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?
PROS-
- 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.
CONS –
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?
Check out my other recent posts –
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Congratulations on your business anniversary! That’s quite an accomplishment, especially in these chaotic times. Great advice here! 🙌🏾🎉
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Thank you so much. ❤️
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I love this series idea, can’t wait to hear more! You’re such a business goddess!! I try to avoid Amazon at all
costs bc they’re so evil. However I’m kind of a hypocrite bc I shop at Whole Foods 😕 And I have a Kindle 😕 But none of those cons surprise me since Amazon is the most capitalist animal on the globe I’d say. And I love that you’re mostly selling from your website. Is Etsy a possibility? I love shopping on Etsy and would totally buy from there before I bought anything from Amazon!
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That’s okay – I shop from Amazon too when I need something urgently. But trying to cut down on my spends on Amazon.
Etsy isn’t big in India yet, but I’m definitely going to look into it. ❤️
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You’re so awesome for becoming an entrepreneur! I can see why it’s difficult. I would hate having Amazon take some of my profits and having so much competition.
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Thank you so much. ☺️
Yes!! Also, since there are so many sellers they don’t really care about one small business’ bad experience. We’re not significant to them.
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That’s saddening to hear 😕
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Congratulations on one year with your business! I love how you’re so honest about selling on Amazon. I have heard with authors that the general advice is don’t publish through Amazon. They really rip authors off as well. It’s disgusting how bad it is for sellers. This is why I only use Amazon in a pinch
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Thank you. ☺️
Selling on Amazon has been so frustrating!!!! I’ve had some really bad experiences.
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wow, congratulations Rue and good for you during a time when many would have not reached out and launched!💖💖🌻👏
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Thank you so much. ☺️
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You’re so welcome!1💖💖🌻
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I love watching anyone chase their dream. You must feel a great deal of pride in coming this far.
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I do shop on Amazon, but I try not to, or at the very least, as a last resort. I try to support smaller businesses directly. Congrats on your anniversary.
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Moksha! So great to see the gritty, honest side of the small business world! I love seeing behind-the-scenes stuff and I never would have thought of any of this when thinking about running a small business! There really are so many small details you have to figure and work out!
I don’t do much shopping on Amazon, I prefer to support small businesses whenever I can but you’re right, they do make it easy for their customers… *sigh
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A whole Entrepreneur
You have worked hard to establish your business. This should be a win for you. Congratulations on your milestone
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Thanks for sharing!
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Thanks for reading 🙂
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Great advice, thanks!
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Hello there,
Congratulation on your first year in business! I really admire people who run their own business. Unfortunately, I am one of those people who use amazon, mainly for my kindle, some shopping and amazon prime as I did not have a TV before. I too am trying to cut down on shopping.
I must say your explanation of amazon just really opened my eyes! So much we, customers, don’t really know about the things you mentioned. I surely did not. Thank you very much, I really enjoy reading it and will return for more. 🙂
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congratulation
i am trying to start amazon online arbitrage next month.
and absolulty you were right to discuss pros and cons
at some point we have to compromise
but the best thing is the system works for you even when you are slleping.
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