Originally published on August 2, 2018, updated November 25, 2019
In this guest post, Connor Gillivan of FreeeUp shares how Amazon sellers are impacted by the growing freelance economy.
Amazon continues to grow. Daily there are new products available, more buyers and new sellers. Online shoppers in the U.S. alone spent more than 5 billion dollars buying products during the 2017 Black Friday sales. Last year, in 2017, Amazon sales totaled 44% of ALL eCommerce sales.
Initially, it is possible to run a new Amazon business alone or with a minimum number of workers. There comes a certain growth stage in the business, however, where the Amazon seller cannot cope any longer with the number of day-to-day activities required to run the Amazon business successfully.
The seller needs help if they want to maintain current business and grow the business, as well. Traditionally, it meant hiring more workers. With the emergence of the freelance economy, another option has become available to Amazon sellers. Amazon sellers can solve this dilemma by tapping into this new sector of the workforce.
Hiring more regular workers will lighten the workload, but it creates another dilemma. The variety of tasks are spread across all aspects of the business. It means the Amazon seller will need to hire individuals for the different areas, e.g., bookkeeping, product sourcing, marketing, customer care and so forth. Although all these functions are necessary, there isn’t enough work in each area to keep the newly appointed workers busy.
The variety and specialization of the tasks differ too much for workers to cross over to other areas. For example, there isn’t enough work for a permanent bookkeeper, but the bookkeeper doesn’t have the skills for customer care or marketing. To use the bookkeeper in other areas, onboarding becomes a necessity.
Whether the Amazon seller chooses to hire permanent workers and pay them, even though there’s not enough work for them, or to onboard the new hired workers, it is going to cost them money...an expense the business doesn’t necessarily have the budget for in it’s growing phase.
Outsourcing to freelancers saves the Amazon seller money. Overheads are less when hiring a freelancer because you only pay for the work completed. It’s not a case of hiring someone who needs office space and is paid irrespective of whether there is enough work to keep the person busy.
There are no employee benefits, social security taxes, Medicare or insurance compensation when hiring a freelancer either. Even if the freelancer’s hourly rate is higher than the permanent worker, the business owner is still saving 20-30%.
Outsourcing tasks and assignments to freelancers can immediately free up the business owner's time. Valuable time that can be used to generate new business and to grow even more.
One of the greatest drawbacks as an Amazon seller is having enough time to do everything that needs to be done. The business stagnates, because there isn’t time for activities that will grow the business.
The moment the Amazon seller taps into the freelance workforce, he free ups his time. Hiring a freelance project manager will allow the Amazon seller to work with one individual only, which will free up more time. The freelance project manager can oversee the other freelancers.
Freelancers are experts and specialists in their field. It means minimal onboarding is required; the freelancer often knows more about the specific tasks than the Amazon seller.
The freelancer is building his own business. Satisfied clients help grow a freelancing business. In other words, for the freelancer to expand his business, he needs your business to grow. Hence, the more the freelancer invests his skills in growing your business, the more his business expands. Freelancers know this and therefore stay up to date with the latest skills and technology in their specific niche.
Almost every task an Amazon business needs can be outsourced to a freelancer specialist: product sourcing, bookkeeping, pricing, website, graphics, customer services, data capturing, legal aspects…
One of the most important aspects of growing a business is to know the target market. The more the Amazon seller knows about the buyer, the better he can market the products to the buyer.
To do this, the Amazon seller needs:
Who knows the buyer best? Another buyer. Someone who shops for the same products. Someone who is drawn to the same kind of marketing and networks on the same social media platforms.
More than 80% of millennials who shop online in the U.S. shop at Amazon. Prime members spend almost double what non-members do. Statistics also show that 39% of Prime members are millennials.
Millennial shoppers are currently a large enough buying force to be reckoned with. Their age group varies from 18-38 years old in 2018. They haven’t even reached their midlife yet, and with an average life expectancy of 75 years, they have a lot of buying power for many more years.
What do freelancing millennials and millennial Amazon shoppers have to do with Amazon sellers growing their business?
As of the year 2015, millennials became the largest demographic age group in the workforce. A third is already part of the gig economy as independent workers and 43% millennials and 61% Gen Z plan to leave their company within two years.
Millennial freelancers understand the target market because they are the market. It makes sense that hiring millennial freelancers will help the Amazon seller increase his share in the growing millennial Amazon buyer market.
It’s not just the future buying power of the millennials that is important to Amazon sellers; millennial freelancers are the future for many Amazon sellers who want to grow their business.
Is this only applicable to the millennials? No, the other largest freelance force to reckon with are the baby boomers.
Baby boomers, although reaching retiring age, aren’t ready to retire. Many are ready to start a new career. According to the FreshBooks Self-Employment Report, almost 50% of workers currently freelancing are older than 50 years of age. Another third of baby boomers are ready to freelance when retiring from their current work.
These freelancers are specialists with experience. When hiring such a freelancer, the Amazon seller is hiring a person with years of experience, who understands what it means to work in a team and knows how to do the work. He is also hiring someone who represents buyers who have money to spend.
They will not only help grow the business, but their knowledge and skills are invaluable assets to any business.
The freelance economy is global. Amazon sellers are no longer restricted to hiring local workers. Now they can choose skills and expertise globally. In other words, the Amazon seller can now find the perfect contractor for the specific assignment, even if the freelancer is on the other side of the world.
Certain countries are stronger in specific areas than others. The Philippines, for example, is the number one country for hiring freelance for call centers. Different cultures bring different kinds of experiences and knowledge to freelance. Experience and knowledge the Amazon seller wouldn’t have been exposed to if he hadn’t hired an international freelancer.
Another benefit of global freelancers are the different time zones they represent. With freelancers working in different time zones, an Amazon seller can service customers 24 hours per day. They are no longer restricted to U.S. time zones.
The time it takes to find the right person to hire is one of the main challenges business owners have. Sifting through applications and interviewing potential candidates take time—precious time most Amazon sellers don’t have.
Hiring the wrong worker will cost the business time, money, and even its reputation. But hiring a freelancer has an built-in safety mechanism. Before hiring the freelancer for a large project, the business owner can test the freelancers with a small task. If it doesn’t work out, the seller isn’t stuck with an ‘unwelcome’ worker; he can move on and hire another freelancer.
Various marketplace platforms offer different hiring processes. There are marketplace platforms where freelancers respond to a client’s worker requests. It takes time to work through all the proposals and interviewing possible candidates. Then there are marketplace platforms that pre-vet freelancers and only introduce the likely candidate to the business owner. A short 15-minute interview with one or two freelancers is all that is required to hire the freelancer.
Amazon is growing, and so is the freelance economy. Amazon sellers have a pool of 41 million freelancers in the U.S. alone.
Amazon sellers can now access a workforce that wasn’t available a few years ago. They have millennial freelancers who represent the needs and desires of the younger generation. They also have the baby boomers who add value with their experience and knowledge they’ve acquired throughout the years.
The global freelance workforce expands the growth opportunity of an Amazon business in ways that hiring only local freelancers can’t always accomplish.
The freelance economy has already changed the way people perceive employment, and it will continue to do so. In a few years, the freelance economy will represent the majority of the U.S. workforce.
Originally published on August 2, 2018, updated November 25, 2019
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.