Is Amazon Right for Your Business?
Each year, VersaFeed helps businesses explore the Amazon Marketplace and evaluate the challenges it presents. We even maintain a list of marketplace providers that we partner with.
However, many businesses decide the risk is not worth the reward. This articles explore the challenges of listing on the Amazon Marketplace to help determine the best answer for your business: is Amazon a fit?
Some of the common challenges that must be evaluated:
- An approximate 15% revenue share
- Significant fees for shipping and warehousing to participate in Amazon Prime
- Gated/blocked categories and brands
- Difficulty controlling your brand image
- Pricing/MAP issues (can't sell for lower, even on your own site)
- Amazon “uncertainty” (e.g., might block your products, might compete directly, might inadvertently allow counterfeit listings, might force you from 3p to 1p, etc.)
What we have seen:
Very few big name multi-brand retailers list on Amazon. That is, you won't find merchants like ACE Hardware, Barnes & Nobles, or Macys on Amazon's pages -- but you will see some brands: companies like Nike, IKEA, Gap, and Birkenstock have tried to work within the the confines of Amazon (and unfortunately have often given up after some public squabbles).
That said, many brands do find success! In particular, if you have a unique market niche, high margins, and are the actual manufacturer of your items, you could potentially find Amazon to be a life-changing sales channel.
Still deciding if your business is a fit? Run through this handy PDF scorecard (Should Your Company Sell on Amazon?) to see if you're a fit for the Amazon world.