eCommerce has exploded this year thanks in no small part to government stay at home orders.
On the one hand, this shift has put brick-and-mortar stores at an even deeper growth disadvantage than they’ve been at over the last few years. On the other hand, consumer’s massive shift towards online sales has inspired several would-be entrepreneurs to find products and start selling them online.
If you’re in the group that sees selling online as a means to turn what has been a bad year into a positive one financially, you’re reading the right post!
Below, our team looks at whether you’re better served selling your goods on Amazon or your own website. We explore that question by diving into the pros and cons that should prove to be revelatory.
Keep reading to learn more!
The Pros and Cons of Selling on Amazon
Amazon is the most recognizable name in eCommerce. The company has millions of active users and generates billions of dollars in revenue every year.
Is choosing to sell with Amazon worth it though? Here are a few benefits and drawbacks to help you work through that question:
Amazon Has a Built-in Customer Base
Selling online through Amazon is like having a booth at a swap meet that brings in hundreds of millions of customers every day. That guaranteed audience is something that, as a seller, you shouldn’t take for granted and has the potential to make you extremely successful.
Amazon is showing no signs of slowing down when it comes to bringing buyers in so you can expect large swaths of patrons for the foreseeable future.
As you start selling online, you’ll quickly realize that shipping goods is one of the biggest headaches you’ll run into in your workflow. Amazon has made that process easy for you and consumers through their FBA program.
FBA enables sellers to ship their goods in a single box to an Amazon warehouse. From there, Amazon stores those goods and when ordered, picks, packs, and ships them on your behalf, all in under two days.
When you sell through Amazon, each of your successes and failures is tracked in a powerful analytics dashboard. That information enables your company to operate more intelligently by investing in products that are working for you and removing ones that don’t, among other things.
If you’ve never used analytics to make business decisions before, believe us when we say that starting can revolutionize your company.
Tons of Competition
A major drawback to selling on Amazon is that while the platform boasts a lot of customers it also boasts a lot of sellers. You may find that a product you’re selling has hundreds of vendors selling the exact same thing.
That creates conditions where price wars ensue, effectively lowering the margins on your sales.
What’s worst is that many times, Amazon will take notice when certain products are doing well on its platform and start selling those products itself. You’ll find it near impossible to compete with Amazon if they choose to move into your lane.
Selling on Amazon isn’t cheap. You’ll pay fees for sales, using their FBA service, and more.
Fees are also prone to increases which can make it hard to forecast your year.
The Pros and Cons of Selling on Your Website
If hitching your wagon to Amazon doesn’t sound great to you, selling on your own website could be an excellent alternative. As is the case with Amazon, there are pros and cons to managing your own sales platform. Here’s what’s worth considering:
You’ll Probably Pay Less in Fees
Fee headaches alone drive several sellers to delete an Amazon account. When you’re selling through your own website, chances are, you’ll run into less of them.
People that opt to sell through their own websites sometimes make the mistake of thinking doing so will be fee-free. We like to remind those people that hosting fees, domain fees, payment processing fees, and shipping fees all still apply.
Your Website, Your Rules
Selling on Amazon means being controlled by their rules. You have no say in policy shifts, how they showcase your products, or anything else.
When you run your own website, you can do just about anything you’d like!
That level of control can have a massive impact on your ability to showcase your products in their best light.
You Need to Manage Customer Acquisition
The big drawback to having your own website is that nobody has ever heard about it. That means you’ll be in charge of building that awareness and getting people into your digital doors.
There are several ways to accomplish that end including investing in SEO (search engine optimization), buying paid ads, and being active on social media. You might also consider hiring a marketing agency to manage building, at least initial awareness, on your behalf.
Selling Online Is Becoming An Increasingly Viable Means of Making Money
Unbeknownst to many, brick-and-mortar stores still reign supreme when it comes to total sale volumes. We’re seeing that paradigm shift though which has made selling online an increasingly viable means for businesses to make money.
If you came into this post unsure of how best to bring your products to the digital market, we hope you now have clarity on your path.
For those of you that are still struggling to determine what means of online selling might best suit your needs, consider exploring more of the insightful eCommerce content we have available on our blog.