Is Amazon Right For Your Business?
Amazon is an absolute leader in the e-commerce market. With so many people turning to Amazon when first searching for products — and with millions of Prime customers opting to order from Amazon so they can get free two-day shipping — smart companies ask if they should sell their products on the platform too. But the answer isn’t as obvious as you may think. Let’s explore both the benefits and the drawbacks of being an Amazon seller.
Getting Started is a Cinch…For Most Sellers
One of Amazon’s main benefits for brands is that it’s quick and easy to get started selling on the platform. However, certain categories have more stringent requirements for sellers, making them go through a more intricate approval process and expecting them to meet certain sales goals. Learn more about the categories and products that have higher approval requirements here.
Amazon Gives You the Audience and Tools You Need
We all know that Amazon has a strong and vast consumer audience. That means that companies can more easily tap into their target customers without doing the legwork to attract them to, say, a brand new website. And with all of the selling tools and advice Amazon offers, it’s a lot easier to create an online shop and add products than to start your own website (though you still may want to have one). Plus, if you opt for Fulfillment by Amazon (FBA), managing your store is even easier.
It Takes a Lot of Commitment to Be Successful on Amazon
If you want to have your products rank high on Amazon — and then keep them there — it takes a lot of time and attention. You can’t just list your products once and forget about them, even if they do perform well from the start. On top of regularly updating SEO and prices, you have to be diligent about checking and responding to feedback, both positive and negative.
There’s a Lot of Competition — and Competitors Aren’t Always Legit or Fair
Categories that have a lot of in-demand products are prone to problematic pricing for sellers. It’s common for newbie sellers to price their items extra-low in order to compete with the more established sellers and pull customers away from them. Another common scam is for companies to use a brand’s listings to sell similar — but lower-quality — products. These counterfeit products can lead to the original company — the one that sells legit, high-quality products — getting negative reviews on their shop. (One of the many reasons why it’s important to pay attention to your reviews.)
Products With High Mark-Ups Can Do Well
The only way to make Amazon worth it and to make a profit is by having a high enough mark-up so you can pay Amazon the fees they charge and still make enough money back. If you can’t do that, though, and you need to maintain a low mark-up on your products for some reason, Amazon may not be the best choice. Amazon can charge up to 20% per sale, and that’s on top of the listing fees. Between high commissions from Amazon, customer demand for free delivery, and the need to often lower your prices to stay competitive, you could end up putting in a lot of work for practically nothing in return.
You Don’t Have Total Control Over Your Shop
Amazon does try to help brands that are victims of counterfeit products or hijacking, but it’s not a foolproof process by any stretch. As the owner and possibly the manufacturer of a shop and its products, you may not feel like you have the amount of control you deserve over your brand. And when it comes to another seller attempting to sell your product, this is not just frustrating but also threatening to your brand.
Here’s another thing to consider: Amazon can shut down your seller’s account if you don’t follow their rules. If that happens, it can be pretty difficult to get your account reinstated. This doesn’t necessarily mean that you shouldn’t list on Amazon, just that if you do, make sure you’re clear on their guidelines and always follow them.
FBA Takes a Load Off Your Shoulders (But it Doesn’t Solve Everything)
There are definite upsides to handing off some of the responsibility to Amazon, and the FBA program is a major one. Fulfillment logistics are handled by Amazon instead of you having to take care of them. This frees you up to cater to customers and develop more products.
While FBA is a huge convenience for many sellers, keep this in mind: customer service is still your responsibility. So, if something goes wrong with the inventory, packaging, shipping, or returns, it’s your fault and problem to deal with, even if you’re relying on FBA to manage fulfillment for you. And as a reminder, customer service really matters — customers rate sellers, and if you get low ratings, it could have a major impact on your rank and sales.
Final Thoughts: Consider What Could Happen if You Don’t Sell on Amazon
While selling on Amazon is a personal decision that every brand owner has to make on their own, there is something big to consider when deciding whether or not to list your products on the platform. If you don’t list them, someone can purchase them wholesale and distribute them on Amazon. And if they’re successful, they’ll make a profit that could have been yours. Plus, even if you do opt to list on Amazon after discovering your items are already being sold there, it’ll be difficult to compete with an already-successful shop — even though those are your products.
By getting your brand and products on Amazon as soon as possible, you’ll be in control from the very start. And even if you build a website and start gaining traffic there, nothing compares to the number of people who are already using Amazon — and will continue to do so.
Brian Meert is the CEO of AdvertiseMint, a Hollywood-based digital advertising agency that specializes in helping successful companies advertise on Facebook, Google, Amazon, and Tiktok. AdvertiseMint has managed millions of dollars in digital ad spends in entertainment, fashion, finance, and software industries. Brian is the author of the best selling, The Complete Guide to Facebook Advertising, a member of the Forbes Agency Council, and a thought leader and speaker.