Amazon is one of the largest online marketplaces, with over 310 million users globally as of 2022. The majority of these are in the United States. This large market presents tons of sales opportunities for your online business.
With such large numbers, you would think all eCommerce owners would be keen on selling on the platform. But, that is not the case. Fewer eCommerce businesses use their websites as their main marketplace instead. Why?
Even though the Amazon marketplace has massive potential for businesses, many are not convinced, and with good reason. Here is a detailed comparison of the two options. We present the upsides and downsides of using Amazon vs. your own site as the main marketplace.
Pros of Selling on Amazon
Potential for high sales
Amazon offers you a large platform and market to generate sales from your store. It should be automatic if you play by their rules and guidelines. Their system is excellent at ensuring your products show up in the most appropriate categories for users to find. They have also made huge investments into paid Google search, which will help in advertising.
Furthermore, the market is constant. For instance, Amazon US receives over 190 million unique monthly users. So, there is room to reach large audiences.
Since it is international, Amazon’s marketplace exposes you to audiences beyond your geographical location. There is always the option of international shipping. So, if you play your cards right, you can expand your store’s reach to other parts of the world.
Lower competition with brands
Often, people shopping on generic online marketplaces are not looking for specific brands but specific products. So, using Amazon increases your chances of being found without the pressure of other brands, and customers become more likely to buy from you based on your product value.
Cons of Selling on Amazon
One of the biggest issues you will face with Amazon is the competition. Since it is a large marketplace, you can trust that there are thousands of similar businesses to compete with. So, it can be hard to break through for a newcomer without many reviews.
“There’s already a lot of mattresses on Amazon. So it is easy to get lost in the noise. I think our website does better at getting the big sales through for Mattressnextday,” says Martin Seeley.
As you would expect, hosting your store on Amazon would require you to abide by their rules. Failure to do so would get you banned and your products removed without much explanation. Furthermore, the platform focuses on the products, which can be limiting since you cannot fully show your brand’s meaning.
“It’s just too limiting,” says Caitlyn Parish, who runs Cicinia. “Amazon just doesn’t allow us to give customers the best feel of our dresses and fabrics, so they are often more amazed when they come to the site.”
Being a third-party platform, you can expect that selling on Amazon will cost you quite a bit in fees. These apply whether you use the Fulfilled by Amazon (FBA) option or run your store account. For example, you’ll have to pay $0.99/item sold on an individual plan. For professionals, that goes up to $40.
Pros of Selling on Your Site
You have more control.
With your website, you can do whatever you want and control all the content, design, pricing, branding, etc. So it gives you more freedom to express your brand and set your terms of operation. As such, you also don’t need to worry about getting banned because of rules you had no clue about.
There’s a focus on your product.
You are just one of many other businesses selling that product on the Amazon marketplace. So, it is easy to get lost in the noise. But on your website, your product is center stage, and customers are not distracted by other offers.
Many business owners agree that it can be hard to stand out on Amazon without being extremely cheap. For example, Edward Wright, who runs an eCommerce store for cereal, states, “It was almost impossible to get a sale in the early days from organic search unless the customers were looking for you specifically. “
Helps in brand building
Customers who buy from your site can always leave reviews and refer others to you. These help you create an excellent online brand image. That is not the case when they buy from you on a marketplace since they will almost always state the marketplace’s name when referring to others.
Cons of Selling on Own Site:
Lower market base
Unless you are a big brand name, selling on your website will tremendously lower your market reach. Only people that know about you will buy from you, and you’ll have less visibility. We had a hard time driving enough traffic to our site in the early days because nobody except family and friends even knew who we were. So, you miss out on the audience you could reach locally and globally.
Established marketplaces have more trust with buyers than personal sites. And buyers know that they have avenues to seek help if anything goes wrong. This assurance makes them more likely to buy from those places than your site. So, you could be losing lots of potential customers.
High maintenance costs
While selling on your site offers you control, it also puts all maintenance costs on you. Any technical issue that arises is for you and your developers to handle. And if you do not have plenty of resources like marketplaces, you can get stuck.
Selling on Amazon remains the more popular and cost-effective option for eCommerce businesses. However, selling directly on your website also brings massive advantages, especially with fees and control. Amazon’s delivery times also remain unmatched, making buyers more likely to shop from the marketplace.
The good news is that you do not have to decide to use one over the other. You can run your online store on your site and also have an Amazon page. With this method, you can enjoy the high reach and quick deliveries Amazon allows while maintaining brand control.
Justina Blakeney of Niawigs testifies that “the Amazon store has earned us many first-time customers who become our regulars and keep buying from the site.”
Furthermore, you always have the option to place website links within your Amazon store to drive more traffic to your site. Many brands opt to give Amazon customers discounts to buy directly from the website, which generates higher traffic in the long run.
Nonetheless, whether to focus more sales attention on Amazon than on your website depends on your specific business.
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