The Pros of Selling on Amazon

The first thing most people realize when deciding to set up an online store is that there are an astonishing number of choices. And while each option has its pros and cons, your own circumstances will dictate which one is right for you. That’s why we’re reviewing all of the top options and letting you know the benefits of each one. We started with WooCommerce, and now it’s time for our second review. Everyone has heard of Amazon, but did you know they offer the following benefits to sellers?

A huge potential for sales
The size of Amazon's addressable audience is likely the most obvious benefit, but worth mentioning nonetheless. When you list your products on Amazon, you have access to a huge pool of already established customers. According to Erik Fairleigh, an Amazon spokesman, the site has more than 2 million sellers worldwide, who sold more than 2 billion (yes, billion with a "b") items in 2014. In fact, more than 40 percent of all products sold on Amazon are from independent sellers doing business through Amazon's platform. Fairleigh says sellers can instantly reach hundreds of millions of online customers when they sell their products on Amazon.

Earn repeat business without marketing
Standalone ecommerce sites (Shopify and Woocommerce are good examples) have to spend thousands of dollars in advertising just to let consumers know they exist, but Amazon has a built-in customer base that no standalone site will ever match. And Fairleigh says that Amazon sellers get repeat customers, especially when they offer exceptional customer service.

The Cons of Selling on Amazon

Even if no one can contest the numerous advantages of selling your inventory on Amazon, it's not all roses and there are many things to consider before taking the leap. Things like high competition, high selling fees, and order management will have an impact on your strategy and pricing and therefore need to be considered carefully.

High competition
You probably saw this one coming, and yes, the competition is fierce. A long-term strategy is essential. If you're selling the same product as other merchants then you'll be competing with them for the Amazon Buy Box. Unlike with Google Shopping, which organizes product pages by sellers, Amazon's pages are ordered by products. So, when multiple sellers have the same product on sale, Amazon will decide which seller is the best fit. When a customer clicks the Add to Cart button then the items of the featured seller will be added to their shopping cart.

Order Managements
If you're selling your inventory on multiple marketplaces syncing orders is one of the first things you need to think of. You need to ensure that Amazon orders are directly brought into your system for a constantly up-to-date central order management system. Amazon doesn’t integrate with shopping cart systems. That leaves merchants selling their products on multiple channels in a very challenging position to manage orders and keep their stock status up to date.

Risk of Amazon Brands
Amazon can end up becoming a competitor. If you develop a profitable category in Amazon, you may end up facing unexpected competition from Amazon Basic, Amazon Essentials, or exclusive brands from Amazon (that may even be advertised under another brand). Amazon will not control the category, but they will take an interesting piece of the cake.

Customers
Amazon customers does not purchasing from you, they are purchasing from Amazon. So you will have really hard time to get your own customers.