How Amazon Marketplace’s Big Business Tactics Are Supported by Small Business Merchants
In the world of eCommerce, Amazon Marketplace is big business. In fact, as you probably know, it doesn’t get much bigger. The online seller carries everything from couch cushions to baby diapers. Yet, Amazon was a company that started out only selling books. To grow, it needed to quickly and effectively diversify. This allowed Amazon to become the current power player in eCommerce.
The driving force behind Amazon’s ability to diversify was its eCommerce business model. In fact, the company has a number of patents on processes and practices in eCommerce, which represents its current dominance over the market and exemplifies its innovative model. Amazon truly disrupted the world of retail, however it didn’t do it alone.
Small businesses are instrumental in making Amazon’s business model work.
Back in 2000 Amazon allowed the first small businesses to sell merchandise on its platform. Amazon claims that since 2000 it has been instrumental in the success of thousands of small businesses and eCommerce companies. The numbers seem to support the idea that small businesses can find a lot of success by selling on the site.
Amazon Marketplace allows almost anyone to sell almost anything through its platform. A significant portion of items sold on the site now ship from Amazon’s 21 fulfillment centers around the globe, but goods also come from third-party sellers. Products from small businesses account for a large number of these third-party sales, and a massive portion of sales made through Fulfillment by Amazon, which is Amazon’s direct shipping mechanism for third-party sellers.
Are these sales a success for Amazon Marketplace, small businesses, or both? And more importantly, what should your eCommerce company do to ensure success on Amazon actually grows your business?
Where do Small Businesses Stand on Amazon in 2017?
There are well over two million different sellers on Amazon’s Marketplace, the name for Amazon’s third-party selling platform. These sellers represent merchants of every size and product. Even Target is dishing out products on Amazon’s selling platform. Yet, small businesses account for over half of the items sold through the online marketplace. This percentage is a global statistic, not just in the United States or a specific region. Across 130 countries and 11 different marketplaces, small businesses account for over half of all items purchased on the Marketplace.
In 2017, thus far, the number sales on Amazon attributed to small businesses is pretty impressive. Through the end of July, small businesses sold over two billion items via the Amazon Marketplace.
Another indication of small business success is the recent Prime Day. On July 11th, Amazon had a Prime Day. On this specific date, holders of a Prime Membership were able to access thousands of deals and sales offers through the website. As Prime Members already had free shipping and other perks, it is the perfect day to make a big purchase. People who never knew they wanted another big screen television find themselves hitting “Check Out” this past month.
This year, hundreds of thousands of merchants signed on for Prime Day. The deals and discounts were divided by interest, which helped shoppers find more items they loved based on their likes and hobbies. This tactic also helped Amazon Marketplace sell way more stuff. When the dust settled, small businesses sold over 40 million items on July 11th. Overall, this year’s Prime Day represented the biggest yet for the company and its many merchants.
Is Amazon Marketplace “Fool Proof” for Small eCommerce Companies?
The record breaking numbers in 2017 seem to indicate that selling on Amazon Marketplace is not only advisable, but pretty easy. Even the pop up businesses that sell on the website and ship from their garage, not all that unlike Amazon CEO Jeff Bezos did back in 1996, are moving merchandise.
Therefore, it should be simple for your small business to break into this sales channel, right?
Most small businesses actually do find success on Amazon. Over 70% of small businesses say they do or are considering sales on the Amazon Marketplace. Of the small businesses that take the leap, around 60% find that the majority of their sales are eventually derived from Amazon and similar marketplaces. This percentage includes small businesses taking a multi-channel sales approach. While this indicates that selling on Amazon isn’t overly complex for a small eCommerce company, there are still tactics for getting it right.
What Past Successes on Amazon Marketplace Tell Small Businesses Today
With Amazon’s access to over 165 million monthly visitors, the odds are good that buyers will find your product. You can optimize your content on the Amazon Marketplace to increase the odds that a shopper sees your product first. There are two essential criteria, relevance and performance. For a small business new to the Marketplace in 2017, performance is difficult to manipulate. However, relevance is key. Make certain your product title is robust and incorporate a carefully crafted description that hits individual keywords, not phrases.
However, the truth is successfully selling on Amazon Marketplace is mostly about your logistics and integration, rather than specific sales techniques. Think about it, when you place a product on Amazon you don’t have control over the product page, layout, design, branding, or a myriad of other details eCommerce companies worry about on their own website.
Setting yourself apart is that much more difficult. In many ways, your product has to speak for itself among the competition.
What you can control is how well the Amazon Marketplace works with your current eCommerce store. Amazon has an open API, which stands for application program interface. This means the big eCommerce seller allows your Volusion, Shopify, or BigCommerce store to directly interact with the bigger online store’s website. Through this API you can integrate your customized site with the products on Amazon Marketplace.
Also, the Amazon Marketplace makes it easy to ship an item once it is purchased. Around 53% of products are coming from Fulfillment by Amazon, which means the logistics are covered. As for the other 47% of items, monitoring your inventory is essential. An item sold via a separate, online marketplace is one less available through other selling channels. The Amazon API can help you manage this information flow on your digital store, but brick and mortar and other marketplaces need to update as well.
Looking for Advice on Amazon Integration and Sales?
If you are a small eCommerce company struggling with the big world of the Amazon Marketplace, you need some knowledgeable advice.
The team at 1Digital Agency is poised to offer advice and services on all aspects for your eCommerce store, that includes multi-channel selling through Amazon and other marketplaces. Whether you need integration between Amazon and your eCommerce platform, or other marketing advice for making more sales on Amazon, we got you covered. Call us at 888-982-8869.