The pros of selling on Amazon
The ability to make more sales on Amazon is no-brainer. As mentioned earlier, Amazon is attracting millions of visitors on a daily basis. On the other hand, Amazon has got over 300 million different active customer accounts. In addition to that, more than 170 million unique visitors are coming to Amazon on a monthly basis. All these customers are contributing towards the $100 billion revenue that Amazon makes. Therefore, you are exposed to a variety of opportunities on Amazon and you will be able to get the most out of your selling efforts. In other words, you can make more sales and increase your profits with minimum hassle.
- Reduced marketing expenses.
To begin analyzing the pros and cons of doing business with Amazon, let’s take a look at marketing. When you start your own online store, you will have to invest heavily on marketing. The traditional marketing methods will not help you to cover up even the operational expenses of the store. However, you don’t have to spend any money at all when you are selling on Amazon. That’s because Amazon is a well-known marketplace in the internet and it is attracting millions of visitors on a daily basis. You will not be able to find anyone who questions “What is Amazon” as everyone is aware of what it offers. When you start selling on Amazon, you can easily grab the attention of them towards the products that you sell.
Without any significant marketing efforts, you will be able to sell your products on Amazon. However, you must also keep in mind that the number of sales you can make depends on the demand that is available for that product. Regardless of that, you can make sure that you are only spending very little on Amazon and you will be able to receive outstanding results at the end of the day.
- You choose the method of sale and build your business in the most convenient way.
You can sell on Amazon using dropshipping, introducing your own brand, selling as retail arbitrage and using other business development strategies.
Choose the best option that fits your business needs. And Amazon will help you make it profitable due to the wide coverage of customers and convenient access to many tools to manage your mini-store on Amazon.
- You can sell almost any product you want.
On Amazon, there are very few restrictions on what you can sell and what not. Therefore, you can start your business selling gymnastic ropes or offering customers large household appliances. Just follow the rules of the marketplace, and your sales will bring the first profit very soon.
- You can easily track the status of orders, the number of items and other important indicators.
Personal account is your convenient workplace where you can find a lot of useful information: how many goods were sold, how many of them are in stock, find out the status of a specific order, view reviews, evaluate product ratings and do much more.
- You don’t have to keep a stock.
Amazon has got more than 100 different fulfilment centers around the world. Therefore, it is possible for you to ship out all the products you sell in bulk to Amazon. Then Amazon will take appropriate measures to store those products in the inventory centers. When you make an order, Amazon will take care of packaging and shipping as well. This can also provide you with peace of mind. That’s because you know the pain and frustration that you have to go through when you are packaging the products and shipping them to the customers.
You will be able to stay away from a lot of overheads when you start selling on Amazon. Hence, it is something that you must consider. When you are taking a look at the advantages and disadvantages of selling on Amazon, this is something you shouldn’t ignore.
- You shift the solution to problems with orders on Amazon.
Amazon handles customer calls, deals with returns and keeps in touch with the customer. Night calls from concerned customers will be a thing of the past.
- You have the opportunity to expand internationally.
The ability to expand internationally can also be considered as another major benefit that selling on Amazon can provide you with. Amazon is one of the most popular and trusted brands across the world. Therefore, it is possible for you to start selling the product you have in many different markets.
If you are a retailer, who is looking forward to test whether your product would fit the global audience or not, you can get started with Amazon. You just need to create a listing on Amazon local marketplaces. When you start selling, you don’t need to worry about the local operations, logistics and payment methods. You just need to focus on selling and Amazon will take care of the rest.
Cons of selling on Amazon
- You will have to pay hefty commissions.
Even though Amazon provides you with a large number of opportunities, they don’t just come for free. You will have to pay hefty commissions from every sale that you make on the platform. The specific commission percentage that you have to pay on Amazon depends on the category that you are selling the products. However, you should expect to pay a commission in between 8% to 15% for the sales that you are making on Amazon. This is not a small percentage to ignore.
- You will be exposed to a high competition.
There is a high competition in Amazon as well. In fact, the competition that you can experience in Amazon is fierce. If you are not backed up with a long term strategy, you will not be able to get any positive results from the selling efforts on Amazon.
When multiple sellers on Amazon start selling the same product, Amazon would determine the best fit. This can further increase the competition. Therefore, you will need to have an appropriate strategy, which can help you to make more sales on Amazon.
- You will need to manage your orders.
If you decide to sell your products on multiple Amazon marketplaces, you will need to think about syncing the orders. In fact, you need to make sure that all Amazon orders are taken directly into your system and you update it constantly via the central order management system. You will have to spend a considerable amount of time to work on this as well. It will take many hours, especially if you are selling hundreds and thousands of products on the online marketplace.
- You do not have access to personal information about customers.
Amazon does not allow you to directly communicate with customers. This limits your ability to expand your business, since you cannot build a full-fledged relationship with a client. Such a system makes it impossible to personal approach to each customer, so it will be difficult to be the best for each of them.
- You must monitor the health of your account and keep it normal.
Amazon rules clearly define which account metrics should be normal and which metrics should be there (late shipment rate, order defect rate, cancellation rate, etc.). To meet all the criteria is very difficult. This will require constant hard work from you.
- Your activity is constantly monitored.
The appearance of the listing, performance indicators, correspondence with the client - Amazon controls absolutely everything. Therefore, at the slightest violation of the rules of conduct (and they are quite tough) your account can simply block.
Now you have a clear idea about the pros and cons of selling on Amazon. By going through these pros and cons, you will be able to understand if selling on Amazon is a good idea to consider or not. If you are interested in selling on Amazon and if you are not too worried about the cons, you are encouraged to go ahead with it and experience the benefits that come on your way.