Is Amazon appropriate for us?

amazon, niche business, amazon.com

[skatingtoolman]

I run a niche business. We sell parts for tools. I have been contacted by Amazon to add my products to their site. Is Amazon appropriate for a niche business? Is the work to add products to their site worth the return in $$? We have good organic rankings (top 3). Any thoughts?

[sun818]

If you think you've saturated your current channel, Amazon could supplement your sales. I've heard repeated comments from Amazon Marketplace & Seller Central members that Amazon requirements for customer service are very high (e.g. Amazon buyers are spoiled), so you may need factor this into your prices. Amazon does provide a Windows program that allows you to list through that program. The listing template is fairly complex so you do need to dedicate some time and resources to setting it up.

> Is the work to add products to their site worth the return in $$?

That depends on your current margins and whether Amazon sells the same product or not. When I comparison shop, I know their retail prices on some items are only 5%-10% above wholesale. It might be a good partnership initially, but don't be surprised if they cut you out at some point and deal directly with your suppliers. It only took a year for the items I listed to be undercut.

How do micro businesses compete with the purchasing power of companies like Amazon?

[skatingtoolman]

Sounds as though Amazon uses smaller companies and their hard work to list products as a test basis. If these items sell well, then Amazon simply purchases directly from the mfg. and eliminates you. Not even a "thanks for all your work for us testing this new marekt....".

[ecommerceprofit]

Exactly! What a scam. I'm glad I never signed their merchant agreement - I knew this would happen someday - if I were Jeff Bezos I would never use ma and pa businesses this way - I know business is business but it is pretty scummy to do something like this to smaller merchants. Amazon has enough money already - they know exactly what they are doing. This of course is my opinion and no facts are being stated here - I could be totally wrong in my opinion.

[ispy]

Most things are already on Amazon.

Its hard to believe that they kick small businesses off, though I may be wrong on this point. If they buy directly from the manufacturer then they have to mark up so they are essentially on the same level. You have to pay their fees to list however but this is business not a completely level playing field.

This type of manipulation is often there with big business in one way or another. Saying no I wont join them wont do you much good if your competition is there and they are getting loads of traffic, your just playing martyr.

[skatingtoolman]

What our company sells is not on Amazon. Only a few items are. The last thing I want is for my products to come up in the search engines as Amazon and then everyone else starts adding the same product, but now I have to compete on price. We compete on the service we provide. We never want to be the lowest price around. I guess I answered my own original question.

[ByronM]

Amazon is dog eat dog marketplace.. the only reason i would ever consider going back to amazon is to sell volume. It would never be a profitable marketplace for electronics/games/technology for me but it would be a good place to hopefully break even on volume if you can commit to it. May be able to push enough goods that your volume with your wholesaler makes you more competitive on other less dog eat dog marketplaces or ultimately more competitive on amazon if you can hang out long enough to get your prices down.

The biggest gripe i have is you have to remember to put everything into your base price as you have ABSOLUTELY no control of shipping/handling/specs/weight/dimensions to calculate it otherwise. So in the long run you're more often then not more expensive then amazon itself or the top 5 amazon partners but if you run into the situation below where they're out of stock it can be lucrative.

Amazon is profitable for speculators.. if you know a holiday product is going to be tough to find and you can get a lock on 100 of them and have them listed for some insane cost, the second amazon sells out you will have an order frenzy because some people still believe amazon.com is the only place online to buy stuff but other then that, the fees are HEFTY and ERRATIC and support is TERRRRRRIBLE.

[Rugles]

no control of shipping/handling/specs/weight/dimensions to calculate it otherwise

That is not true. You get to set up your own shipping rates and how its calculated.

To the origonal question. I would say it all depends on if you have enough of a margin on your products. They handle the credit card, so subtract whatever you pay the bank to clear your credit card from the percent Amazon is taking. Then make your decision.

To enter each product individually, allow about a 1/2 hour of work. It will take a shorter period of time after you get used to navigating your way through Seller Central. After you get the product entered, there is very little maintenance to do, mainly just adjusting the inventory and any price changes. Your sales with Amazon will grow over time as the products move higher up the in the searches.

Concerneing the issue of Amazon cutting you out of the loop and going right to your supplier. This can happen. However, there are ways to obfiscate the source and keep Amazon in the dark. Not that i would ever condone such behavior ;-).