Thinking of Selling on Amazon Marketplace? Here are the Pros and Cons

Amazon is the most popular income source in the e-commerce market! New sellers are always in search of a platform where they can sign up in a few minutes and get the product listings live on the site. Selling on amazon is easy for anyone to start listing their products on its site.

Besides, the decision to sell on Amazon should not be based on its easy signing up but many other factors must be considered. Sellers need to have a deep understanding of what it takes to be successful on Amazon.

As Amazon attracts resellers of general merchandise that offer the same products as many companies, the success of such companies, in the long run, remains a question.

The e-commerce market has a huge competition of profit margins. Every company is trying to differentiate in a meaningful way. Typically, every seller tends to work harder and harder every year to generate maximum sales and get on top rather than being on the same bottom-line revenue.

According to the internet sources, 170 million people every month prefer to make purchases with Amazon over any other store. It makes it very obvious for the retailers that they should consider listing their products on Amazon.

In addition to that, the results will entirely depend on many other factors as well. Whatever works for one retailer will not inevitably work for another one.

THE PROS OF SELLING ON AMAZON

Amazon has greatly achieved a good rating in the market in no time. It has earned the number one place for many shoppers today. So below are some pros of selling on Amazon.

More Sales

We all know that there are millions of active customers that are visiting Amazon every month to shop great products.

Amazon is the number one place for customers as they trust its customer service. It has 300 million active accounts which give the revenue of more than 100 billion dollars, making it the number one place for shopaholics.

By listing your products on Amazon, you will be able to gain credibility and trust automatically. This is because most shoppers will buy a product from Amazon rather than buying it from a shop they never heard of.

The promise of excellence and highly efficient service from Amazon entices many customers into buying the products from their website.

Moreover, in countries where online shopping is not at a faster pace and is comparatively not having a high number of customers, most people trust Amazon in that case over any other store.

International Expansion

As Amazon is the biggest and most trusted global platform it is very easy to start selling in different markets around the world.

With Amazon, any retailer can quickly test if his or her products are appealing to the audience at a global level by creating a list on a local Amazon. You don’t have the hassle of local payments, logistics and operations.

Low Marketing Costs

If you are selling on Amazon you must know that marketing costs are very less. You get access to customers that visit the Amazon store.

Depending on the type of your niche and how crowded the market is you can start selling from day one. You don’t need any marketing efforts for this.

The competition in the market is brutal and you have to stand out at any cost to sustain. Therefore, you must have a curated presence and it will help your efforts on Amazon’s huge client database. 

No Stock

Amazon has more than 100 fulfillment centers around the globe. You can choose any product and ship it in bulk to Amazon warehouses. And, they will store your inventory, pack it, and ship it to the customers who will purchase.

Amazon FBA (Fulfillment by Amazon) is your inventory warehouse, manager, and shipper for an infinitesimal amount compared to what you might pay otherwise.

Apart from freeing yourself from the hassle and stress of shipping, your products will qualify automatically for Amazon Prime Shipping. And it will have a huge impact on the sales overall.

THE CONS OF SELLING ON AMAZON

Below are some cons of selling on Amazon. There are many factors, such as, high competition, high selling fees, and order management that can have an impact on your strategy and pricing. Therefore, you need to be very careful.

High Competition

You need to have long term strategy or else you will fall in the race in terms of pricing. The competition is way too high!

Commissions

If you are selling products that are also being sold by other merchants then you will be competing with them for the Amazon Buy Box.

All the benefits we mentioned earlier doesn’t come for free. Amazon charges its retailers a commission for every product that is being sold through them. 

Amazon CPA fees range from 8 percent to 10 percent and it entirely depends on the category. So, if you are selling products in a low margin category then you have to navigate to other places because the numbers will not add up.

Therefore, when different sellers are having the same product on sale Amazon will decide which seller would be the best fit.

Order Management- selling on Amazon

You will have to sync orders if you are selling your inventory in multiple marketplaces, this is the first thing you need to think of. You will have to ensure that Amazon orders are directly added into your system for a constant up to date central order management system.

Fortunately, you can find multiple tools on the market that can help you out in this matter and ensure that the number of items or products that are available in your shopping cart is always up to date.

Note  

For many brands that are new to Amazon, they must know that Amazon will not always respect the efforts of your brand to legitimize itself as a brand until and unless it has secured the legal characteristics of the product.