The Hard Truth About Amazon You Must Know Before Start Selling

Amazon is one the most well-known online shopping marketplace in the world. It has grown from a humble beginning till where it is now today.

Although the company is based in US, it does not only serve the US market but also cover most part of the world for delivery.

This means people outside of US are still able to enjoy the platform…

…for shopping and have their goods to be delivered right to their doorsteps.

With the huge opportunity it poses, many online entrepreneurs are looking into Amazon to sell their physical products.

After all, who don’t want to be on a famous platform, right?

On the surface level, it might be the best choice for online business.

However, they’ve failed to see the downside of it and might get trapped in an unfavorable situation after getting into the platform.

So, this post is dedicated to bring you through the different lenses about Amazon without any bias.

There are things you should be aware of – both good and bad before you jump straight in into selling on Amazon.

This would help you avoid some of the pitfalls that could jeopardize your entrepreneurship journey.

And you can make a wise decision whether the platform is a good fit for your expectations and risk profile.

Are you ready for me to peel off the skin from Amazon?

Awesome.

Let’s get straight to the point…

Amazon Traffic

Undeniably, it having a super huge amount of traffic every month in its platform.

According to Statista –  a leading provider of market and consumer data, Amazon is having a whopping 197 millions unique monthly visitors (as of December 2017) which is shown in their analysis graph below:

This simply means that it is not going to have any shortage of ready buyers any time soon.

Not only that, it is also a super established brand name.

Means it is already having a lot of trust from the market and people more willing to part with their money.

So, by just listing your physical products there, most likely you’re going to generate some sales even if you’re new in the game of online business.

It’s going to be a perfect fit especially if you don’t have much marketing skills yet.

Competition

While Amazon is a good place to start with, but do aware of the competition it is having also.

Because of its huge buyers potential and easy entry mode, many entrepreneurs are rushing into using this platform.

To take advantage for their own businesses.

This has contributed high influx of sellers over the years.

What does this means?

There is a probability other sellers are also selling the same products as you.

Your potential customers might going to buy from your competitors which could afford to offer lower price.

So you need to compete really hard in terms of pricing to have consistent sales to maintain your business.

Amazon Selling Plan

If you want to list your items in Amazon for selling, you must register either 1 of the 2 plans (Individual and Professional) offered.

Individual plan is free of charge from monthly subscription while the Professional plan is subjected to $39.99 monthly.

Both plans would required you to pay referral fees and closing fees for each item successfully sold.

However, individual plan is having additional charge of $0.99 per item and you can only sell up to 40 items only.

Also, there are 10 product categories not supported for selling in this plan.

So you’re left with little choice but to subscribe to Professional plan if you want to remove the limitations.

Ranking & Visibility

Because Amazon is having a lot of sellers, your products might not necessary appear in the front page or at the top search results.

Especially if you’re a newcomer and not much sales yet.

The platform is using a complex algorithm to decide which products would have the benefits to get premium visibility.

There is really nothing much you can do to control the free traffic from this platform.

Except doing your best with keyword optimization on your product title.

However, you could leverage on built-in Amazon advertising solution to give your product a better discoverability.

This is of course requires you to pay additional fees.

If you’re willing to spend on advertisement, you can too using external traffic such as Facebook advertising.

Amazon FBA

This is probably one of the advantages for selling in the platform.

It is a Amazon fulfillment service whereby you keep your products in its warehouse and it would help you with the packing and sending them to your customers when there are orders.

You would gain benefits from this because you can win your customers over with fast shipping time.

Not only that, you can save yourself a good amount of time and headaches from dealing with packing and shipping.

However, there is drawback as well.

The products stored in its warehouse only can be used to fulfill orders coming from Amazon and not for other platforms such your own website.

So make sure the products you want to use FBA service are having high demands in the platform.

Risk

While it is easy to get started with Amazon to sell your products, there is no guarantee that your store going to be there forever.

It is having a super strict policy, if you accidentally break the rules, your store might be suspended.

And all the efforts you’ve put in all the while would just gone like that.

It is really unfair, don’t you think so?

This is a nightmare faced by many sellers before.

So never assume you’re 100% safe all the time.

You don’t really have the control over your store lifespan.

You’re at their mercy to stay in the business.

What you can do is having best practice and make sure you adhere to their latest policy.

Plus keep your finger crossed hoping your store could last as long as possible.

Conclusion

You’ve seen both upside and downside of Amazon, so you probably know how to manage your expectation on this platform.

I hope right now you can make an informed decision whether you should use it or not.

A word of wisdom here. Never too dependent on 1 platform only. Never put all eggs in 1 basket.

If you found this post useful, please let me know in the comment box below.