Selling on Amazon — Is it for the IT VAR?
Amazon has left Google behind to become the first choice of search engine for product searches. In 2017 Amazon generated $178 billion in sales. The marketplace is designed to make it easy for practically anyone to list products on the site.
Amazon is popular no doubt but is it for the IT value-added reseller?
Let’s look at the advantages of selling on Amazon
1. Huge audience
Amazon is used by more than 2 million customers worldwide that sell more than 2 billion items. Amazon is one of the largest ecommerce markets, having a presence in 100 countries. That is a huge market you can tap into.
2. 55% of product searches begin on Amazon
Amazon has now become the new Google to look for products. Product searches on search engines like Google dropped from 34% to 28%. You lose out if you do not sell on marketplaces like Amazon.
3. Smaller brands gain visibility
Amazon boasts over 54 million members and counting. Selling on Amazon helps smaller brands gain visibility. If you have consistent product names and optimized product description, your products stand a good chance of appearing in product searches.
Consumers not familiar with your brand may see your products in a random product search. And voila, you’ve gained a customer!
What are the disadvantages of selling on Amazon?
1. You’re competing with loads of other sellers on Amazon
When you sell on Amazon you compete with loads of other sellers. The trouble begins when other companies start listing the same products as you, at lower prices. Competition on Amazon is brutal as every seller is after the same piece of the pie.
2. Amazon charges you for every sale
How much Amazon charges you depends on the selling plan you choose. While selling on Amazon referral fees and variable closing fees are subtracted from the overall sale (including selling price and shipping).
• What is an Amazon Referral Fee?
The Amazon Referral Fee is essentially a percentage of your total item price (and gift wrap charges if applicable) that you need to pay Amazon.
• What is Variable Closing Fees?
The Amazon Marketplace variable closing fees are fixed for media products and vary for non-media products. These fees pertain to the shipping details of your sold product.
An IT VAR business runs on very low margins, and hence these fees and charges cut into the profit.
3. You cannot collect customer data
A customer you gain on Amazon is not your customer, it is Amazon’s. You cannot collect customer data which is crucial for marketing and retargeting.
Do I sell on Amazon?
The takeaway here is that an IT VAR cannot have Amazon as their only ecommerce avenue. Having your own ecommerce store is an absolute must. You cannot rely on Amazon for your online presence.
In saying that, you cannot ignore Amazon either. As a value-added reseller, you need to tap into the audience that Amazon provides while having your ecommerce store.
There are many more reasons why an IT reseller should have an ecommerce store vs selling on Amazon. Read the complete article here.
