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Why SMEs Cannot Afford to Ignore Amazon

by uma

 

By Matthew Peck, CEO, founded Market Rocket

The boom in Covid sales, rocketed brands’ exposure on D2C websites and boosted the Amazon stock prices like no other period in history. In the run up to what is expected to be the longest Black Friday sales period ever, Matthew Peck, CEO of specialist Amazon Marketing Agency, Market Rocket explains that during the most competitive sales period of the year, brands, no Matthewhewer how small or young, simply cannot ignore Amazon. 

Matthew says, “If you have a product, however emotionally, physically or financially invested in it you are, if it is listed on Amazon at a suitable RRP and its sales are directly attributed to you in some way, then I can’t think of a reason why you wouldn’t want to be represented on the biggest consumer marketplace in the world.”

According to Mintel data, around 90% of people in the United Kingdom shop at Amazon, about 70% of people shop on Amazon at least once a month, while 17% use the online marketplace weekly.

Third-party sales on Amazon began in 2000 when the company launched its Marketplace feature. Previously, Amazon controlled all listings on its website, which meant buyers were limited to whatever Amazon happened to have for sale. 

By allowing third-party vendors to list products for sale on Amazon, the company ensured that customers could get anything they were looking for in one convenient place.

Today, independent sales from third-party sellers make up more than half (58%) of Amazon’s total sales. With the level of success enjoyed by these third-party sellers, this number is constantly growing and adding to the already massive selection of products available on the Amazon platform.

One of the counter arguments brand owners have for not selling on Amazon is that it will cannibalise sales on their own web site, where they can earn a better margin, but again Matthew argues that the audiences are very separate and Amazon consumers are Amazon consumers, who don’t visit 20 different websites to purchase 20 different items. They shop on Amazon, which they feel fits nearly all of their requirements, so if you aren’t part of the choice, you are missing out on a lot more sales opportunities. 

Say’s Matthew, “I think the best argument for brands strengthening their position by entering into a relationship with Amazon is the recent move by Apple to sell their products on the platform. They are proof that brands with strong positioning on and off the platform are able to break through the clutter and thrive on Amazon. 

“Apple has created a large, loyal customer base that is interested in buying genuine Apple-branded products. They are used to visiting apple.com or a brand store on the high street, but rather than see Amazon as a threat, Apple are now targeting consumers that use Amazon to search for laptops or smart devices and using their brand position to leverage some of that on-platform audience as well.”  

This is fine, for global brands with the size, wealth and infrastructure of Apple,  but what of smaller, less established businesses who perhaps haven’t tested this marketplace? 

Matthew argues the case for SMEs too. “Yes there are fees for selling on Amazon and margins are important, but the alternative is to create an ecommerce site, build a strong brand, drive sales by paying for Google or Facebook advertising and investing in SEO over a long period. All of these expenses add up, whereas Amazon charges a fixed fee, which if you factor in fulfilment by Amazon (FBA) that removes a lot of expensive storage, logistics and distribution costs, it represents a really good deal.”

Due to Amazon’s global reach and surging popularity, competition can be fierce for newer sellers who are less equipped for the market. However, with the right Amazon seller tools, savvy niche selection, and a unique product, there is no shortage of profit for solopreneurs or small businesses looking for a new opportunity in 2023. 

About Author:

Matthew Peck, CEO, founded Market Rocket in 2019 along with business partner Mia Briggs following a successful career in e-commerce that saw him create revenues over £50m annually. 

In 2022, Market Rocket was acquired by FMCG investment house S-Ventures to boost the performance of its portfolio of brands.

As a verified Amazon SPN partner, Market Rocket specialises in listing optimisation and full-account management on the Amazon platform as well as offering a diverse range of skills, including PPC advertising, design, SEO and PR off platform. 

 

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