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As it stands, a little-known company called Amazon is responsible for an astounding 50% of retail sales, making it the world’s largest online retailer. This, along with the fact that 89% of customers claim that they’re more likely to shop through Amazon than anywhere else online makes Amazon marketplace a tempting option indeed for new businesses looking to tap into extensive existing audiences.
Despite this, there’s something of a rumble under the eCommerce retail surface, with new businesses and established names alike increasingly turning away from the Amazon umbrella. Most recently, Ikea has pulled its stock from the site, and it’s one in a long line that includes Birkenstock, Nike, and more.
To some extent, of course, these companies can afford to take this Amazon hit, but even smaller brands are turning away from or altogether omitting Amazon from their sales strategies right now. Even better, many of them are doing so to the tune of increased profits.
With that in mind, anyone looking to make their mark online right now might want to think twice before signing up with this eCommerce giant, and we’re going to consider the reasons why.
# 1 – Your reputation could benefit
Amazon might be doing alright for itself, but that doesn’t change the fact that many customers (especially those in the upcoming millennial generation, which happens to make up the vast majority of online sales,) are publicly boycotting the site. This is due to a range of escalating controversies surrounding the company, including its questionable ethics, industry monopolisation, and shady employment tactics. And, that’s before we even consider that the need for businesses to send their products to Amazon in the first place doubles the carbon footprint of each sale!
The past year, especially, has left customers unimpressed in light of the fact that Amazon somehow managed to double its earnings at a time when most businesses were struggling if not shutting down. While there’s nothing wrong with making hay while the sun shines, there definitely is something wrong with profiting from other people’s struggles, and Amazon has largely missed the mark in that respect.
With all this being said, businesses looking to get younger client bases onside right now could most definitely do with steering clear from this very much dirtied business name. Like being seen at a party with an undesirable acquaintance, getting into bed with Amazon could certainly cost you a fair amount of brownie points.
# 2 – Your money won’t come straight to you
Often, upcoming entrepreneurs assume that collecting money through Amazon will be easier, but it’s rarely the case due to the simple fact that using Amazon’s bank account leaves you over a barrel best avoided.
Most notably, Amazon sellers get stung for fees, including a $39.99 monthly seller’s account fee. As if that weren’t bad enough, each sale is subject to both referral fees and fulfilment fees (for FBA sellers.) So, selling a product for $130 could cost you as much as $35.80 in fees, and that’s before you consider the cost of shipping your products to Amazon in the first place!
To make money matters even worse, money doesn’t come straight out of your Amazon account the way it would from alternative platforms like eBay. Rather, Amazon only release seller funds every two weeks, with a general bank wait time of 3-5 business days to boot.
With all of this in mind, the so-called ease that Amazon brings to the selling process isn’t exactly what it’s set out to be, especially not when you consider that implementing something as simple as your own foreign currency bank account with the help of a company like Airwallex could see you enjoying global payments that land in your account the second customers click ‘buy.’ In fact, you can even link an account like this to software such as Xero to ensure immediate transactions that appear on your accounts in moments.
For new businesses working on a shoestring especially, the need to wait for money and updated account invoices could prove crippling, making self-led alternatives such as these seem like no-brainers, and very much leaving Amazon marketplace out in the cold.
# 3 – What about those loyalty benefits?
In large part, Amazon is behind a great deal of the commoditisation that retailers are having to battle right now, pitching each product against its competitors until all that matters is who offers the best price tag. After all, customers don’t come here to find products that they can get behind. They come here to get bargains from a largely interchangeable group of sellers.
This is bad news considering that loyalty has long been a touchstone for success and lasting profitability. This is a large part of the reason so many businesses are taking to social media right now, and it’s a benefit that you can’t afford to skip considering that word of mouth (only achieved off the back of ongoing and trusting customer relationships,) remains the number one best way to attract new customers that actually convert.
Glossier is yet another brand that has publicly snubbed Amazon, and it’s done so for this exact reason, with founder Emily Weiss stating, “…no woman has ever told me that their criteria for the best mascara was ‘fastest’ or ‘cheapest.’ Instead, the brand relies on making an emotional connection with the customer, capturing their values, and reflecting these values back in the brand’s messaging…”
In other words, companies looking to make a name for themselves could benefit by stepping away from largely in-the-moment Amazon strategies that distract from the loyalty-creating benefits that really stand to differentiate.
# 4 – Putting personalisation off the cards
Speaking of differentiation, a large-scale switch towards personalised products is also leaving Amazon out of favour due to the increasingly limited options they provide along this vein. In fact, far from being able to communicate with buyers and customise products accordingly, brands are entirely limited to drop-down menus that merely cover key features such as changing colours or adding custom photos/text. This makes it harder than ever for new businesses to make a true mark on any industry, leading to escalating price battles that, in many cases, new contenders simply can’t win.
By comparison, companies who step away from Amazon and sell, either on their own pages, or through social media shopfronts, are in a much better position to enter a discourse with all potential leads to ensure products 100% suited to requirements, and 100% unlike anything else on the market. Right now, this differentiation is proving invaluable for many, and it’s only possible by stepping down from the Amazon pedestal.
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Final thoughts
In reality, we aren’t going to sit here and tell you that Amazon selling won’t pay off. Remember, this is the largest retailer in the word, and some success will inevitably come your way off the back of that accolade alone. But, as you can see from these points and the growing dissatisfaction of larger sellers who can afford to turn the other way, Amazon sales aren’t exactly what they’re cut out to be. Specifically, smaller businesses just looking to make their mark in their respective industries may find it better to build their enterprises before entering the Amazon marketplace, if they intend to do so at all.
In reality, though, you might just find that creating loyal, trust-based relationships that come to you because of your brand offerings rather than someone else’s, ensures reliable custom that you don’t need Amazon to achieve after all.
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