There’s no denying that Jeff Bezos struck gold when he started Amazon in 1994. Even though the company didn’t start selling everything from towels to pet food until 2000, once that decision was made, there was no stopping the company’s growth. Even twenty years later, Amazon is a thriving online marketplace bustling with activity and bursting with profit.
Millions of people are choosing Amazon over brick-and-mortar shopping, and it’s not just about the convenience of online shopping, either. Consumers choose Amazon because it is familiar and trustworthy, with a great reputation. So, what are the pros and cons of selling on Amazon for agencies and small businesses?
Benefit: Amazon’s Excellent Reputation
Whether you own a small company or you are a full-blown Amazon agency, you know this market giant is arguably the most well-known platform for shopping in the world. No consumer wants to risk spending money at an online store they’ve never heard of before- especially if they have to input their precious financial information. Many people express discomfort when faced with the option of buying from an online retailer that no one in their social circle has heard of. As a result, it can be hard to build a reputation in online retail.
However, when working with Amazon, this lack of trust is no longer an issue. The widespread credibility that comes from selling on Amazon means that turning a significant profit is much more likely than it would otherwise be.
Benefit: Fulfillment By Amazon
Amazon FBA is a service helping sellers with the storage, packaging, and shipping of their products. By becoming an Amazon seller, you can gain access to an Amazon fulfilment centre that will store, package, and ship your products without you having to do any of the heavy lifting- physically or metaphorically.
By becoming an Amazon agency or seller, you have the ability to make use of over 175 fulfilment centres around the world. Not only this, but Amazon’s worldwide shipping allows you to reach a far wider audience than any other online marketplace. With Amazon FBA, shipping is no longer your responsibility- meaning a large part of how customers view your business is not in your hands, but it is all up to Amazon- who have more than proven their capability when it comes to quickly delivering items.
Cost: Amazon Service Fees
With access to over 200 million customers worldwide, most businesses are willing to do whatever it takes to partner with Amazon. It can be quite expensive to sell on Amazon; however, there is some flexibility available to you:
Amazon’s individual plan comes with a cost of $0.99 per item sold. This could be a good place to start to test the waters but can be more expensive than the alternative if you sell more than 40 items per month.
Amazon’s professional plan is $39.99 per month, which is ideal for established businesses who are looking to rank highly on product detail pages and who are certain they will sell more than 40 items per month.
On top of these plans, there is a referral fee for every item you sell. The cost of the fee will vary depending on the item sold. In addition, advertising fees on the platform are also costly- even if they do give your brand a boost in product listings.
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