Are you going to join the Amazon bandwagon or not?

Article by Steven Visic, Director - Smartsend

You’ve probably seen a lot of articles in the media this year about Amazon’s imminent arrival in Australia.  Most of the articles seem to be by Amazon partners or affiliates promoting their wares (while promoting Amazon’s) and scare mongering you into thinking your business will crumble if you’re not part of the Amazon phenomenon.

Amazon is extremely alluring and enticing and you can open your business up to a huge potential marketplace.  There are plenty of workshops, experts and webinars sprucing the virtues of an Amazon business and endless riches (some of these people have created their own industry by just promoting Amazon).

Every business is different however with their own objectives, products profile and financial concerns.  What I can tell you is you can still succeed if you decide Amazon is not for you.

After talking to a friend recently and subsequently googling ‘Amazon merchant horror stories’ I’ve found another side to the Amazon story you won’t hear too much about.  Reading these websites and forums paints some off colour merchant experiences on the Amazon rainbow:

Amazon can ban you at any time

This can be due to circumstances beyond your control.  It’s difficult to dispute the ban with merchants quite often having to deal with an automated response system rather than human beings.  Some merchants claim they have been banned for as little as 3 or 4 bad reviews (e.g. late deliveries, too many returns, etc) even after thousands of positive transactions.

You don’t own the platform

You can’t re-market to buyers as they’re not your customer.  This makes it difficult to build customer loyalty.  If the same customer wants to buy on Amazon again, you’re reliant and hoping you will appear highly in search results on Amazon to get their business.

You don’t own the brand

If you sell solely on Amazon, in many cases you don’t own your own brand (unless you have spend significant funds on trademarks).  Stories abound about unscrupulous sellers and copy cats that will blatantly copy your images, products and listing descriptions and there isn’t much you can do about it.

Amazon has a history of hijacking niche products

According to some merchants, if you sell niche products Amazon uses you as a guinea pig.  If your niche product sells well on their platform they will end up selling the same product, competing directly against you and at a cheaper price (aka. Amazon private label).

For the privilege of accessing the Amazon marketplace and it’s tremendous opportunities you also need to factor in their numerous fees (see sellercentral.amazon.com for all fees):

·        Monthly Subscription Fee

·        Per Item Selling Fees

·        FBA/Shipping Fees

·        Referral Fees – from 6% to 20% per item sold (the average seems to be around 15%)

If after digesting all this, you decide Amazon is not for you, you will still need to shore up your offering to ensure you can compete:

SEO, Marketing, Social: 

Review this as a priority, particularly social and also investigate ‘Influencers’ (give Scrunch.com a look).

Multi-Channel eCommerce: 

If you’re not already, look at selling your products on many platforms at the same time (e.g. eBay, Facebook, Instagram, etc) via a multi-channel platform.  I’ve written an article previously on why we recommend Shopify as the No. 1 multi-channel eCommerce platform.  This way you’re diversifying your presence, brand and reach across many marketplaces.

Shipping Solution: 

Get your shipping in order and fast.  Ensure you work with a trusted provider that offers you:

·        Competitive shipping prices,

·        An extensive range of services (Road, Air, International),

·        Will take care of your Customer Service when a delivery goes awry,

·        Shipping API’s, plugins, apps for your webstore to help streamline your shipping, efficiently fulfill orders and ship them and can provide your customer’s with transparent tracking options.

You need to offer your customers the best possible shipping options to enable you to compete with Amazon’s services.

Shipping for eCommerce is our area of expertise!  Should you require further information please visit www.smartsend.com.au