Ecommerce options: whether to sell through Amazon or your own website
Amazon is an e-commerce behemoth. It started as an online bookstore in 1994, and is now the world’s largest online retailer. If you’re a small company, the decision to sell through Amazon can seem obvious – after all, you won’t be able to compete with it – but it’s not automatically the best decision for every business. With Amazon Australia set to open early next year, it’s a good time for Australian and New Zealand retailers to think about their choices – take advantage of the Amazon platform, or stick to their own website. Of course, many businesses use a combination of both, but before you make that decision, it’s good to understand the benefits and disadvantages of each option. Here’s a look at the pros and cons:
The Amazon advantage
Amazon offers a built-in market and a ready-made platform – both beneficial if you’re just starting out as a retailer. Many buyers use Amazon as a first port of call for online shopping, before looking at other retailers. This means, if you sell products through the platform, anyone can find you. There’s also a level of built-in trust – most people have bought through Amazon at least once, and think of it as a legitimate online business. Because they’re such a huge, market-leading business, Amazon’s user interface is light years ahead of other retailers. Being able to sell your products using this platform is another Amazon pro. You can also outsource your shipping and warehousing to Amazon, without the need for separate contractors.
The cons of Amazon
A built-in market is one thing – built-in competition is another. Unless you’re selling something handmade or totally unique, Amazon will usually have other versions of your product being sold by other retailers. This level of competition can make you feel pressured to keep your prices low. Selling through an open market also makes it more difficult to add on or upsell products. Amazon does generate suggested products for customers, but these aren’t necessarily from the same retailer. Finally, Amazon can make your business accounting more complicated. As a seller, you’ll receive a monthly summary of your sales, but fees, taxes and date discrepancies can make these difficult to reconcile with your bank account. Fortunately, A2X can solve this problem if you use a cloud-based accounting system such as Xero or QuickBooks Online. Our software automatically translates the data from your Amazon report and feeds it into your accounting system.
Your site, your rules
Selling through your own e-commerce website gives you a lot of control. You decide what your website looks like, how it works, how much your products will cost, how to manage shipping, and everything else. Because you can make the design fit your brand, a stand-alone site can be the best way to showcase your products, particularly if you’re selling high-quality, upmarket goods. On Amazon, your products show up alongside a whole range of goods at a whole range of prices, which can make your prices look overly high – even if they reflect the high quality of your products. You can also use your own platform to upsell and add on, maximizing the profit from each transaction.
The downside of DIY
The control you gain by building your own website comes with responsibility. If you do it yourself, you have to pay for design and hosting, shipping and warehousing, and ecommerce capability. You’re also responsible for updating your site regularly as the market changes. Without the built-in market that Amazon provides, you’re also forced to find your own customers through Facebook or Google advertising, SEO, and traditional marketing efforts, which you can do through employing marketing consultants. This can be difficult and time consuming, particularly if you’re a very small business with niche products. Every business is different. Your size, your market share, the type and quality of your products, the number of staff you employ – these will all factor in when you’re deciding how to sell your products online. Amazon Australia, your own standalone site, or both – it’s really up to you. If you do decide to go with Amazon, the A2X team can help make the accounting side of things easier. Get in touch for a chat now.
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