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Is Amazon The Best E-Commerce Platform For Your Business? 15 Things To Keep In Mind


Because of its international presence and billions of dollars in net sales, Amazon is often viewed as a desirable platform for online sellers. The popularity of Amazon, combined with the ease with which consumers can purchase goods, may convince entrepreneurs that it’s the best e-commerce channel for their business.

However, every platform, including Amazon, has its pros and cons. Below, a panel of Forbes Business Council members shared 15 important considerations entrepreneurs should be wary of when determining if Amazon is the best platform for them.

1. Responsibility And Liability Is Your Own

There are many pros to doing business on Amazon but entrepreneurs should be aware that the responsibility (and liability) is theirs for quality control and testing to ensure the products being sold are safe for consumers. An often overlooked step is investing in quality management. By doing so, businesses can help safeguard themselves while also keeping consumers out of harm’s way. – Sebastien breteau, QIMA

2. You Won’t Get Customer Information

If your goal is to simply get the most physical goods out the door, Amazon is the right platform for you. If you want to build a long-term brand and a customer base, Amazon should not be your only distribution channel. Amazon gives you no customer information about the people that buy from you, making it difficult to market to them in the future. – Matthew Paulson, MarketBeat

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3. Competition Is High

It’s important to have two elements in place when selling on Amazon: a customer support strategy and drip campaigns to touch the clients with value. Also, add resources, requests for reviews, discounts and reasons for them to keep buying from you. Competition is tough but having a strong customer support and marketing program in place will help you rise to the top of Amazon while creating repeat customers. – Emilia D’Anzica, Growth Molecules

4. You Need A Clear Value Proposition First

You need to be clear of the value proposition and whether Amazon is the best place for you to differentiate yourself amongst competitors. Once it’s on Amazon, you’re inviting all sorts of competitors from different regions of the world. If your product is not well-positioned—either via features, prices or other specifications—then you’re just giving away the first mover’s advantage. – Carl Hung, Season Group

5. Flexibility Is Lost

What comes with a megalith like Amazon is an inability to be flexible, which is critical for smaller sellers. You need to be agile when smaller—and a platform like Amazon is not going to provide that. Amazon takes a large percentage cut out of your margin for what they offer to support their infrastructure. Smaller, more independent distribution channels will give more flexibility in the long run. – Jason Van Camp, Mission Six Zero

6. You’ll Have Great Customer Service Support

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Amazon has consolidated the local market shopping experience. Now, you can simply go online to price compare and purchase. It’s all about the experience so it is really about how you position your products in the market and clearly address their benefits. The convenience factor is what continues to drive the customer to shop online, so having great customer service support is key. – Abigail Aboitiz, 247 Health Solution LLC

7. It’s Difficult To Differentiate Products

How strong or how niche is your brand? It might not be wise to sell on Amazon if you have a strong or niche brand as it would be difficult to differentiate your products with lower quality products due to limited presentation features available. When you run your own website, you have unlimited flexibility in how you want to present your products and your brands. – Steve Suryadinata, Mata Investments

8. There Can Be Hefty Fees

Amazon is a phenomenal marketplace to do business. You can launch a product or even your own book without the traditional costs associated with a product launch. It is important to be completely clear on the fees—they can be the difference between profit and loss. Also, you need to ensure you have a customer service champion to respond to messages in the time frame specified by Amazon. – Shaz Memon, Digimax Dental

9. You May Lose The Benefit Of Diversification

If you go all-in on Amazon, you lose the benefit of diversification. If you sell with Shopify, for example, it’s much easier to advertise on Facebook, Twitter, the Open Web and any new platforms that ascend and use their algorithms to drive sales. If you focus on Amazon, your primary sales platform is only Amazon. They control a lot about your business, including where you advertise. – Robert Brill, BrillMedia.co

10. It Costs Money To Get Exposure

One drawback to consider is the associated expense you’ll incur to get exposure. Seller fees vary by marketplace but typically include a very long list. For some smaller retailers, the marketplace costs never outweigh the profits. Furthermore, these marketplaces are strategically changing the playing field all the time, so sellers can’t keep up a good thing (sales) once they’ve found success. – Amy Bourne, Brad’s Deals

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11. Understand How To Measure Important Metrics

Technically, Amazon is just another marketing channel. Before you start using any new channel for your product, you need to have an understanding of how to measure the most important metrics for this channel like customer acquisition cost, annual contract value, conversion rates and more. Without them, it’s easy to invest a lot into the promotion on Amazon while another channel might be cheaper and better for the product. – Vladimir Lugovsky, Akveo

12. Amazon May Overshadow Your Brand

Competition is healthy for the economy. If we continue to let Amazon gain power over all industries, our choices go away. While they seem like the convenient one-stop shop for everything, from books to healthcare, what happens when they have put all small businesses out of business and they are the only choice? The brand becomes Amazon, not your company, and you now work for them. – Jennifer Coy, Beauty Care Choices

13. Don’t Dismiss Help

Being in the book industry, I deal with this daily. Amazon is a giant when it comes to book sales and it would be dismissive of us to not utilize them as they help us to offer our books globally. However, during the pandemic, books were not prioritized and Amazon affected us directly by unsettling readers. – Karen Mc Dermott, Serenity Press Pty Ltd

14. Ensure Costs Can Continue To Be Reduced

Unless an entrepreneur is selling a product where they can control the price and can continue to produce a healthy profit, one should ensure before entering Amazon that they are able to continue to reduce the costs associated with selling their product. Competitors will begin to reduce their price for the same product. – Salvador Ordorica, The Spanish Group LLC

15. Consider Your Go-To-Market Strategy

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If you have a product and no clear vision of how to enter the U.S., EU or other markets, then platforms like Amazon could be the best first step. It will help to create a heat-map of your sales for the market and refine your strategy. – Sergey Derzap, Amasty

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