Getting A Store On Amazon: The Good And The Bad

Regardless of the market you are in, most discussions in online business eventually find their way back to Google. Considering its massive market share in search traffic, most businesses cannot survive without finding a way to get a piece of the Google traffic pie. This is especially true for every eCommerce store other than Amazon.

As such, most start up eCommerce stores would do well to focus less on Google, and more on how to get a shop onto Amazon. Google traffic should still be part of the plan, but in many cases, working with Amazon will have a higher return on investment.

While not usually the case, there are times when putting a store on Amazon is not the best plan. Below are some points on how to get a shop on Amazon, and how to tell whether it is a good idea for your business or not.

How To Get A Store On Amazon

Getting onto Amazon is fairly easy. The established brands and the smaller operations alike can simply go to the seller product page to sign up.

Smaller sellers, those planning on selling less than 40 items per month, can sign up and pay seller’s fees and a $.99 per transaction fee to amazon. There is also a 15% commission paid to Amazon on each sale, which is about double the rate paid to affiliates who refer sales buyers to Amazon.

Those running a bigger operation with more volume have their regular fees, but no transaction fee. There is also a $39.99 cost per month to do business.

In both cases, Amazon allows sellers to use their 1-click checkout program, fraud protection, and to piggyback on Amazon’s respected brand name.

Looking At Cost As A Factor

The above fee estimates may not look like much, but 15% of every sale is fairly large. For a smaller vendor who is selling on Amazon through low volume, occasionally even one-off transactions, this is a major blow to their profit margins.

Large volume sellers who have a steady supply of products available at wholesale pricing may not feel that the fee schedule is quite as severe.

It is fair to say that the smaller, start up eCommerce business owners will only get a high enough return if they are selling products that have a high profit margin. Obviously, this would need to exceed the 15%+ that Amazon will take for most products.

Making The Most Of Amazon… For A While

There are very few sellers that will want to continue on Amazon. Eventualy, they will want to get to work building their own brand that can stand on its own, away from Amazon.

However, there is one important factor that may make some sellers want to stick with Amazon in some capacity, even after their own stores find success. That is the ability to have Amazon fulfill your orders for you.

In some cases, if there are products Amazon carries, they can fulfill your orders. The profit is impacted by higher fees, but it may be worth it.

When supply chain interruptions occur, having Amazon take over the fulfillment process may be crucial to staying in business. Again, the small vendor isn’t likely to need or want this service, but it is something to consider in some niches.

Move Out When You Can

Finally, it is important for eCommerce operators to get out on their own quickly. Placing a shop on Amazon can help to provide some level of income and security while you build your own brand. Amazon is a great safety net, but it is no substitute for your own store.

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