I started my small business a year back. Yes, it is going to be a whole year since I launched my own brand of sustainable products. The journey hasn’t been the easiest especially thanks to COVID. India went into a lockdown 10 days into me launching my brand – so you know it’s been rough. But through the year I’ve learnt so much from designing my own website to marketing to social media management to vendor management – it’s just been an upward learning curve. The few posts that I have done in the past about running a small business generated interest in a lot of new readers. So I’ve decided to start a series revolving around my advice to other people planning to start their own small businesses. I hope that this will be a bi-monthly series where I’ll pick up varied topics and share my learnings from the past year. Am I a business guru? No. But I am a hard-working, small business owner and I hope my advice will be useful to at least a few people.
The first topic of this series had to be ‘selling on Amazon’. Amazon is omnipresent. Some people love it and some people don’t but overall Amazon has changed how the world shops. Amazon has made shopping from home so convenient. On the seller side, Amazon has also given a platform to a lot of sellers to be able to showcase their products to a wider audience from the ease of their own locations. So what are the pros and cons of selling on Amazon?
- Reach out to millions of customers – For small businesses that are starting off with a small budget, Amazon provides an amazing platform to be able to reach out to millions of customers.
- Easy shipping – since, Amazon has a logistics company that handles shipping – once you pack your orders, it is easy to ship your orders using their services.
- Cheaper shipping – since Amazon ships lakhs of shipments everyday, their shipping costs are lower and inturn charge the seller a nominal shipping price.
- Easy setting up in comparison to setting up own website – Amazon already has a fixed format for products so it isn’t all that difficult to upload your products.
- Vendor helpline – they have round the clock helpline services available for their vendors – are they always helpful? No but most of the times you can get your query resolved.
To be honest, I find selling on Amazon painful, and here’s why –
- Very bad seller policies – All of Amazon’s policies revolve around protecting the customer which can often throw the seller under the bus. We’ve had cases were the customer received our product claimed that we sent them an old booka and literally sent back a book from their home with their name on it and got a FULL refund from Amazon. In return, we have to jump through hoops to get us a refund from Amazon. For bigger companies these smaller loses may not matter but for small businesses they do.
- Too many sellers – Unless your product is extremely unique, it is very likely that you’ll be competing with hundreds of other similar products to catch a customer’s attention.
- Amazon buy box – So when you add a new product on Amazon, Amazon doesn’t show it as a normal product because you need to win the ‘buy box’ – meaning a customer will have to go into the product and look through the sellers (you must have seen products that say “available from these sellers”) and then only be able to order your product. Till you don’t get a few reviews, you don’t get to win the buy box. This absolutely doesn’t make sense to me.
- People may get confused – recently a friend ordered products from Amazon thinking it was from my brand but turned out to be from a competing brand with similar products. With so many sellers even people trying to repurchase your rpoducts might end up ordering from some other brand.
- High commissions – For every sale, Amazon gets a listing price and a commission of that sale which can go as high as 30-40% in some categories.
- Returns and refunds – If a product is damaged during return, it is another task to get Amazon to refund you for the broken product.
- Marketing costs are high – Marketing costs are very high with very low returns. The few times I tried marketing on Amazon, I didn’t get a single sale. I’d recommend marketing on Instagram instead.
- One bad customer review can impact your sales – If you get one bad review or rating, it could lead to a drop in your sales.
Overall – I am not a fan of selling on Amazon. In fact, out of our 70+ products I’ve only listed 5 on Amazon, the rest are sold through our website (and we are working to list with some other platforms). But if you are newly starting out and want a platform with a lot of customers, I definitely recommend listing on Amazon till you figure out other platforms that work better for you.
What are your thoughts on Amazon? Do you shop from Amazon?
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