In “normal” times, selling your product on Amazon seems like a good distribution choice, right? During February 2020 alone, Amazon.com had over 2.01 billion combined desktop and mobile visits making it by far the most visited e-commerce property in the United States.
So, now, with the coronavirus pandemic in full swing, can a small business still expect the same service and fulfillment expertise to make signing up with Amazon worth it? Here’s some background to help you decide if selling on Amazon is the right choice for your business.
A Small Business Commitment
More than 1.9 million businesses, content creators, and developers in the U.S. use Amazon products and services and 58 percent of Amazon sales come from small and medium-sized businesses, according to the 2019 Amazon SMB Impact Report. Following is a breakdown of the pros and cons of doing business on Amazon for small business sellers.
- Seller options: The type of seller you are really depends on how much you expect to sell every month.
- If you plan on selling less than 40 products per month and don’t need access to any seller programs or tools, you can sign up as an individual seller. This is a good option if you’re starting out small and just want to test the waters, since the fees are low—$0.99 per item sold, plus referral fees. Referral fees, which range from 8-15 percent, are based on what kind of item is sold and the selling price.
- Professional sellers sell more than 40 products per month and want sales analytics and reports. Professionals pay a flat $39.99 per month, plus referral fees. Of course, you wouldn’t be paying these additional fees if you sold directly from your website; however, the added exposure of being on Amazon is probably worth it.
- Fulfillment by Amazon (FBA): Likely the biggest advantage to putting your product on Amazon is the fulfillment power Amazon offers sellers by giving them access to its massive distribution network. Amazon has state-of-the-art fulfillment centers all over the country, so you simply ship your inventory to Amazon’s warehouses. The warehouses then store, sort, pick, pack and ship your products for you. Because Amazon has relationships with multiple carriers, you’ll benefit from deep discounts on shipping. Plus, your products are eligible for Amazon Free Shipping and Amazon Prime Free Two-Day shipping.
Note: There are many requirements Amazon demands of FBA users before it will accept products such as product titles, barcodes, labels, routing, storage limits and more. Again, the requirements may be worth the hassle since once the products are in Amazon’s hands, the company handles exchanges, refunds and returns.
- Advertising: As an Amazon seller, you have a variety of options to boost visibility of your products.
- “Sponsored Products” appear before other products when a user searches for a particular item, while “Sponsored Brands” appear at the very top of the search page and highlight your brand logo and a few of your items.
- When the user clicks on your logo, they are taken to your Amazon store page. An Amazon Store page is your very own e-commerce site within Amazon and is free for sellers although you do need to have a trademarked brand or at least have applied for a trademark.
- Finally, a new advertising option is the “Sponsored Display” ad which allows you to create a display ad to use on Amazon or other targets of your choosing. If your ad budget doesn’t allow for more than one giant placement then you might want to consider another avenue for your product ads. However, the amount of data Amazon continues to amass has made Amazon into the third-largest digital ad platform
There are restricted categories on Amazon where you may need approval before being able to sell your products. Only professional sellers can request approval to sell in these categories. Currently, the list includes such categories as:
- Automotive and Powersports
- Clothing, Accessories, Shoes and Luggage
- Collectible Books
- Collectible Coins
- Entertainment Collectibles
- Fine Art
- Fine Jewelry
- Grocery and Gourmet Foods
- Toys and Games
- Video, DVD and Blu-ray
Amazon in the Era of Covid-19
To address the incomparable demand for certain supplies, Amazon has announced a temporary prioritization of products coming into their fulfillment centers. Sellers can check which of their products are deemed high priority by checking their seller restock inventory page and their restock reports.
- Eligibility is based on high-demand products customers need immediately; current inventory levels, inventory in transit; fulfillment center capacity; and the latest health guidelines. As you might guess, household staples and medical supplies are most in demand while the crisis continues.
At press time, Amazon is trying to find its “coronavirus footing” and still be the online marketplace offering the most inventory, quick delivery and worry-free fulfillment and at the same time keep employees healthy and safe.
About Rieva Lesonsky
Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog SmallBizDaily.com. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN, The Martha Stewart Show and Oprah./servlet/JiveServlet/downloadImage/38-3367-416250/Rieva+headshot.png/servlet/JiveServlet/downloadImage/38-3364-414071/Rieva+headshot.png
Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.
Bank of America, N.A. engages with Rieva Lesonsky to provide materials for informational purposes only, and is not responsible for, and does not guarantee or endorse any of the third-party products or services mentioned. All third-party logos and company names mentioned herein are the property of their respective owners and are used under license from Rieva Lesonsky.
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