Even though it can seem the opposite, the Amazon marketplace is not saturated with products, new vendors continue having growth opportunities. Almost half of the purchases made on Amazon are made to registered companies in the market after 2017. A figure that reveals that the new e-commerce obtain important sales percentages due to having registered with Amazon recently. The key to getting the performance to this marketplace is working on the positioning of different products and monitoring the prices of competition to adapt yourself to them, especially considering the high speed that prices can change at.
To understand these figures you should keep in mind that Amazon continues growing. According to data published by its own company, in the fourth trimester of 2020 sales increase 44% more in the same period than the year before. A situation fostered by the impact of the Covid19 pandemic, that generated a significant increase in online sales. In this context, new niches in the market start to appear that can take advantage of both new vendors and those already consolidated.
In this sense, it has also remained constant that sellers with a greater trajectory have not lost market. Actually, 33% of purchases were made to sellers attached to a platform for more than 5 years. And the numbering is increasing. Because of this, e-commerce should value their Amazon registration as a medium to expand their sales channels and increase their visibility within a greater volume of potential clients.
Advantages and disadvantages of selling on Amazon
When making the decision to enter or not enter into Amazon as a seller it is important to keep in mind its pro and cons:
Advantages: access to a greater data base
One of the main advantages is that through Amazon your products will be available for an ample data base of potential clients. Users that enter the marketplace with a clear intention to purchase and whose acquisition you have barely had to invest resources in. In summary, following its positioning, products are being shown to users that advance the sales funnel, increasing the possibilities of conversion. To these benefits you should add that:
- If it doesn’t respond to your needs, you do not need to create an e-commerce to start selling.
- Users trust in Amazon and in its backup in product purchase
- Amazon facilitates the internationalization of the brand.
- The marketplace guarantees a satisfactory shopping experience to consumers.
Disadvantages: elevated sales quotas
Registration on Amazon implies paying a fixed monthly tariff in function of the selected seller’s bill and the payment of sales quotas for every transaction. These quotas depend on the price of the product, its size, and the category it’s found in. As a whole, it can be a high cost to assume for the brand. Together with the economic disadvantages, the following points can suppose an obstacle for the activity of the brand:
- Amazon constitutes a competitor in and of itself, as the giant sells its own products.
- It should work continuously in the positioning of different items.
- The norms of Amazon oblige sellers to comply with a product quality standard and shipments and responding rapidly to user inquires.
The final decision will depend on the objectives of the e-commerce and its profit margins. At the same time, you should keep in mind that fixing prices on Amazon will condition the volume of sales. The users of the marketplace will be used to its price policy changes and usually are attentive to discounts and offers. In this scenario, the dynamic prices or dynamic pricing can be a good tool to adapt your prices to the constant changes in supply and demand. Help yourself with automized tools so that these changes can be fast and optimal.