Perhaps as a kid I watched Creature from the Black Lagoon one too many times, but I always thought of the Amazon as someplace mysterious and dangerous; a thick, impenetrable rainforest where you’d surely get lost and potentially meet your end. Who would think that all these years later, many e-commerce professionals would have similar uneasy feelings about it –Amazon.com, that is, and more specifically, becoming a seller on the ubiquitous site.

While I have successfully pIaced product on Amzon.com, I have also heard several reasons to explain why some people have some trepidation about doing so. While all of the reasons hold some merit, I think it’s prudent to ensure that all facets have been carefully examined before making a decision one way or another.  Here are some considerations on the topic:

Reach

There is no question that Amazon.com has a tremendous amount of reach, with continued chart-topping traffic figures.  It’s hard to scoff at almost 90million US visitors per month.

Intent

Those visitors are also in the mood to shop and to buy. As fellow EcommerceConsultant.com contributor Steve Brita commented a few weeks ago, more people search for products to buy on Amazon than on Google. And the divide seems to be increasing.

Brand

There are several considerations on the branding front. First of all, realize that Amazon.com has tremendous brand value which was earned by providing consumers with excellent service and selection. Your brand may actually be elevated by being featured on Amazon.com – a sort of implied endorsement. On the other hand, depending on your product category and your own brand positioning, you may feel that you can’t or don’t wish to compete on things like price with the other providers in your category. In some cases, you may be able to rise above the fray with your unique brand, but realize that there isn’t much room for brand messaging once your products are loaded into the Amazon.com ecosystem.

Cost

The monthly fees and variable commissions to sell on Amazon.com are quite reasonable, particularly if you’re used to paying affiliate commissions or paying for media. The professional level plan runs $39.95 per month and variable fees are around 15%, depending on the product category. The question is, what sort of visibility will your product get for that? In crowded product categories, probably not much at all; which is where Amazon.com’s PPC advertising comes in. It is likely, then, that there are costs involved other than just the monthly fee and sales commission. There is also an investment in time and effort to plan, monitor and optimize your paid advertising on the Amazon platform.

Control

Remember that when selling on Amazon, the customer experience is, for the most part, in their hands, not yours. You do not have remarketing rights to those customers, nor can you contact the buyer without going through Amazon’s interface. Amazon is also the party charging the credit card, so they control the cash. You get paid net of fees and commissions, and there is a lag between sale and payment of up to a couple weeks.

Operations

While I have found the integration and operation to run pretty smoothly, it really all depends on your internal systems and set up. Carefully reviewing the entire process flow, including returns and refunds, is an important factor in the decision process.

In the end, Amazon isn’t as scary as the 1950’s sci-fi movies made it out to be. I’m sure there are other considerations, both pro and con, that you’ve thought of. Please, feel free to join the conversation and leave a comment. And when we’re done here, we should probably have a look at e-Bay.

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One Response to Seeking Treasure in the Depths of the Amazon

  1. WesPomeroy says:

    There’s another potential pitfall in doing business with Amazon – enabling them to be a (bigger) competitor. I’ve seen several instances where Amazon decides to focus on a category, solicits top retailers to help build it, and then once the rich audience data and sales are there – out price and out position their “partners” .

    You don’t get to remarket to the customer and build your brand. Your product gets further commoditized. You’re giving up a lot of your margin (as you do on all affiliate-style channels). And when the holidays come, Amazon knows what “your” customer wants and how to reach them.

    If your goal is just to move units, if you have great margin, or if you’re in a niche category or have limited competition – Amazon could be good. For almost everyone else – forget it.

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