While the small- and medium-sized businesses that largely comprise the Amazon marketplace have been great for the e-commerce company, it’s less clear whether Amazon has been equally great for them, writes Quartz.
Many blame Amazon for the decline of small businesses, but on the other hand, it has given many entrepreneurs the chance to reach a larger audience than they ever could have otherwise. That access, however, can carry its own costs.
For companies considering selling through the site, there are pros and cons:
• PRO: The most compelling reason for any small company to sell on Amazon is the sheer volume of customers it draws. Its Prime membership program alone has more than 150 million global subscribers, and more keep signing up.
• PRO: The tasks of managing a website, processing payments, storing inventory, and picking and shipping items to fulfill orders can be a lot for a small business to handle. Amazon allows sellers to easily sign up, list items, and start selling.
• PRO: Amazon has incentive to support its sellers. Since 2017, sellers on Amazon’s marketplace have been responsible for most of the company’s product sales.
• CON: Sales can come at a high price. In addition to levying a monthly charge on professional merchants and collecting its slice of each sale via a ”referral fee” that can exceed 15% of the price depending on the item, Amazon can also charge a number of other fees, depending on which services a seller uses.
• CON: There’s tons of competition, including from Amazon.
• CON: Amazon has all the leverage. The e-commerce giant may depend on its merchants in the aggregate, but individually they don’t have much power. Read the full report.
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January 18, 2021 at 10:10PM
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Considering selling on Amazon? Keep these things in mind - Greater Baton Rouge Business Report
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