or suppliers themselves, and allows payment within 30 days of purchase.

Mr Burkland said: “Amazon does the credit assessment, Amazon takes on 100 per cent of the credit risk, Amazon accepts 100 per cent of the default if they do not pay or pay late, and Amazon pays the seller within those terms... so whether the customer should default or should pay late, Amazon would still pay the seller.”

But he insisted this service was in no way intended as a precursor to Amazon’s much-rumoured foray into banking.

“It’s absolutely not the reason we launched pay-by-invoice, and so I think from an Amazon Business perspective we’re just kind of laser-focused on providing the method of payment that business customers want... from an Amazon Business perspective it ends there.”

But he stopped short of ruling it out completely for the wider business, saying: “I guess you never say never with Amazon.”