Beyond Amazon: Why You Should Become an Ecommerce Merchant, by Patrick Foster, eCommerce entrepreneur, coach & writer. He’s currently writing on EcommerceTips.org, where he shares engaging ecommerce content for entrepreneurs and business owners. All opinions expressed in this article are those of the guest author only.
Amazon is a giant in the world of ecommerce. Every day this gargantuan online retailer puts individual sellers in touch with millions of customers worldwide, doing a lot of heavy lifting in terms of traffic and marketing. For product exposure and sales management, it’s excellent, especially if you’ve optimized your Amazon Seller Central. But as with so many things, there are pros and cons. Online entrepreneurs should be wary of putting their business on the line, and failing to cultivate their own brand.
Reliance is risky
Relying on a single sales channel is a bad idea, particularly online. If something goes wrong, you have nothing to fall back on. If you’re making sales through Amazon and it decides to remove a product category or undercuts you with a similar product of its own, then it’s game over – start again. The best thing you can do is operate through multiple channels, or one that you have control over, i.e. a store of your own.
It’s easy to be lured in by Amazon’s massive audience, but that access comes at a price. Not only is the competition extremely fierce, but you are also bound by their company whims and regulations, which could change at any time. You’ve heard of the phrase ‘don’t put your eggs in one basket’ – this is a perfect opportunity to take heed.
You’re feeding the beast
Be mindful that Amazon exists to benefit Amazon. Its entire business model is designed to reinforce the Amazon brand – the big yellow giant – not that of the seller. This is evident in the way that customers often describe having bought something ‘from Amazon’ – they often do not even realize that the product is being sold by someone else. And why should they? The only indication is the name of the merchant in small writing under the product title. So in reality, Amazon is getting all the credit for the great products you’re selling! And where will the customer go when they need to make a repeat purchase? That’s right – back to Amazon.
Amazon solves the traffic problem in the short term, but what it also does is prevent you from building your own traffic long-term. It’s the crutch that is crippling you. There is no option to personalize and market your own brand, which means you end up competing solely on price – and that’s never good.
Invest in yourself
If you’re serious about running your own ecommerce business, then you need to go beyond the likes of Amazon and eBay. It’s easy to build a professional online store that you can customize to reflect your brand and target audience with unique content, imagery, videos, graphics and other rich media.
Time spent investing in your own brand is never wasted. While your initial traffic will be low, with some strategic marketing you will gradually start to earn a natural following. And when your customers want to make a repeat purchase? They’ll come straight to you.
You need to know your customers
One of the biggest downsides of selling on Amazon is that you don’t get access to your customer base – who they are, what they bought, what they like or their contact details. Amazon keeps all of this valuable information.
From customer analytics you can form all sorts of strategies: promotions, alerts, email lists, tailored advertising, social media campaigns. With your own ecommerce store, you retain all of this goldmine of information, allowing you to follow up with customers, build relationships and generate a loyal band of followers.
Stop fees from eating into your profits
While setting yourself up on a marketplace like Amazon can lead to a wider initial audience and faster sales, it does so at a literal cost – fees. Not only will a professional Amazon account cost you $39.99 a month, but you will also pay referral fees of between 8-15 percent on each sale you make on top of that. The fee percentage varies between categories – for jewelry the referral fee can be as high as 20 percent. For this reason, when you start selling products on a marketplace such as Amazon, it’s important to consider your profit margins and work out how seriously these fees will impact your profits. In some cases, the net profit may not be significant enough to make paying fees worthwhile.
By contrast, when you set up your own website, you will pay for the domain and web hosting, but the profits from any sales you make are all yours – no-one else takes a cut.
Reach profitable niches
Amazon is a giant no doubt, but they don’t totally monopolize the market. If you only stick with Amazon you could be missing out on targeting very profitable niches. Reach those niches with your own website, funded by your own advertising/marketing campaigns, and – unlike selling on Amazon – you will keep 100 percent of the profits. What’s the point in spending money advertising your Amazon listings? You are simply fueling their brand, when you should be backing yours.
Good places to advertise your ecommerce business include social media channels such as Facebook, Instagram and Pinterest, as well as through Google Shopping and PPC. Another long-term but highly important consideration is optimizing your store for SEO, so that you can start showing up in organic search results.
Implement helpful features
One thing is for sure: you get a hell of a lot more features to play with when you opt for an online store. It’s these features that are going to help you stand out in the crowded world of ecommerce.
- Online blog – A well-written blog linked to your store is a great way to bring in traffic and say more about your product and its wider context. Blogs add value to your website and generate more sales by positioning you as a knowledgeable vendor
- Apps and plugins – There is a wide range of interesting ways to improve your site through apps and plugins, with options available for all sorts of capabilities, from SEO and social to accounting and dropshipping – the world is your oyster
- Selling via Facebook, Pinterest and Twitter – With an online store you have the option to make use of features that allow you to sell your products directly through social media stores, making it easier for customers who find you there to buy straight away, with no hassle
Access the B2B market
By running an online store exclusively on Amazon, you could be missing out on a huge potential market – B2B buyers. Business customers are increasingly turning to online stores for their purchases, but here’s the thing – they want quality. As a result, B2B customers rarely buy their goods from Amazon, because as we all know, the quality can vary widely from one vendor to the next. B2B shoppers prefer to buy from a business they trust, and the best thing about them is that they buy consistently and in bulk. They are the holy grail of customers – the ones who keep coming back.
To harness B2B sales, a professional online store is essential. Treat all of your customers well, but give these guys extra special service because once they like and trust you, you have a customer for life.
Take control of presentation
Last but not least, let’s consider the logistical limitations of selling through Amazon. Amazon’s procedures are very formulaic. If you want to sell a product that needs some special care or that requires personalizing in some way, it’s very hard to do this through Amazon because its warehouse doesn’t offer these specialist services.
Likewise, there are limitations with the product listings too. Amazon requires you to list your products according to their own format. That means no room for customization, no room for additional media such as video, and no brand recognition. It’s not surprising that customers don’t realize they are buying from individual sellers.
With your own website, you have full control over how a product is presented. If you want to add lots of images and videos, include reviews, add buttons, use your own branding and connect personally with your customers, all of this is made possible with your own store, where the limitations of Amazon’s self-interest don’t apply.
Selling through Amazon can be a good short-term solution if you’re looking to make some quick sales while you build an audience. But the problem lies in dependence – if you always rely on their power, you will never create it for yourself. Starting your own ecommerce store is a long-term project that takes a little more time and thought than selling through Amazon, but the end result is far more rewarding.
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