Amazon - Who does it work for?

The retail marketplace giant can help you sell your stuff, but should you use it?

Amazon is a household name for a reason. It’s one of the biggest omni-channel companies in the world, offering millions of items from millions of sellers. For customers, it’s fast, usually cheap (or at least with a variety of prices) and straightforward. For merchants, it’s a chance to get amongst the competition and put your products where customers are searching for them.

Shopify merchants can sell on Amazon using the Amazon Sales Channel. That means your inventory, product descriptions and pricing is transferred seamlessly to an Amazon store. To do this, you add the sales channel through your Shopify Admin, and create an Amazon business account.

The pros of selling on Amazon

You’re selling where people are looking

Amazon is selling to nearly 184 million users every month. Yes, that’s a lot of people. It’s way more than even the next closest, Ebay, at 96 million users. Such high traffic means that Amazon is the go-to first place people look to when they’re interested in buying something online.

Great for niche companies

That’s especially helpful for companies that sell niche products, who might need to cast a wider net in order to attract enough customers. Though your website itself may not get the volume you need, an Amazon account can help put you on the map.

They can deal with fulfillment, including international shipping

One of the biggest advantages of selling through Amazon is that even if you’re not ready to roll out a huge international enterprise, they definitely are. Amazon Fulfillment is a service they offer where you send them a bulk shipment of your items, and they’ll take care of everything else including selling, processing and shipping the item. They take a larger cut than if you did it yourself, but it lets you get things shipped through Amazon Prime and sell internationally without a headache.

Get exposure for future repeat customers

Ok, you don’t love the idea of selling on Amazon because they’re taking some of your profits. But, Amazon could provide a powerful chance to get first-time buyers for your brand. After that, you can provide incentives to shop directly from you in the future.

Business to Business capability

Amazon offers a chance to attract retail customers - but it’s also a major site for businesses looking for supplies. They’ve got a whole set of features that are meant to help B2B sales, such as tiered and wholesale pricing, B2B-only offers, and credential displays.

And the cons…

The fees

You’re selling through another service, and they’re taking a cut. Fees on Amazon are taken as a per-item fee for small-scale business (less than 35 items a month) or as a monthly rate for over 35 sales a month.

This makes it particularly difficult for commodity-based companies, or companies that are running low profit margins on each item. Those kinds of companies are probably trying to minimise costs as much as possible, and might do better trying to sell directly.

It’s a marketplace, so there’s no hiding from the competition

If your products are fairly similar to the competition’s, Amazon may make it impossible to sell at your normal rate. Because it’s a marketplace, information about products and pricing is highly transparent. That means the second there’s a cheaper version of your product on Amazon, it will sit right next to yours and could deter customers. Amazon has a built-in comparison feature that pits you right next to your competitor, for better or worse.

Getting off-brand

If your brand is super important to you, and you’ve built a website and store that’s unique, selling on Amazon can detract from it. That’s because you won’t be able to create the same user experience, customer service options, and customisation you’ve done on your in-house website. Instead, Amazon focuses solely on your products, without much room for things like dynamic landing pages, specialised packaging and user-generated content.

More channels, more admin

Although Shopify streamlines your inventory to sync directly with Amazon, there’s only so much it can do to streamline customer issues. The more sales channels you have, the more juggling you’ll have to do with speaking to customers on multiple platforms and dealing with customer service issues across your company. Find some tips for dealing with multi-channel customer support here.

So how do I find out if it’s right for me?

Think about where your customers are

Your main target audience might have different preferences for where they shop. While Amazon is a household name, there are loads of other sales channels that might be more effective. For example, if you sell niche items to young adults, putting your products on Buzzfeed or Kik might be more effective. If the vast majority of your traffic comes from Facebook, having a Facebook Shop might be better than an Amazon one.

Think about where your competition is

You also need to think about where your competitors are selling. If they’re all on Amazon, you might be missing out quite a lot by being MIA from the channel. At the same time, if none of them are on Amazon, you could be breaking into a new market and stay ahead of the game by opening up that sales channel. Map out where the main sales channels are for your industry, and look for new opportunities to grab an audience.

Measure how your channels are stacking up

Shopify lets you see exactly where your business is coming from. The most surefire way to find out if Amazon is an effective sales channel for you is to look at the data. Try opening up an Amazon sales channel, pushing some PR toward it, and seeing if you’re getting an uptick in sales from it on your Shopify Report. If after a while you’re finding that you’re losing money by selling on Amazon because of the fees, it’s time to close.

Here’s a little summary, but remember these are not hard and fast rules. Think about what your business really needs, measure how it’s going, and do what works for you.

What’s up with your business?	Should you sell on Amazon?
Just starting out and need more traffic	Yes
Sell very niche products that don’t have a wide audience in my area	Yes
Want to sell internationally, but don’t have the capaity to	Yes
Have a highly branded company that focuses on being an independent business	Probably not. Look at this option instead.
Make very low margins per sale	Might not be worth it

What are some other sales channel options I have?

There are loads of sales channels you can use in conjunction with your online store. Besides Amazon, you can sell directly on Ebay, Pinterest, Facebook, Twitter, Wish, Kik, Buzzfeed, and basically anywhere else on the internet that you think your customers are.

Elkfox can help you expand your online business, reach new audiences, and make a Shopify store that grows the way you want it to. Talk to us about using multiple sales channels today.