I often speak out against Amazon’s unjust Seller practices, so I frequently get asked by Sellers, brands, and reporters alike. “Jason, if you dislike Amazon so much, why do you tell product companies that they must sell there?”
Before I explain myself, it’s worth noting that I was once Amazon’s biggest fan. They were growing fast, offering great solutions, and helping me grow my business. If I had an issue with a product listing or with my seller account, a helpful Amazon staff member or category manager was an email or a phone call away. However, today, anyone who sells there will tell you this is no longer the case.
Why do I recommend selling on Amazon?
Amazon is now the internet of products. More than half of U.S online sales happen there. The majority of U.S. households have a Prime shopping account. Amazon has 150 million global subscribers, with 126 million in the U.S. alone. Roughly 60% of online shoppers begin product searches on Amazon.com. Google garners approximately 35% of product searches, but type in any product name in a Google search bar and count the number of first-page search results links pointing to Amazon.com. It’s not unusual to see as many as 50% to 75% of searches directed to Amazon.com listings, especially if you count the number of affiliates in Google Search results, which drive traffic to Amazon products from their content websites. Let’s be honest. Amazon won eCommerce in the United States, and if you’re not on Amazon, you’re not online.
I don’t always hate Amazon, and yes, I’m a Prime member
I love the convenience of ordering from my phone and having items arrive at my doorstep in one or two days, and so does every other Amazon Prime Member. Our clients regularly give us use-cases where they run TV ad campaigns with deep discount offers on their websites. Every time one of these ad campaigns runs their Amazon sales spike. Not only do they spike, their sales spike at a higher price than those listed on their website at a discount. That’s right; Amazon shoppers are willing to pay MORE for the convenience that Amazon provides. Brands not currently selling on Amazon that are spending on ad traffic anywhere else (Facebook, Google, TV, Print) is likely driving sales to smart competitor Amazon Sellers. Sellers who may be advertising your brand name to drive traffic to their product. Anecdotally, we see this every day. Half of all first clicks for product purchases, no matter where that first click comes from, end on Amazon.com.
Amazon executives are the only ones denying Amazon’s evident market power
So yes, I do recommend that every product company sell their products on Amazon. However, I suggest they do so smartly with the right strategy. The strategy we outline in our book, The Amazon Jungle, includes being a Third Party Seller (3P) and selling on Amazon rather than selling to Amazon as a First Party (1P) Seller. Your brand should also be the only seller of your product on Amazon so that you can protect your listings, maintain your retail prices, and put your brand in the best possible light. Lastly, we recommend having the right mentality regarding your Amazon selling journey. Know this. Amazon is a Do-it-Yourself selling platform, and they will not lift a finger to help you succeed. They also won’t quickly help you when things go wrong, even if what “went wrong” is their fault. Amazon grew on the premise that they would grow with Other People’s Work (OPW), and knowing this before you begin will help you as you grow.
I don’t like how Amazon, either accidentally or on purpose, treats small businesses, and I don’t like that Amazon Sellers are dependent upon Amazon. However, there is a way to succeed and, in fact, thrive as an Amazon Seller. You may just need the right guide.