The pros and cons of selling on Amazon

You can create a seller account and begin selling on Amazon in an instant-but what are the pros and cons? This blog will mention the advantages and disadvantages of selling your products and services on Amazon.

Selling on Amazon is easy. You simply set up a seller account and instantly get to business. There are many advantages to selling on Amazon. It’s quick, easy, and highly convenient. However, with millions of sellers already listed and registered to the marketplace, there are some disadvantages that you should also consider before taking the leap.

This blog will mention the pros and cons of selling on Amazon so you can decide whether it is a profitable business venture and the right e-commerce platform for you.

The pros

International potential

On Amazon, you have the potential to sell to and reach consumers on a global scale. While other marketplaces may restrict you to UK or European shipping, you can take your brand worldwide on Amazon.

Amazon is one of the biggest buying and selling platforms in the world which makes it easy to start selling overseas. They ship to over 100 countries worldwide which makes it easy and quick to test your product’s global appeal.

With Amazon, international order fulfilment and local customer support are automatically dealt with. So, all you have to do is decide where you want to expand, register to sell in that country, and make the most of Amazon’s tools to manage your business effectively.

More sales

You are more likely to secure a sale by advertising your products on Amazon as typically, buyers prefer to shop from Amazon rather than a shop they are not familiar with.

Amazon’s appealing customer service and customer security offerings entice shoppers to make protected purchases through the marketplace. Therefore, if your products are listed on Amazon, you can benefit from increased sales.

Additional exposure on the platform will also help you secure more sales as you appear in more searches. A well-optimised product description will ensure your products are displayed higher up the listings page when consumers make a search.

Credibility

Selling on Amazon has the ability to improve and establish your business credibility. Consumers are quick to trust that you are a reputable seller if you are listed on Amazon.

Amazon is a great place to build brand equity and consumer trust. By creating well-structured and informed product pages and providing high-quality product pictures you can quickly and easily establish your brand and reputation through selling on Amazon.

The cons

High competition

There are literally millions of sellers on Amazon, so the competition is super high. So, it is more than likely that the products you sell will already be listed by other sellers. However, there are many strategies and ways you can outrank your competition.

Good customer reviews, a pricing strategy, and social media are just a few ways you can beat the competition and rank higher in the marketplace.

Positive customer reviews help to establish your brand and stand out among competitors. Savvy consumers won’t want to risk buying from sellers without credibility, so securing positive customer reviews is important. You can encourage good reviews by providing excellent service and adding unexpected value.

The right pricing can also significantly affect your ratings and store performance. Be sure to monitor your competitors and review your pricing strategy regularly to remain competitive.

Social media is powerful and free, so it is a great way to advertise your products and build a loyal customer base.

Lack of control

Since you won’t own Amazon, you have a lack of control when it comes to branding and narrative in the marketplace. Although Amazon exposes your brand to consumers, brand and seller names are often overlooked by consumers, meaning you may not be getting the recognition you deserve.

Additionally, as a seller on Amazon, you do not have control over the algorithm or rules that the marketplace operates by.

Marketplace fees

Unfortunately, the many wonderful benefits of Amazon do not come free. If you sell on this platform from an individual account, there is no subscription fee, but you will have to pay a commission for every product sold through the marketplace. Alternatively, you can pay $39.99 per month for a professional account with no item commission fee.

The success of your Amazon selling experience can determine which plan is best for you. Typically, smaller or new sellers find it cost-effective to sell using an individual plan. However, larger sellers and sellers that sell over 40 items a month find the professional plan more suitable.

Overall, there are many benefits to selling on Amazon. However, there are also many key considerations for you to think about before getting started.

Understanding the financial health and market position of your e-commerce business can help you determine the future of your store and decide whether selling on Amazon is right for you.

At Unicorn Accounting, our expert e-commerce accountants are on hand to discuss your e-commerce accounting needs and to help maximise the growth of your e-commerce store.

To see how we can help, get in touch today.

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