Is Amazon Right For Your Business?

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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.

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.

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.

CEO of AdvertiseMint, a Facebook Advertising Agency Author of The Complete Guide to Facebook Advertising

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