Over 2 million sellers have flocked to Amazon in hopes of turning a profit. Now, if you were a lemming, you would set up shop immediately on the assumption that all of those people couldn’t be wrong. But as a savvy businessperson, you’ve decided to ask a critical question first: Just what are the benefits of selling on Amazon?
The answers depend on whether you’re selling things that somebody else has made (such as wholesale goods or the junk from your basement) or trying to sell a product of your own.
Search for just about any product on Google. Type in “Harry Potter and the Sorcerer’s Stone,” “buy furniture online,” or even something as basic as “toys” and Amazon will show up on the first page. It’s like the Wikipedia of shopping.
When you build your own ecommerce website, you have to fight your way to the top of the search engine rankings. This takes months of hard work and there are no guarantees. Putting your product on Amazon gives you excellent odds of showing up on Google right away.
Designing, building, testing, and maintaining a website of your own can easily cost thousands of dollars every year. Amazon allows you to start making money without taking those risks first.
Consumers place a high level of trust in Amazon. Search for something like “trust Craigslist,” on the other hand, and the results don’t seem quite as reassuring. Trying to sell on less heavily-monitored websites like that, or on your own website, means you have to work much harder to convince the customer you’re not ripping them off.
If you’re selling a product on Amazon and you don’t have a ton of negative reviews already, most visitors will automatically trust you to deliver the product. That level of confidence is invaluable.
Amazon ranked as the 12th largest retailer in the world in 2014. By the time 2015 rolled around, its global earnings had increased from $77.55 billion to $83.39 billion. Its revenues were higher than Best Buy’s and Macy’s combined.
Would you say no to having your products sold by a retailer with the distribution of Rite Aid or Sears? No? Amazon generates more than three times the revenue of either of those retailers.
That massive level of exposure may be the best of the advantages of selling on Amazon.
While there are other fees and costs to consider, Amazon still takes a much smaller percentage than a traditional retailer. That means you can offer your product for a more competitive price—or take home a bigger slice of the pie.
You don’t have to sell only on Amazon. Building a sales record online proves that customers will pay for your product and makes it attractive to traditional retailers. That way, you can finally take your mom to a store, show her your product on the shelves, and convince her that yes, you run a real business.
No company is perfect, and we don’t want to say that you’ll never have any problems with Amazon. Some of the challenges you might face include:
Amazon won’t work for every business, but it’s enormously helpful for the vast majority. Here are a couple more points that we saved for the very end:
We believe that the benefits of selling on Amazon far outweigh the disadvantages. It’s a low-risk way to get your business off the ground or to start making more sales quickly. If it sounds like a good deal to you, learn how to sell on Amazon or dive right in!