Selling on Amazon – Pros & Cons – Facts – Alternatives

Every every day, Amazon sends out roughly 1.6 million deliveries. That is 1.85 orders each second, or 66,000 orders per order. If you run an internet business, consider that.

Adding an Amazon link to your products is a simple method to boost sales and retire somewhere warm, sipping a refreshing drink under an umbrella. It is not, however, as simple as all the social media gurus would have you believe.

Here is a summary of the various benefits and drawbacks of selling on Amazon.

Amazon Marketplace Overview

Facts

Just in September of 2019, there were more than 150.6 million mobile users on the Amazon app. Millions of users who browse the newest footwear, technology, and pet supplies on their PCs, laptops, and Macs are not included in this.

Across the globe, Amazon sends more than 45 million items to more than 100 nations and areas. This is because there are already more than 1.9 million sellers offering goods in every imaginable business field.

The US was Amazon’s largest market in 2021, accounting for $314 billion in net sales overall. The UK came in second with $31.9 billion, followed by Germany in second place with $37.3 billion.

Amazon Marketplace

Global Trends

This business has an amazing reach. The annual revenue has revolutionized the global market and is greater than the gross domestic product of the majority of nations.

Almost anywhere you go on vacation, you can access Amazon and order things to be delivered to your hotel, Airbnb, hostel, or wherever you are.

Selling on Amazon Fees Breakdown

Individual and professional selling plans are the two sorts of selling options for Amazon eCommerce. Users that sell fewer than 40 products each month should select the individual seller plan, which costs $0.99 per item sold. The $39.99 monthly flat fee for the pro plan, is intended for larger shops.

Depending on the type of item and whether you are sending it domestically or abroad, there are additional shipping costs. For instance, a domestic book shipment with a typical delivery schedule of 4–14 days will cost $3.99 in shipping.

The category fee is a sometimes forgotten cost when determining whether selling on Amazon is worthwhile. The amount below represents a portion of the overall cost for things like shipping, handling, gift-wrapping, and similar services. Expect to pay an 8% category referral fee, or at least $0.30, if you wish to sell a new camera.

Use the automated Amazon Revenue Calculator found here to quickly determine how much your fees will be once you make a sale. You can define a new product or enter an existing one, and the algorithm will handle the work.

The Pros of Selling on Amazon

Even with the various fee structures, selling on Amazon has many advantages. This is the most well-known online marketplace, making it the ideal location to find clients. The following are some additional benefits:

Public Trust

Customers have been using Amazon for years for a variety of things, including last-minute birthday gifts and finding car parts for their 1998 Mazda.

Global Reach

More people than any other market use Amazon. This includes places you could never reach using other means. Without ever having to target them specifically, you could post your custom sunglasses in Arizona and sell them to customers in Paris, France.

Low Upfront Costs

Setting up a seller account only requires a few minutes. You receive a substantial profit margin for your various things and the modest fees we’ve outlined.

Low Restrictions

You can probably sell it on Amazon if it’s legal. They permit anything, including the newest Lego kit and a hand-painted painting of Hulk Hogan. For some categories, you need permission; else, you’re good to go.

No Barrier to Entry

Setting up an Amazon seller account is similar to creating a Facebook account. You can start selling your goods to individuals worldwide in only one day after you’re up and running.

FBA

Selling is amazingly easy, thanks to Fulfillment by Amazon. You send all of your packages to one location, and Amazon takes care of the rest. You can make money while you sleep without having to handle inventory or logistics specific to each client.

Big Amazon Selling Community

Many social media communities, including subreddits, offer advice on how to sell on Amazon. In a relatively short amount of time, you might open your shop and develop into an authority.

Multiple Options

There are three types of selling businesses that you can select from:

  • Dropshipping is when you take care of the orders, but another business fulfills them and sends the products to the customer on your behalf.
  • Wholesale is when you buy a lot of something at a reduced price and then sell each item separately for more money.
  • Retail arbitrage is buying something cheap from a big box store, yard sale, discount shop, etc., then selling it to someone else for more money.

The Cons of Selling on Amazon

Starting an Amazon business is not without its challenges. When creating your seller account, you should be aware of the drawbacks of Amazon.

Growing Fees

The fee schedule for a sold item requires caution. Incorrect pricing calculations could result in you losing money on each sale.

FBA Fees

FBA is a useful tool, but if your items don’t sell within a certain amount of time, it might start charging you more (like storage fees).

Each sale could result in financial loss for you.

Support

Some sellers claim that they receive little assistance from Amazon. This is comparable to technical difficulties, client complaints, and other similar matters that Amazon ought to be able to resolve quickly. This is probably due to the fact that Amazon is so well-known and does not require close collaboration with individual sellers.

Risk of Closure

Your account may be suspended or terminated by Amazon with little to no notice. For those who depend on their seller account for income, this cuts off a source of income.

Indirect Communication

Customers and sellers don’t interact in person. That implies that your reputation will still suffer if someone gives one of your products a negative review because of an incident beyond your control, such as a delivery person throwing the box.

High Competition

Opening an account as an Amazon seller is simple. That has two sides to it. It implies that there are numerous other sellers on the marketplace attempting to promote their goods instead of yours.

No Fall Back

On Amazon, you cannot advertise an email list. Your store will likely close if your account is suspended or terminated.

Amazon Basics

The corporation is notorious for copying several products and offering its own “Amazon Basics” version, which may not be morally right. This may include everything from art easels to iPhone charging connections.

Change the Rules

The laws governing Amazon are not being enforced by a separate governing body. Over their own platform, they have total control. You are immune from consequences if they decide to alter the rules.

Returned Items

Amazon will not issue a refund or relist a returned item. You can either ship it back to yourself or destroy it. In any case, you will have to spend more money.

Further help

  • Amazon Seller University
  • Reddit subreddits
  • Amazon Seller Forum
  • /r/AmazonSeller/
  • /r/FulfillmentByAmazon/
  • /r/amazonsellers/

Selling on Your Website

You can choose to sell your goods on your own website if you are worried about your ability to make money on Amazon.

In this manner, you can concentrate on your own marketing while avoiding any platform distractions. You can invest the entire amount you save on fees in low-cost Google or social media advertising campaigns that drive visitors to your website.

This makes it possible for you to interact with and develop relationships with your clients. There are no limitations on when you can gather email addresses and distribute promotions.

You can create a customer list to rely on for future sales and have total control over your own store.

Alternatives to Amazon for Ecommerce Businesses

Google Shopping
Etsy
Wallmart
eBay

Final Thoughts

Being an Amazon seller may undoubtedly pay off financially. There are strategies to boost your visibility, and if you can find a supply of inexpensive goods to mark up and sell, you’ll probably make a respectable living.

Just like any other platform, there are drawbacks and difficulties, hence some vendors opt to use their own website. In any case, we believe that this information will enable you to create a fantastic internet enterprise.

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