Is Amazon the Right Platform for Your e-Commerce Business?

Val Watson
Authored by Val Watson
Posted Tuesday, February 20, 2024 - 9:07pm

Simply listing products does not guarantee sales. Amazon’s intense competition and extensive policies may also pose challenges for some merchants. Carefully weigh the pros and cons before deciding if selling through Amazon suits your e-commerce business needs.

The Pros of Listing on Amazon

Amazon is the go-to platform for online shopping in the UK and much of the world. With over two million monthly visitors, the customer reach potential is massive. Listing products on Amazon taps into their huge customer base already searching for products to buy. Additionally, as the world’s largest online marketplace, Amazon provides an air of trust and quality for shoppers.

Customers feel confident buying on Amazon, which can lend credibility to sellers.

Amazon also handles payment processing, order fulfilment, returns, and customer service enquiries on sales through its site. This is convenient yet comes with a cost through Amazon’s commission fees.

For those without an existing e-commerce infrastructure, however, having Amazon cover these processes can be a major benefit.

Consider the Cons

There are around 9.7 million sellers on Amazon worldwide, so that’s a lot of competition. This means you’ll need effective product listings and campaigns to drive conversions. New sellers may get buried under thousands of competitors and need to invest in Amazon advertising to acquire visibility. Visit this website to learn more about working with Amazon ads.

Amazon also has strict policies around product listings, requiring approval before items can appear in search results. Listings that do not adhere to Amazon’s rules risk account suspension under Amazon’s fair use policies. For those used to more control, Amazon’s extensive policies may pose challenges.

Does it Fit Your Business Model?

For all its perks, Amazon may not suit every e-commerce business. Those relying heavily on branding may want their own store to control layout, design and messaging rather than conform to Amazon’s format. Similarly, businesses with only a few products and limited distribution may find the commissions and monthly subscription costs of selling on Amazon make turning a profit difficult.

However, for smaller businesses focused more on sales volume across a wide range of products, Amazon offers an opportunity.

The platform is scalable, so sellers can add products without additional overhead costs associated with other channels. For those starting out, beginning as an Amazon seller provides a useful e-commerce experience before expanding to other platforms or launching a standalone website.

Hybrid Approach

For brands hesitant to sell solely through Amazon long-term yet keen to access the platform’s customer base, consider a hybrid approach. This lets brands test Amazon but also build their own e-commerce presence. Many brands now sell their most popular items on Amazon but drive shoppers to their independent website for full product ranges and branding experience through techniques like:

  • Packaging inserts and vouchers directing customers to own site
  • Only listing best-selling lines on Amazon with a wider range on own store 
  • Using own website URLs on Amazon listings so customers know about your own shop
  • Advertising own site through Amazon advertising platform

This combines the advantages of Amazon’s distribution platform with the control of an independent web store.

The Ultimate Consideration

Amazon’s scale and reach are undoubtedly attractive features, especially for new e-commerce sellers without existing infrastructure. However, Amazon may not suit every business model. Assess your products, profit margins, and business goals before deciding if selling through Amazon aligns with your specific needs.

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