Around every corner, brick and mortar giants like Sears, and neighborhood shops alike are shutting their doors. Many people cry out that Amazon has killed the retail industry, making competition impossible. But let’s summarize why Amazon is not a small business’ enemy – it’s an untapped tool for entrepreneurs.
Over 1/2 of the Items Sold on Amazon are from Small to Mid-Size Businesses
That’s right. Amazon isn’t this big bad wolf, instead it is a tool that many entrepreneurs (over 1 MILLION in fact) can leverage to bring customers to their brands. How do I know this? Aporei Loungewear & Velox Driveline Parts; our clients, are two of them. So let’s break down how these small businesses are using Amazon to thrive:
1. People Enjoy Shopping Online
It’s true. It’s become more and more of a pain to go to an actual store these days. I want to sit on my couch, do the research and buy what I chose. I don’t want to walk into a sales floor and be approached by someone on commission trying to sell me. I’d rather do the research, and have the brand convince me that I made the right choice for the niche. This is where Amazon really succeeds. They allow smaller brands to list products without even building and hosting a website. Anyone with the right business documents and access to a computer and camera can list their items on Amazon without the difficult web design background. Best part? We have the experience and can help you optimize you Amazon shop. Now that is a win.
2. Amazon isn’t Taking Your Margin
So I get comments all the time: “Don’t you hate paying Amazon’s margins?” Well, no. Especially if you built your business to do wholesale, which most brands do if they want to reach boutiques. Wholesale pricing is made to go down to at least 50% for bulk orders. Now the best part? Amazon isn’t taking the 50% profit that a brick and mortar retailer would, instead it’s usually around 15%. That’s pretty awesome. And to add the cherry on top, they aren’t going to call you at the end of the season and ask for their money back on items they didn’t sell. You have the choice to pay inventory fees, or simply to ship back to your stock.
3. Amazon Will Do Your Warehousing & Shipping
Which leads to the next point. It takes a lot for a business to be big (and organized) enough to run a warehouse. Especially if you carry multiple SKUs and are fulfilling multiple B2C orders a day. What’s great about Amazon is that you can decide to warehouse yourself and ship orders as they come in, or opt-in to FBA – Fulfillment By Amazon. Guess which one I like? The automated route of course; work smarter not harder. With FBA you are able to ship your products to Amazon and they fulfill from their strategic distribution centers throughout the US. This means you can literally wake up to 7 items being sold over night and you don’t have to have to pack up a single one. How’s that for automation?
4. Amazon Has Their Own Customers
The final point is the biggest. Amazon has their own customers. With Amazon you’re not constantly looking for ways to hack into new markets. Instead, they have their loyal fans already searching for the items they need. What’s even better is that your new customers can add your products to their carts and check out when it’s convenient. They don’t have to type in a credit card, and they trust the value behind Amazon’s customer service. That’s a win for both sides.