Amazon vs Website. Where to Start Selling First?

A decade back retailers were contemplating whether to sell offline or online. However, in this era of digitization, selling your products and services online is a must. Customers today use several touchpoints and paths to research, offer opinions, share experiences, shop, and interact with the brand.

Thus, retailers are selling their products on the channels most frequented by these omnishoppers. In fact, they are capturing bigger and global markets by leveraging online marketplaces like Amazon.

So, the basic question most eCommerce businesses may face is whether to stick to their website or sell on Amazon. On the one hand, you have the world’s largest eCommerce platform and on the other, is your business website that’s solely about you. Plus, you have more control over your website.

The decision is tricky because there’s no denying, Amazon is the leader in the eCommerce realm.

• Amazon has over 200 million Prime members, a jump of 50 million in a year. 
• In the US alone, Amazon enjoys a customer base of 150.6 million mobile users.
• New analysis reveals that a majority of product searches begin on Amazon. 
• In a survey, 89% of buyers shared that they are more likely to buy on Amazon than any other eCommerce site. 
• On average, marketplace sellers in the US sell over 4000 items per minute. 

In this post, we will share the pros and cons of selling on Amazon and your business website to help you make a suitable decision.

Selling on Amazon

Pros

Wide Reach

Amazon is a trusted brand worldwide. The platform offers small and big businesses an opportunity to expand their reach beyond local markets.

In North America alone, Amazon accounts for half of the online sales. Moreover, Amazon is the most visited website globally with a monthly traffic average of almost 3.68 billion visitors in 2020.

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So, you can imagine, selling on Amazon can improve your brand reach to a massive audience of buyer-intent shoppers. You cannot find this kind of access to online shoppers anywhere else.

More Sales 

Since Amazon offers exposure to huge traffic that’s eager to buy, your sales and revenue are bound to increase when selling on this platform. If you’ve adhered to the seller guidelines shared by Amazon and listed your products well, you are bound to generate revenue. 

Amazon’s exceptional product cataloguing system ensures that your inventory is appropriately allocated across locations, enabling shoppers to find your product anywhere.

Increased Convenience 

Amazon is loaded with seller-friendly features that make the platform easier to use when compared to selling on your website. Sellers can not just benefit from Amazon’s paid Google search but also how the eCommerce brand takes care of site maintenance, costs, web hosting, website redesigns, and other aspects of online selling.

Here’s everything that Amazon is responsible for - 

• Maintain the website Amazon.com and Seller Central
• Keep the website and the product listings live and accessible
• Provide a secure shopping and seller experience
• Deliver seller payment and ads
• Offer seller support
• Resolving customer issues on the Amazon.com site

Besides, you can outsource fulfilling and shipping tasks to Fulfillment by Amazon (FBA) to boost the speed of delivery.

Improved Brand Protection 

Amazon Brand Registry offers sellers more control over the products they sell on this platform.

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Here are a few benefits it offers - 

• You can protect your product listings from other sellers.
• It removes fraudulent listings from Amazon, thereby prioritizing your products and increasing sales.
• It offers access to search and reporting tools, thus allowing you to keep track of your products on Amazon.
• It offers the Sponsored Brands option, an ad format that allows you to promote up to three products and makes them appear at the top of the Amazon search results.
  

Access to a Huge Seller Community 

There’s a huge community of 9.5 million Amazon sellers worldwide. This large community is a great resource for your business. You can use the Amazon seller forum to network with these companies, post advice and queries, and share information.

Marketing Is Built In

Amazon is well known for its personalized targeting powered by smart and AI-based positioning.

It’s common for users to see ads based on their recent purchases or views. These personalized ads are a specialty of Amazon. The platform leverages this technique to persuade users to purchase what they’ve viewed or share ratings for products they’ve purchased.

Such features can help sellers boost their customer base and revenue. 

Cons

Intense Competition and Lack of Differentiation between Products

As mentioned above, Amazon has over 9 million sellers on board. Though that’s a plus point, it can also be a downside because of the competition they bring in. Depending on the industry you are in, this huge number of sellers can make it tough for you to sell your product on Amazon.

Further, regardless of your industry, all the competitors (direct and indirect) are shown next to your products. Hence, it’s tough to differentiate your products in such a cluttered market.

High Seller Fees 

When you sell on Amazon, you need to pay several fees. A few are mentioned below. 

Seller plan

The plan allows businesses to sell their products on Amazon. Whether you choose an individual plan or a professional one, you need to pay a fee to get your products up on this eCommerce platform.

Referral fee 

This is a fee for accessing Amazon’s huge audience. 

FBA fee 

Fulfilment by Amazon fee streamlines your order fulfilment and customer service. It also improves your product listing optimization. This cost varies as per product type, price, and weight. 

More fees

Besides the above-mentioned prices, sellers need to pay additional fees, namely closing fees, high-volume listing fees, and others.

Lack of Control

Amazon focuses on products, not sellers. So, you have less control over your sales and brand presence because you need to abide by the rules of this platform. Thus, you have limited means to build your brand presence.

Now that we’ve seen the pros and cons of selling on Amazon, let’s move on to selling products on your website.

Selling on Your website

Pros

It’s an Easy Process

Selling products on your website is effortless. All you have to do is create a personalized store on Wix, Squarespace, or WooCommerce and promote your products there. Most online store builders offer step-by-step instructions, a library of templates and themes, dedicated customer support, and social media integration.

So, whether you are building a whole store or merely a blog to support your business, these website builders have it all. You have complete control of the site, from the product page design to the checkout process.

You Are in the Spotlight

Unlike online marketplaces like Amazon where you need to compete with other brands, your website is all about you. So, there are no distractions like ‘People also viewed’ or ‘Top deals.’ Your customers can easily find what they are looking for and know your brand story.

You can build your online store as the go-to place for your target audience using social media marketing, paid advertising, email marketing, and other strategies.

Higher Brand Presence and Referrals 

When people buy from a marketplace, the brand presence isn’t strong enough. For instance, if someone asks the person where they bought the product from, they’ll share the name of the marketplace and then the brand. 

However, when customers buy from your website, your brand presence is strong. Thus, you are more likely to get referrals.

Moreover, when you sell on Amazon people buy your products because they were using that platform (because of its UX, customer service, fulfilment centres, etc.). So, in a way, they are Amazon customers that you have borrowed.

But when they buy from your website are your customers. You can take complete credit for earning and retaining them.

Finally, this allows you to leverage your digital marketing to generate sales from existing and new customers. For instance, you can use email marketing to persuade customers who have abandoned their shopping carts to come back and complete their purchases. 

More Control on User Experience

User experience is all about offering the best online experience to your customers. When selling products on your website, a big pro is that you can tailor and customize the design and usability of your site to amplify your brand 

This is limited on established ecommerce platforms like Amazon that have a standard UX features for all product listings. So, improving your website UX can give you a serious edge over your competitors. 

Access to Data

Data is invaluable when it comes to online marketing. Though Amazon offers sellers access to data, it isn’t in-depth and specific to a brand.

On the other hand, managing your own website gives you access to specific user data like the time spent by a user on a page, the number of users leaving the checkout process, and more. Thus, you get detailed information on customer shopping habits and behaviour. 

Cons

Website Maintenance Isn’t Easy

Managing a website is tough. From choosing the right website builder and hosting to updating each product page with recent product descriptions, there’s a lot to take care of. 

Most small businesses do not have an in-house website design and development team. So, the responsibility of managing the website can be a pain for these businesses. 

Increased Cost 

Selling products on your website requires a substantial and upfront investment. First, you need to design and develop a professional website, buy good hosting, and spend on various inbound marketing tactics to drive traffic to the website.

Further, if you are paying using a credit card, you need to bear additional costs of credit card processing fees (approximately 2.5 to 3% on the sales). 

By my calculations, the cost of all this is higher compared to selling on Amazon which is a well-established platform with incredible traffic, excellent user experience, and great customer service.

Limited Reach Compared to Amazon

On average, Amazon.com receives 2.5 billion visits per month. This speaks of the massive reach the e-commerce mammoth enjoys. 

When you launch your website, you start at 0 and you’ll have to work your way up to meaningful traffic. Not to mention, driving this kind of traffic using SEO tactics will take time. 

Harder to Build Trust

Since the comparison is with Amazon, the credibility factor must be considered. Amazon is a giant brand with a strong reputation in the eCommerce industry. It is trusted by retailers and customers alike. 

If your online store is relatively new, it may take you some time to establish that kind of credibility, not just in the eyes of customers but also in search engines. 

Final Thoughts

Having seen the pros and cons of each platform - Amazon and your website - we are sure you have some clarity on which one to select to sell your products. 

However, what if we said that it would be best to leverage both these platforms and adopt a multichannel approach? 

We think you should seriously consider this option because it will prove to be a synergistic combination and help you get the best of both worlds. So, go ahead and use these platforms to attract qualified traffic and convert shoppers into repeat customers.