Amazon started as a online bookstore and web-based virtual database in 1998. In 1999, they began sales of other products such as, software, video games and home improvements items. In 2002, Amazon launched Amazon Web Services, a cloud computing infrastructure. Today, Amazon is considered to be the largest internet retailer in the world when it comes to revenue and market capitalization. A huge percentage of ecommerce searches start with Amazon. Sales topped at $177.9 billion back in 2017, a staggering 31% increase from $136 billion in 2016.
Let’s review some of the pros of using Amazon Marketplace.
Pro: It’s fairly easy to get started on Amazon Marketplace
“Amazon makes it easy to reach a large consumer base at scale and gives you the tools and infrastructure needed to do so,” says David Heacock, CEO. “Getting started is certainly easier than setting up your own website and warehousing infrastructure. Create your product listing, send inventory to an FBA (Fulfillment by Amazon) warehouse and you are in business.”
Pro: Great for businesses with distinctive products and excellent profit margins
For businesses that have unique products, Amazon Marketplace is the place to set yourself apart. It allows companies to control their own brand and chart their own destiny. One of the biggest problems that brand owners face is pricing their products for maximum profits. In a more traditional distribution model the testing and measurement of price elasticity is slow. Retailers and Intermediaries will clash over price changes, and ask for grace periods varying from a few months to years, depending on the agreement. However, on Amazon Marketplace the only agreement the businesses need to reference is their break -even point. Amazon customers are already used to price fluctuations, so their will be no negative impact. Keeping the break – even point in mind, brand owners can adjust prices up and down, and watch their impact on sales. With proper tracking, sellers can identify the optimal price that allows the best possible product sales ratio to profits.
Pro: Good for small and medium sized businesses (SMBs)
Amazon FBA has taken the heavy lifting of logistics off many sellers shoulders, allowing them to focus on building great products and service their customers. The FBA program handles the payment methods, which are quick and easy. They also offer discounted shipping all over the world.
Using Amazon can be profitable for businesses after doing the research on your product or service and the competition. Creating a strong budget plan is also essential for success. Amazon does help you reach more customers but it is up to you to win their loyalty with superior customer service.
Now that you have read this blog on why you should sell on Amazon. Read ‘Why You Should Not Sell on Amazon’