If your small business isn’t selling through Amazon, you’re likely capping your business’s growth.

Amazon has become a household name in America and around the globe. In this time, they’ve built a trustworthy reputation with 89% of customers preferring to buy from Amazon rather than another online retailer

Small and medium businesses in the US are already capitalizing on this trust by selling more than 4000 items per minute.

Want to learn how to leverage Amazon for your small business? Keep reading to find out our story, the pros and cons of selling on Amazon, and more.

Distribution channels for small businesses

The distribution channel a business chooses can make or break their success.

There are three common logistics options when businesses sell online, shipping products themselves, using alternative 3PL solutions, or Amazon.

Let’s break them down:

• Self-fulfillment: Businesses ship products from their own warehouse using their own staff. While this gives you more control over inventory and flexibility, shipping rates and warehouse rent often leave you with very low margins.
• 3PL solutions: Smaller logistics companies often provide better customer service and you don’t need storage space. However, overhead costs tend to still be high and the fulfillment process is more rigid.
• Amazon: Amazon has become a household name with a strong reputation so customers tend to gravitate towards them. However, they charge fees per sale and they aren’t flexible with customer requests. And from my experience, Amazon Seller customer support isn’t that great.

Each of these options can work for your business depending on the type of inventory you sell and where your business is based. For our business, though. We decided to start using Amazon to fulfill our products.

How Amazon helped our business

As a small business looking to grow its revenue, we chose Amazon as the platform to drive growth.

Why?

• They’re always improving their logistics and services.
• Potential customers are already in the “Amazon has everything” mindset.
• Amazon is continually expanding worldwide and around 33% of the US population has Amazon Prime.

These factors helped us increase our sales in the US and helped us expand our customer base in Europe. In fact, Amazon sales now account for roughly 33% of our business’s revenue. If we didn’t decide to leverage Amazon’s marketplace, we’d be missing a big chunk of revenue right now.

Amazon helped us by:

• Providing customers that already have customer accounts, and are familiar with their platform, purchasing policies, and brand.
• Taking responsibility for the entire sales process including packing, shipping, taking payments, and paying sales taxes. While they do take a fee, the services they provide are worth it.
• Allowing us to sell internationally without the headache of reviewing each country’s regulations and shipping policies.

For us, the fees that Amazon charges are well worth the benefits they provide.

What to be aware of when selling on Amazon

Our journey with Amazon hasn’t been without its problems, though. That’s why there are a few things that you should be aware of before you begin selling with them.

Such as:

• Amazon’s processes: When you’re first getting started it’s easy to make mistakes with your listing. The problem is, Amazon’s review process can take a while so your listings aren’t updated quickly. There are also long wait times for opening claims or complaints.
• Seller Central customer service: I can’t speak for everyone but, personally, customer service for sellers can definitely be improved. I’ve spent hours addressing certain issues where Amazon has misplaced our products.
• It’s not worth it for every business: Before you start selling on Amazon, you’ll need to consider the products you sell and the fees that Amazon will charge for them. In particular, low-margin products are not great for Amazon.
• Amazon has control: You have to remember that Amazon sets the rules and you are just along for the ride. They’ll control payments, the entire sales process, inventory, and how you communicate with your customers.
• Amazon Prime isn’t that great outside the US: Amazon Prime in places like Europe and Canada still has some kinks to work out in their services. However, US services are excellent.
• Choose the right fulfillment solution: Amazon offers multiple solutions so make sure you choose the right one for your business. For example, using Amazon as a 3PL wasn’t so great, however, Amazon Prime is where we struck gold.

Before you begin selling on Amazon, make sure you consider the points above. While Amazon has worked out great for our business, the products you sell may require another avenue.

Start growing your business’s revenue today

Whether you leverage Amazon or another fulfillment option, make sure it’s the right one for your business. Make sure you do the research and reflect on the pros and cons of each option. But if you haven’t yet considered Amazon for your fulfillment, now’s the time to do it.