According to RBC Capital Markets analyst, Mark Mahaney, Amazon is already selling directly to 1,000,000 small businesses. In other words, Amazon has essentially become a wholesale supplier to many small businesses across the United States. 

Small businesses, with a push of a button, can receive supplies and products delivered directly to their doors, by one of the frequently seen Amazon vans.

So how can small business suppliers compete against Amazon?

#1 Suppliers can focus on purchasing closeouts, and then passing on the savings to their small business customers.

#2 Suppliers can sign exclusive territory deals with manufacturers, brands, and importers. By signing exclusive representation deals, suppliers can have an exclusive right to sell their products in their local marketplace.

#3 If you can't beat them, join them. Suppliers can become third party sellers on Amazon, and sell their products through the giant ecommerce website.