Trend of More Small Businesses Selling Through Amazon
by Joanna Lupo
If you're a small business owner, you know that competition is tough. Not only do you have the day-to-day stresses of managing everything from the books to the marketing campaigns, you may have a lot of other businesses that are competing for the very same customers.
Where does Amazon fit into the business plans of small companies?
Small Businesses in the U.S.
According to a study by Docstoc, as of September 2013 there were 28 million small businesses in the U.S. Among the 5.68 million firms with employees, 99.7% had fewer than 500 workers and 89.8% of those comprised businesses had fewer than 20 workers.
Small businesses have a crucial role in the economy. They create jobs, bring innovation and diversity to communities and even help larger businesses who want to outsource certain services. America’s confidence in small business hit a five-month high in May of 2015, but how do small business owners rise up to the competition and keep pace with the fast-changing digital age?
Small Businesses in the Digital Age
A viable option for many mom-and-pop retail stores could be to sell their goods via the Internet. Selling online reaches a broader audience. The Internet offers a wide range of eCommerce options like Amazon or eBay, among other sites like Etsy. Amazon, for instance, boasts around 65 million U.S. users per month.
Web-based companies often perform better against brick-and-mortar businesses since they generally run on lower operating costs. From a marketing perspective, it might also be easier to get web traffic than foot traffic. Brick-and-mortar stores also have to rely on word of mouth and other traditional strategies, while online businesses can easily tap the massive audience present on eCommerce sites. According to Quarterly Retail eCommerce Sales, there was a 3.5% increase in U.S. retail eCommerce sales in the first quarter of 2015. In-store experience might matter, but the convenience and variety online stores provide is undeniable.
Small businesses have lots of opportunity to leverage the Internet. Small business owners can take a shot at Amazon if they want to take their product sales to another level. Amazon offers a range of business solutions that address the requirements of individual or professional sellers. Getting started on Amazon is pretty straightforward, though starters need to consider their products and business goals.
Types of Accounts
On Amazon, there are two types of seller plans: Individual and Professional. The Individual plan is suited for small merchants with few items. Sellers with large volumes of items to offer can opt for the Professional account.
The main difference between the two accounts is the pricing scheme. Individual sellers pay as they go and are provided with basic tools for product listings and order management. Professionals pay a monthly subscription fee with multiple listing creation provided. More than 20 categories are open to both types of sellers. Professional sellers, however, can request posting on additional categories. For starters, it might make more sense to start as an Individual seller since you will have more control over pricing.
Small business owners may even go further with Fulfillment by Amazon, which allows fulfillment of orders and sharing of inventory with other resellers. FBA does not only pack and ship products for sellers, it also provides customer service.
Are you wondering if Amazon is a fit for your small business? If so, there are tools that will help you get started, and tools we’ve created to help you increase your chances for success on the eCommerce site. Contact us today to learn more.
Originally published on August 26, 2015, updated June 1, 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.