Context: Small business that has been around for 40 years selling parts out of a brick and mortar location, and 4 years ago started an online store with great success. Leaving type of parts ambiguous, but think RV/ATV/Marine type stuff.
We’ve noticed costs from domestic suppliers for basic products go up substantially in the past 4 years, so for this coming season we’ve secured a line of lower cost/better value parts from overseas. We plan to re-brand to our own brand name and offer support/parts, and we can charge 80-100% markup on these and still be incredibly competitive with existing name brands.
When comparing our planned pricing to Amazon listings for comparable products, we are set up to be very competitive. We also have the advantage of warehousing in Canada alongside Amazon so we can offer quick shipping, and play into the Canada-ism in our branding.
The internal battle in my head is that we are trying to push our brand and online store, where we keep 100% of the revenue from. But it’s undeniable the impact Amazon has on the market.
We are wondering if it would be worth it to order additional stock to list on Amazon and compete against the other sellers with our value products. I have no experience selling online, and while it must be worth it with all the people doing it, it also wouldn’t be worth it for Amazon if there weren’t some gotchas. So I guess I am wondering
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What are the average fees that it costs to list product on Amazon?
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Does anyone else in a similar position have any experience with this?
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And much broader, would it be worth it for us to list these products on Amazon?
Thanks for any insight you can provide!
You should go for it. What’s the worst that will happen? Things don’t work out? At the very least you tried. And should it take off, you probably would have wished you had started selling on Amazon earlier.
I’d rather have 70% of a watermelon than 100% of a grape.
If you’re selling online and you have any amount of considerable volume, you absolutely should be including amazon in your strategy.
This is my experience and others may vary. I am located in Canada
No. When I tried to dip our companies toes into Amazon the numbers did not make sense. There was only a flat like $6 allowed for shipping costs. Yet my minimum cost to ship was about $18 at the time. So I had to add a further $12 minimum to the sell price. Which kept us competitive price wise. But the second I got orders that were a little further away the cost to ship would jump and it would chew away the profit.
Add in the products I had on there are a bit niche and 95% of the sales were at Xmas it really was not worth the headache so I shut it down. Hindsight it was the correct move because now there are several main sellers doing the same products and they are doing it WAY cheaper than I ever could. Im not even sure how they manage to sell that cheap as their cost cant be any cheaper than mine is.
I was a top level vendor on Amazon a long time ago, before they turned into what they are now. Amazon back then did deals with major retailers to provide depth of product in specific categories. I carried toys. they actually contacted me.
Being a top level meant no matter what I was the top of the search and nobody could compete with me on my products. was great. massive sales
Now it has become the wild west.
the main goal for you should be to drive business to your own website. think of it as a marketing expense at first, where the expense is really just lower margin sales. then do as other said, go have product made in China under your own brand.
Also give them an incentive to buy from your website and not Amazon.
The problem with Amazon is: the customer always wins. so you are taking returns. doing refunds you would not normally do. no point in debating with customers because it is not worth the negative feedback, or even worse Amazon’s dispute process. becomes a waste of your time ( if get enough complaints they take action on you the seller ).
As long as the products you sell are going to be found doing a basic search, and not end up on page 10,000 then it is worth it.
I inherited my dad’s Amazon business. Back in the day, they made $2M in revenue. Today, the landscape is vastly different. Amazon allows direct from manufacturer competition, meaning you’re competing with Chinese sellers direct to consumer. It is not possible to beat them, not with your markup. The only products still sustainable in our store is the stuff we manufacture ourselves, with our own brand registry. Just something to think about.
Look into it, but be cautious - don’t get so deep in that if Amazon suddenly decides to cancel your orders or delay shipping to you, your business will take a critical hit.
It’s much the same issues as with whale clients. If they move suddenly and unexpectedly, and your business is reliant on them to a significant degree, you can find yourself scrambling.
Using Amazon as a non-critical additional resource, though, and making sure to check every six months or so whether it’s accidentally crept up into whale-supplier territory because it’s just so cheap/convenient/reliable/whatever, isn’t necessarily the worst idea.
I sold on Amazon for about 10 years before quitting when Covid hit. Through that time I also sold on my own website.
If you’re trying to build a brand long term, stay away from Amazon. Yes you will get sales but your brand will get diluted and eventually usurped by Amazon if you are successful.
Riding the Amazon wave and quitting when I did was one of the best moves of my life. Was selling roughly $500k (total) per year when I started. $9M when I quit. $30M now.
Happy to provide what other insight I can.
Savage. I’d love to interview you on my podcast if you’re up for it.
I’d love to hear it
This unfortunately is a common business model that Amazon uses. If your products sell well and do good in the market, Amazon will steal your idea and compete directly with you. So many stories of this happening.
Amazon is evil. Never trust a business owned by a billionaire with defense contracts that works directly with the government. Aside from bezoar, ahem ahem, I’m looking at you Free-Lon Sus (Elon).
What are you selling?
The fee schedule can be found in the Amazon Seller site without being logged in. Go digging.
Selling on Amazon stopped being profitable around 2019. Fees eat you up, anything successful will be ripped off by China, they know how to review manipulate, and the customers are not yours they are Amazon’s. Also the worst set of entitled customers you can find. Not worth it.