Struggles of selling on Amazon

A large number of sellers sell on Amazon. While some are able to grow sales on Amazon, a major share of sellers are not able to even get views for their products. Below are the major struggles of increasing sales on Amazon:

Acquired Customers are Amazon’s Customers

The customer data is retained by marketplaces like Amazon and not shared with the sellers (in most cases). Hence, the customers so acquired become a part of the Amazon’s Database while you have little knowledge about who your end customers are. This creates difficulty in understanding the correct customer segments and their needs to help drive product & sales innovation. You cannot reach out to these customers for their feedback, communicating offers, sending marketing communications like, newsletters,etc.Moreover, the buying experience is related to Amazon and not necessarily your product. Tomorrow if they need a similar product, they might experiment with the highest- ranking & rated product under the given category.

Low Barriers to Entry

A new seller can join on any given day and replace the products that you sell on Amazon with a similar or slightly better product, at a price just slightly lesser than yours. And once their product sells higher for a time period, it can easily replace your ranking in the category page.

Payouts limited to once a week(in most cases)

For most sellers, the payouts are delayed by a week to take into consideration the revenue, cost & returns. However, on your own brand eCommerce brand store, the amount is credited to your account as soon as the order is placed for all prepaid orders.

High Competition

As there are multiple sellers selling the same or similar products, there is always a high competition and even a small difference in pricing might make a huge difference in conversions & revenue

Risk of stock being deemed unsellable or restricted at any point in time

Amazon can restrict the sales of any good at any time basis the customer feedback, return percentage, company policy, etc. at any given point in time.

Expensive & Complicated

The % share of revenue given to Amazon (as per category)along with the added costs for shipping, lost in transit & returns turn out to be much higher than expected. Also, if you utilize the FBA(Fulfillment by Amazon) service you pay not only for fulfilling but also for storage. If you let your inventory sit too long, you could be faced with high storage fees.

Threat of Counterfeits

As the sellers are free to upload and sell any product, there might be other sellers selling counterfeits of your products. You could make extra efforts and report such sellers and products however, once a customer has had a bad experience with any product, they might not be comfortable with buying it online again. Due to this reason, many brands explicitly call out their brand eCommerce website as the only authentic shop to buy their products. Hence, it is more critical than ever to set up your brand eCommerce website to take charge of your brand communication, offering, messaging, cost and customer cohorts to provide the best customer experience and grow the online business. Contact us today to help set up an eCommerce store that focuses on online branding and revenue growth.

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