Why not to sell on Amazon? Have your own website instead

MANCHESTER, U.K. - Jan. 31, 2015 - PRLog -- Amazon is a very popular marketplace for online sellers. Depending on what you are selling, you can sometimes make a really good business there. However, it might not work for every business. Therefore, having your own ecommerce website/online store (http://www.oelite.com) once your business starts growing might be a better option for you. Why?

1.    About your money

Selling on Amazon is neither free, nor cheap. You need to pay Amazon referral fees, per-item sale fees, and variable closing fees for products sold through the marketplace.  Since the fees vary from category to category, it is sensible for you to check out fees for selling on Amazon and calculate your margins in detail. It has been calculated that “you need to be making 40 percent margin on products that you consider listing on Amazon” [1] in order to make profit because of all the above costs.

Once you have made some money, Amazon will not release it until 14 days later, and it takes about another week or so for the money to be transferred to your associated bank account. This may not sound like a long time, but might be a huge issue for those who need cash urgently.

2.    Better CRM

Keeping in touch and maintaining a good relationship with your customers makes your business sustainable. However, it is very difficult to keep a good CRM if Amazon is the main channel for your sales.

First of all, customers register their information with Amazon rather than your business, so you do not hold customer information. Secondly, Amazon is preventing sellers control over customer relationship management (CRM). For example, Amazon’s selling policy states clearly that sellers cannot contact their buyers for irrelevant matters. This means you cannot make the best use of your existing customer information.

Moreover, if you choose to use Amazon’s fulfillment service, you would not know anything about the customer at all.

3.    Flexibility of sale

Sellers are restricted in many areas when using Amazon to sell their products. For example, you are prohibited to divert transactions or buyers to another website or sales process; you cannot contact your buyers without using the Buyer-Seller Messaging Service which Amazon provided. Plus, you cannot sell internationally.

On one hand these rules protect the seller and buyer from fraud, however it also limits the possibility of further marketing and promoting of your own business with existing customers.

Furthermore, you cannot list your item in the way you want if it is already on Amazon marketplace. This means it is difficult for your product to be shown in the top of the listing if many sellers are selling the same product.

Moreover, not all categories - such as those related to consumer electronics - are open to all sellers. Instead, you need to go through an approval process where many get denied.

4.    Branding

Though you might find Amazon is very helpful at the moment, you do not want to rely solely on it for your benefit in the long run. Remember that the branding of Amazon is designed and built to reinforce its sales but not yours. Hence, what you can do about your branding is very limited, and you have no opportunity to upsell with the intervention of Amazon.

Therefore, you need to Think about making your customers come back because of You and Your products but NOT Amazon if you want your business to keep growing.

5.    Sell Yours not theirs

Since a product can only be listed once on the marketplace, the only mechanism you have in order to make sure your product is ranked in front of everyone else, is to try to offer a competitive price. Numbers of reviews a seller has and total competing offers will also affect the ranking.

Besides competing with all other sellers on the marketplace, you also need to compete with Amazon itself. Because Amazon has started selling its own products now, it makes the competition even more intensive. There are comments from sellers saying that their business on Amazon marketplace was crushed by Amazon, because Amazon decide to offer the same items on the marketplace with really good prices.

In conclusion, if you are selling something unique and it has not become a “hot” item on Amazon, then yes you may find Amazon is particularly helpful to your business growth. Otherwise, do not fully rely on Amazon and hope it will bring your business to a better level. Instead, you should really consider having an ecommerce website/online store of your own (http://www.oelite.com) for the long-term development. Talk to us (http://www.oelite.com) if you need help about this.

Reference: [1] Practical Ecommerce: Selling on Amazon: Pros and Cons
http://www.practicalecommerce.com/articles/2928-Selling-o...