I've been running my online ecommerce site for ten years and have invested enormous amounts of time, effort and hard-earned cash into the website and software needed to run it.
Recently, however, I was talking to a friend who has just started to sell online and in very few months he's taken his online business from zero to more than 100 orders a day. It took me nearly two years to achieve this landmark. How has he achieved this I hear you ask? The answer is pretty easily actually; he has used Amazon Marketplace as his selling medium and it's working very well for him.
If anybody asked me about setting up online these days I'd say that ecommerce must be a keystone of any business's sales and marketing strategy. However, the cost of entry can be off-putting to many people, unless you consider eBay Shops and Amazon Marketplace. With very little upfront cost you can be up and selling from your spare room within a few days, and in a few months can be generating a sizable income.
For businesses such as my own, there are certain things that act as deterrents to Amazon Marketplace.
- The commission charged by Amazon, which is about 7%
- The time taken to settle your account - about two weeks
- The amount of low-cost product available in competition with my products
- Amazon's own pricing policy, which (at least for me) makes achieving an acceptable margin difficult.
I operate in the consumables market selling printer ink cartridges, where margins are tight and competition is fierce, so for me to give up 7% margin, and more importantly not receive the cash for a couple of weeks, is a definite turn-off.
However, if you are a new business, just starting with an open mind and profitable product range, then checkout the top sellers in the various categories on the Amazon website and you will be absolutely amazed at the diversity and sheer range of products that are selling on there.
Personally, I've never been very comfortable with eBay, but its Shops feature is a similar process.
Don't get too hung up about what you're selling, but make sure you have a big enough margin to cover your costs and see you through the settlement period.
These marketplaces can be a great way to ‘test the water'. Once you're established, it may be time to look at launching a ‘proper' online shop under your own domain. This way you can start to market your own brand, but think long and hard before parting with hard cash for software, designers and hosting, etc. If the marketplace model works for you – don't look to change too quickly.
John Sollars, MD of printer ink retailer Stinkyink.com