Amazon is the most visited marketplace worldwide, standing out from its competitors in terms of traffic. To give you an idea, in 2023, Amazon Marketplace received around 5 billion monthly visits, while its closest competitor, eBay, did not reach 1.2 billion. Many items of all kinds are sold on it, offering buyers an intuitive platform with speedy delivery on many of its items.
Selling on Amazon Marketplace also has many advantages. Still, many brands and sellers rush to sell on this platform, thinking that it is the best option when, in reality, not everything that glitters is gold. And that is why we have written this article.
We want to lay all the cards on the table so that you can objectively assess whether Amazon Marketplaces is an exciting site for your business. To do so, we have compiled the most crucial advantages and disadvantages of selling on Amazon Marketplace. But that’s not all; we have also compared the platform with other huge marketplaces so that you can see different possibilities. Shall we begin?
Pros of selling on Amazon Marketplace
Access to a global audience
As we have already said, Amazon is the most visited marketplace worldwide. This means that you will be able to reach a large audience without making substantial marketing efforts. Also, this platform, with a global presence, will make it easier for you to sell internationally.
This great reach is associated with the possibility of increasing your number of sales and, therefore, your profits. Without going any further, the annual sales volume on Amazon Marketplace exceeded 574 billion US dollars in 2023, which continues to grow.
Sales and logistics infrastructure
Amazon not only does part of the marketing for you, but it also helps you with all the logistics. For starters, as it is a marketplace, you don’t have to worry about developing an e-commerce site, with all the expense this entails. In addition, you can delegate the issue of storage, shipping, and returns to the company itself since Amazon has up to 100 warehouses spread across the world.
To do this, you must join the FBA (Fulfillment by Amazon) program, which, although it has an extra cost, is profitable for many companies, and it is worth delegating this aspect of their business as it is cheaper than carrying out the logistics on their own. In addition, the advantage of belonging to this program is that you will automatically enter the Amazon Prime Shipping rating on the platform and have priority in the Buy Box. Both things even help significantly to boost sales.
Amazon Tools and Support
In addition to offering excellent customer service, Amazon Marketplace has a seller support team that enhances your experience and helps you do well on the platform.
It provides excellent support when it comes to managing operations on the platform. But, in addition to offering human help, the marketplace also has a seller support blog where brands can find posts that address different topics and issues that brands may have on the platform.
There is even a forum where sellers can chat and help each other. This is very valuable, as few marketplaces have so much helpful content.
Cons of selling on Amazon Marketplace
Amazon costs and commissions
All marketplaces charge commissions and sales costs for each product sold, but compared to other competing options, Amazon’s can be higher.
In this marketplace, you pay a percentage for each sale you make through the platform. Therefore, one thing you should make sure of is setting prices with which your profit margin is high enough.
Amazon commissions range from 7% to 15% of sales, depending on the sector your item belongs to. In addition, you must pay the price of the plan you have chosen per month or sale.
That is why brands or businesses selling products at a meager price will need to expand their catalogue or sell higher-value products to make it profitable to sell in the marketplace.
High competition and visibility
Amazon, being the most visited marketplace and the one that collects the most money worldwide, has two sides to it: fighting for visibility becomes a real battle. To increase your positioning and, therefore, your visibility on the platform, you must develop a good SEO strategy, have good reviews, good shipping times, competitive prices (for which we advise you to formulate repricing strategies ) and respond quickly to customer questions.
You must remember that on the platform, you are competing not only with national companies in your same sector but also with international ones, so you must broaden your vision when selling on Amazon Marketplace.
Dependency on Amazon policies
Although this is something that the platform shares with other marketplaces, it is true that when selling on third-party sites, you are at the mercy of the changes that the company makes in its environment and in its policy, to which you must adapt if you want to continue doing business there. For example, if you’re going to sell on Amazon, you must consider its Product Safety Regulations.
This is no small matter, as these types of modifications can significantly alter the dynamics of your company and force you to make changes that can cost you time and money. Therefore, you must consider this fact, especially if you are wondering whether to sell or continue selling on platforms of this type instead of opening your own online store.