8 Reasons Why You Should Start Your Own eCommerce Business Instead of a Seller in Amazon
Amazon, a globally used eCommerce website, sells more than 600 products per second. This is good news for buyers because they can trust this company and purchase, knowing that their customer needs will be taken care of. It is also good news for sellers to use this platform because they only have to list their product and comply with the seller norms of the company, and Amazon will take care of the rest. Why would any seller want to miss out on the opportunity to get a large amount of traffic without having to invest anything? How selling on one of the biggest eCommerce platforms cannot be beneficial? Many claims that they have made huge profits out of selling their products on Amazon and this company has been in business for quite some time now. So why shouldn’t I also try my luck and make some money out of it? After all, I have products that are in-demand. If these questions are popping up in your mind or if you already a seller, it is imperative you know these reasons so you can nurture your own business.
1. Aggressive Competition:
If you have been a seller on Amazon, you would have already noticed multiple competitors listed right next to your products on a daily basis. This is true for every product in all the industries, which means you have to compete with hundreds of sellers within local geographic areas too. With same target audience, similar product offerings, similar pricing, the only factors that will beat your competitors would be either at the discounted price, quality or variety. There is no room to execute an eCommerce business plan. Brand loyalty is not a factor here because brands who have built loyal customers for themselves would have websites of their own. Having their own online eCommerce business is one of the main reasons why they have loyal customers. With their own e-store, these businesses have the liberty to serve their customers directly, therefore building good customer relationships. Also, they have complete control over every detail of the business and have no necessity to comply with any rules except their industry and Government.
2. Marketplace Fee and Delayed Payout:
Amazon has a lot of different fee payments and fee structures for payout to sellers. There’s commissions, marketplace fees, warehouse charges, FBA and many more kinds of fee, most of which would be incomprehensive to the beginners in this marketplace. Since Amazon carries out the deliveries of sellers, it requires the sellers to hand over a certain unit of their goods to its warehouse. This means that a portion of your stock is locked up in their warehouse until you compete with thousands of other sellers in their marketplace to get your products sold. On top of it, as a seller, you will have to pay warehouse fee to Amazon for this. Similarly, Amazon charges the sellers for every service that it offers to the customers, which is waved-off from the seller’s shoulders. So after navigating through a complex payment structure, the payout that is credited to your account will be your profit. Amazon also has buyer protection policy due to which the payments are released after a particular number of days after the product being sold. When you consider starting an eCommerce store, you don’t have to bother about unnecessary monetary calculations and forego money in the name of service charges.
3. Reviews and Rating:
Hardly any buyer notices the name of sellers on Amazon. All they focus on is the product that they are looking for and to check the authenticity of the seller by checking on the reviews and ratings of the seller. Sellers have to deal with nasty reviews because Amazon strictly upholds the fact that the customer is always right. These reviews ultimately take a toll on the visibility and ranking of sellers.
4. Cannot Advertise:
You cannot advertise if you are selling on Amazon. If you do so, you will be buying ads on Amazon’s website and not particularly for your product listed on Amazon. This means you are building their brand and not your own. Since the ad bought is for another domain, there is no way for people outside Amazon employees to track the conversions. So, all the money invested in this goes down the drain.
5. Cannot Personalize:
You cannot personalize as per your customer’s requirement because Amazon does not provide a platform for customers to state their needs to buyers. So you will never know if your customers require any changes to be made to your product. When there is no buyer-seller relationship, you miss out on the feedback and suggestions of the customers and prospective customers. This means lost eCommerce business opportunities.
6. No Access to Customer Base:
Sellers do not have access to any details of the customers of Amazon because the eCommerce giant takes up all the processes of the e-store. Sellers can only post their product details and have to pay an additional sum of money per additional feature. The worst part being your competitors listed right next to all your products because Amazon advertises similar products on the same page to make it easy for the customers to purchase. Such marketplaces focus on the products and building their own brand, and not for the benefit of sellers. When you do not have access to your own customers from Amazon, it is not possible to contact them later for feedback or remarket your products.
7. No B2B and Repeat Sales:
B2B customers across all segments expect one-to-one contact. Personalization in products and building a personal relationship are the keys to making B2B customers. Repeat sales are also made only when the customers know the brand and want to purchase it again. On Amazon, the name of the seller is barely visible. Except for the name of the seller, no other detail is mentioned. So there is no opportunity for brand building. Starting an eCommerce business is what will get you B2B customers and repeat sales. If selling a few items and then closing down is what you are planning for, then marketplaces like Amazon and eBay are good. But if you are looking to run a sustainable business, then you should start an eCommerce business.
8. Qualifying for Buy Box:
With cut-throat competition, sellers have to have the best of prices, best of reviews and best of listing practices to qualify for buy box. You cannot actually work hard to reach the mark and qualify for buy box because as a seller, there is only so much you can do in the marketplace that has restricted the seller from all directions. So it’s actually a mystery for most of the sellers, leading them to fail in gaining or retaining their place.
These are eight main reasons why you should consider starting your own eCommerce business instead of listing as a seller on marketplaces like Amazon. Any sustainable business can sustain only when it has its own place in the market because Amazon can remove any items that can be listed on its eCommerce website. If your product falls under this list, you cannot sell that particular product in their marketplace. So it is wise to have your own eCommerce store to cater to the needs of your consumers and grow your business.