Selling online is a wonderful way for companies, small and large alike, to become more successful. They can appeal to new customers, advertise their products more widely and even cut down on costs. Some owners don't want to create their own website or wish to sell on a more established platform. This is where Amazon comes in to play.
Amazon's Marketplace service is a convenient way for small- and medium-sized businesses to advertise and sell their goods. They can even choose for their orders to be fulfilled by Amazon. When half of all items sold on the website are from third-party sellers, it can seem like a great way to put your name in front of an established consumer base.
While this is certainly true, it seems as though Marketplace has just as many cons as it does pros. Let's take a moment to run through them so you can get an idea of what it's like to sell on Amazon.
Pros of the Amazon Marketplace
Why should businesses consider selling on the Marketplace? Here are some of the service's major benefits.
1. Getting Started is Simple
For most businesses, launching on Amazon is easier and more cost-effective than constructing a website. You sign up, create a listing, prepare the inventory and wait. If you're fulfilling orders through a warehouse, just send the items over and they'll take care of the rest. For new and experienced owners alike, this process will be a breeze.
2. You Can Reach More Customers
More than 100 million people use Amazon Prime alone. If you only operate a handful of physical storefronts, you might not be reaching the number of customers you need to. Marketplace could be a way to remedy your problems, as almost everyone has heard of or ordered from Amazon.
Brick-and-mortar stores have their advantages, but they're often less convenient and efficient than online stores. They can also only cater to the people living in the same area they're located in.
3. Unique Products Reign Supreme
If you sell a particularly out-of-the-box item, using Marketplace will give you a leg up on the competition. Customers in need of your goods might not have anywhere to buy them – until now! Since Amazon has distribution centers all around the world, these people will be able to quickly find and purchase your exclusive inventory. This is especially useful if you sell an item that isn't available in many countries.
Cons of the Amazon Marketplace
Before you start listing your products, though, you should still consider the cons that have caused controversy among sellers. They include:
1. Other Sellers Can Hijack Your Listings
This is one of the biggest issues with Marketplace. Companies can create knockoff, counterfeit versions of your products and sell them under your same assigned item numbers. Essentially, when someone tries to sell your product, they can do so without your approval.
Customers will then buy those items, thinking they're from your store. When they receive their purchase in the mail and realize something is off, they leave bad reviews that can harm your brand.
2. Some Say Amazon's Fees are High
If you plan to sell more than 40 items a month, as most businesses do, Amazon charges $39.99 monthly in exchange for using their resources. While this may seem reasonable – Weebly or Wix premium website hosting plans costs about the same – it doesn't stop there.
Amazon bills you for referral fees, variable closing fees and more. They might even require you to pay a per-item selling fee. Oh, and don't forget the shipping, storage and fulfillment fees.
Before you list on Amazon, do the math and figure out if you'll actually make any profit.
3. You Have to Deal with the Customers
Now, this probably won't come as a surprise. If you were operating an online business on your own, you'd have to do the same thing. The difference here is that your success relies solely on how Amazon customers see you. If you don't dedicate the time to replying to questions, resolving issues and refunding faulty products, you'll have a difficult time on Marketplace.
The kicker is that those same customers you just spent hours making happy aren't even technically yours. Amazon owns that relationship – should you decide to break off down the line, you can't market or sell to those same customers.
So, What Should You Do?
It really depends on your business and what you sell.
- Amazon only will only list certain items, so double-check that your products are in the clear before you sign up.
- If you're only looking to sell a few items, you might want to consider eBay, which has a more complicated listing process but lower fees.
- If you want to sell through a website people frequently use and trust, Amazon is a no-brainer. (But plan ahead and know the system!)
It all comes down to your individual situation. Take a step back and consider all these pros and cons prior to making any decisions for your business.
About the Author
Kayla Matthews is a researcher, writer and blogger covering topics related to technology, smart gadgets, the future of work and personal productivity.
Kayla's work has also been featured on Houzz, Dwell, Inman and Curbed. Additionally, her work has appeared on Quartz, PRNewswire, The Week, The Next Web, Lifehacker, Mashable, The Daily Dot, WIRED and others.