What makes Amazon so appealing?
By our estimates there are around 2,000,000 active Amazon sellers.
Why do so many retailers choose Amazon? Keep reading to find out.
The Customers, the Brand and the Platform
The biggest reason why Amazon is so popular should be obvious: the customers and the brand.
Nearly 100 million people make a purchase from Amazon.com every month. And they’re not just buying cheap books. The average Amazon customer spends over $600 per year. And members of the Prime service spend over double that, around $1350 each year.
There’s simply nowhere else that can offer retailers that kind of built-incustomer base.
Then there’s the brand. Amazon is synonymous with huge selection, low prices and great customer service. Other brands, like Walmart, for example, have similar associations, but Amazon ranks much more favorably among consumers. Customers trust Amazon and by extension, the 3rd-party sellers that make up nearly 40% of Amazon’s sales volume. Of course, this is part of the reason why Amazon sets such strict rules and regulations for its 3rd-party merchants.
No matter what line of business you’re in, from books and movies to musical instruments or kitchen accessories, there’s no better way to engage with a huge (and very active) customer base.
Advantages Over Brick & Mortar Stores
Many larger Amazon sellers come from a more traditional retail background. We’ve worked with sellers who previously owned bookstores, record shops, toy stores or other retail establishments.
But over time, most have moved some, or all, of their business onto Amazon.com.
Of course, Amazon’s trusted selling platform and customer base definitely played a major part in their decisions. But there are several other factors that are worth looking at.
Lower Overhead
Think about the costs of running a retail business. You need a storefront A storefront is the page Amazon u… More in a great location, you need to pay employees, you might need a warehouse and tons of other costs that just keep cutting into your bottom line.
But with an Amazon businessAmazon Business is Amazon’s wholesale … More, especially if you’re focused on FBA selling, you can offload many of these to Amazon, often at fraction of the cost. If you’re an FBA seller, your warehouse needs shrink greatly, as most of your product can be stored in one of Amazon’s fulfillment centers. Instead of paying employees to work with customers and manage a store, you can pay Amazon to pick and ship the orders as they come in.
Easy Inventory Growth
When you have a retail bookstore, you’re pretty limited in what you can stock. Sure, you can add some movies and CDs to your inventory, but would it make sense to start selling gourmet grocery items? How many sporting goods stores also stock children’s toys?
On Amazon, you can add whatever you want to your inventory (with limited exceptions in what are called “gated” product categories) and can easily experiment with new products. Customers won’t notice (and if they do, they won’t care) if your inventory is spread among several unrelated categories. They just want great products at great prices.
Increased Scalability
What happens when your small toy store on main street starts growing? Eventually, you may have to uproot all or some of your business to a new, larger location. Or you’ll need to open more stores in other locations. And then your overhead grows along with your business.
When selling on Amazon, scaling is easy. Even if you are fulfilling most of your orders yourself, the cost of adding more warehouse space is much cheaper than adding additional retail storefronts.
And if you need to scale your business down a bit, due to lower inventory levels or other factors, Amazon makes that easy, too. Customers won’t notice empty shelves in your shop. And you won’t be paying for space that you’re not using.
Global Reach
This goes along with the idea of scalability. In addition to Amazon.com, Amazon has marketplaces all over the globe:
- UK – Amazon.co.uk
- Japan – Amazon.co.jp
- Germany – Amazon.de
- France – Amazon.fr
- Italy – Amazon.it
- Spain – Amazon.es
- Canada – Amazon.ca
If you sell products that appeal to a global audience, Amazon makes it easy for you to get them in front of the right customers. And the basics of selling on Amazon are the same. Once you understand selling on Amazon.com, it’s easy to apply that knowledge to selling on Amazon.co.uk. And from there, it’s a simple step to start selling in the rest of Europe or even in Japan. Amazon provides one global selling (and buying) platform.
There’s no way a brick & mortar business can scale and grow globally the same way as an Amazon business.
If you’re interested in learning how you can go global, read more here, or email us.
Flexible Pricing
When you have a brick and mortar retail store, changing prices for individual items in your inventory, or your entire inventory isn’t easy. You can’t run up and down your aisles changing prices every hour as visitors enter or leave your store. Sure, you have sales and offer discounts, but that just isn’t as flexible as selling on Amazon.
With your Amazon inventory, and the right tools, like an intelligent repricing system, your prices can be changed in an instant. You can increase prices as items become more popular or as you face reduced competition. You can reduce prices if a new inventory item doesn’t sell as well as you hoped or if 10 other merchants start stocking the same items.
This point really can’t be stressed enough. When selling on Amazon using intelligent repricing software like Sellery, you have flexibility that brick and mortar retail stores can only dream of. You’ll be able to maximize your profit on the sales you do make and increase your total sales volume at the same time.
Conclusions
If you’re a brick and mortar retailer who was on the fence about selling on Amazon, I hope you can see the advantages that Amazon can offer.
And if you’re already selling on Amazon, but not taking advantage of what the marketplace has to offer, I hope you’ll get in touch with us to learn more about how we can help you get the most out of your Amazon business.
