By Teddy Smith
Retailers today are turning to online marketplaces as a way to get their products in front of a bigger audience. One marketplace that has become especially popular is Amazon. Amazon Prime had a staggering 112 million U.S. users as of January 2020 and has a global reach which is unmatched by any other marketplace.
While Amazon offers a huge opportunity for entrepreneurs in terms of customer reach, how do you know if it’s the right place to sell your product? If you’re considering doing business on Amazon, here are answers to some common questions.
Is Amazon the right place to sell my premium products?
Amazon is where you go to buy inexpensive books or kitchen products, isn’t it? Amazon has traditionally been seen by many premium brands as a discount retailer, and for that reason many brands have been reluctant to sell on the platform because of the perceived damage it could do to a brand. Another concern premium brands have is the risk of their products being sold on Amazon by hijackers and disreputable third-party sellers, and the negative impact it could have on customer perception.
Amazon has worked hard to try and reposition itself away from being a discount retailer and many luxury brands have recognized the value of having a presence on Amazon and the ability to reach a huge consumer base (particularly important at a time when many department stores and malls across the world are in lockdown). Beauty brands are a good example of this, with many high-end brands such as Stila and Elizabeth Arden reporting sales spikes during the pandemic
Amazon alternative? If you have reservations about selling on Amazon, an alternative would be to sell through your own website where you have complete control over your brand and the customer experience. You might also consider niche marketplaces such as aftcra which specializes in American handmade goods. Total number of customers may not be as large, but you will be reaching an audience that is more likely looking for products similar to yours.
Is Amazon the right place to sell my handmade products?
Pre-2017 the answer would have been no. For a long time consumers associated Amazon with mass-produced generic products, but then Amazon launched Handmade on Amazon.
Amazon Handmade is a store dedicated to customers looking for unique, handmade products, and features more than 1 million handcrafted items. Amazon protects the quality of this category by requiring sellers to meet a strict list of criteria.
Amazon alternative? Etsy is the obvious alternative to Amazon Handmade. Etsy has over 35 million buyers, all of whom are looking for unique, craft products. Etsy can also end up being cheaper for some sellers as it charges lower commission fees, although it charges listing fees and the listings have expiration dates (unlike on Amazon Handmade). Many brands sell their products on both platforms to the best of both worlds.
Is Amazon the right place to sell expensive products?
Amazon used to be the place where consumers could find their favorite products at a low price. Offering customers value for their money is at the heart of Amazon’s offering, and many companies offer product discounts and coupons in order to stay competitive.
This is one of the reasons that so many consumers use Amazon as a price comparison tool. One survey found that 66% of U.S. consumers typically start their search for new products on Amazon, compared with 20% who start on search engines such as Google.
So is it worth selling high-ticket items on Amazon? Surprisingly, yes, it can be. On Amazon you’ll find brands selling high-end sports equipment, expensive technology, art, and even memorabilia—and doing really well through the marketplace. While there are plenty of bargain hunters on Amazon, there are many shoppers who use Amazon to find exclusive products which may be harder to find in retail stores.
The key is making sure your products listings are fully optimized so they clearly display the quality of your products. That means using high-quality lifestyle images and writing persuasive copy so that customers can feel confident about the product they are buying.
Amazon alternative? If you’re not convinced about selling premium products on Amazon, perhaps you would rather sell from your own website where you can target a select audience and provide a high-end experience. You can also market your products via one of the many niche marketplaces. Houzz,which stocks a wide range of houseware brands, and Poshmark ,which showcases a diverse range of fashion labels, are two good examples.
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Is Amazon the right place to sell large products?
When you look at the Fulfillment by Amazon (FBA) fees and inventory storage fees that Amazon charges for large, oversize products, plus the cost of shipping, you may decide that selling large products simply isn’t worth it, and you would rather fulfill items yourself. But don’t immediately write off FBA—it all depends on your margins.
If you’re selling high-priced items, such as high-quality coffee tables or armchairs, for example, then you may find that you are able to absorb the higher fees and still make a considerable profit. The other thing to consider is you will have far less competition selling large, oversize products as most sellers stick to small, light products, and your advertising costs will likely be lower.
Amazon alternative? If selling your large products on Amazon isn’t economical for your brand, then you may be better off selling via your own website where you won’t have any fees. Another option is eBay, which has a large customer base and lower fees.
Is Amazon right for you?
Amazon is not the right platform for all brands and products, but it’s worth considering, if only because of the size of its huge global customer base. The site has changed a lot over the last few years—it’s shaken off its discount store origins and now caters to a wider range of consumers with varying tastes and budgets. However, if it’s not the right fit for your business, there are other marketplaces that might be better for you.
About the Author
Post by: Teddy Smith
Teddy Smith is an e-commerce consultant and founder of AceListing, a management and product listing service for Amazon sellers.
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