Are you about to launch your first e-commerce store? Maybe you have an established store but aren’t sure if you are making the best of your business. Either way, you may wonder, “should I sell on Amazon or my own website?”. There are pros and cons to both, so let’s dive in.
Many e-commerce entrepreneurs launch their first store on Amazon, and there are plentiful reasons to do so. It can get you from zero to thirty in a flash but is it the right decision in the long term?
The number one reason to use Amazon is the pre-built audience. Amazon averages 450 million monthly visits to the UK site alone. An effectively listed product can be seen by a mind-blowing number of people.
The downside is that Amazon marketplace is gaining new sellers every day too and it is hard to stand out in the crowd. While the traffic to your website will be a fraction of Amazon’s, potential customers are there to buy from you. They are interested in your offering, and they will be unlikely to do a lot of comparison with your competitors.
Anyone can sell on Amazon with minimal setup, as seller accounts make use of Amazon’s existing interface. Websites are a little more time-intensive, but they don’t have to be hard work.
Gone are the days where intricate coding knowledge was needed to create an online store. You can build a great-looking store from scratch in a matter of hours using Shopify, Wix or numerous other platforms. Wix starts at £13 a month for e-commerce, whereas built-for-purpose Shopify is $29. Both options include a free trial, so you can build your site and check you’re happy before you commit to paying.
Amazon sellers are able to customise their shop front, but the branding remains predominantly Amazon’s. It’s difficult to build a cohesive brand or make a shopping experience unique if you have to comply with Amazon’s restrictions.
If you don’t have the first clue about branding, the customer journey, or colour palettes, this can be an advantage as it cuts decisions down dramatically. If you want to build a strong, standalone brand, however, it can be tricky for people to notice you.
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Selling through Amazon does have its perks on the accounting side. Xero has plenty of app options that will tidy up and feed your sales data directly to your accounts. This can minimise the time you spend accounting, even if you sell internationally. However, Amazon won’t be held responsible for the correctness of your position, so international sellers should always consult an e-commerce accountant.
Selling through your own store simplifies accounting, and most major e-commerce platforms will again integrate with Xero through add-ons.
Sellers on Amazon marketplace don’t own anything. They sell on a site that isn’t theirs, and, as such, their customers are not truly theirs either. That’s right – customers remain Amazon customers, and that means it is tricky to market to them. Customers coming back to Amazon is a sure bet but coming back to your store is often another story.
It may be harder to drive customers to your store, but, once they’re there, you can use email marketing, discount pop-ups, targeted ads and more to turn them into repeat customers.
Selling on Amazon or your own website
Your unique skills and market position can sway the best platform for you, but many entrepreneurs choose both. By selling on Amazon, you build quick sales and create momentum for your products and brand. Then you can use these customers and their (hopefully!) positive reviews to funnel people to your website.
Interestingly, in a culture where many are choosing to shun the larger brands in favour of small businesses, many savvy shoppers use Amazon differently – to scope out the brand they wish to buy from. They then look for a direct way to purchase, choosing to cut out the corporate middleman and put the money straight in your pocket. Capitalise on this by making it clear where they can find you and pricing competitively on your website, so they have a reason to use it.
Whether you have a store up and running or are looking for some expert advice on how to get started, our team of specialist e-commerce accountants is happy to chat. Let’s talk and maximise the growth of your e-commerce store.
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