For quite some time, the world of e-commerce has been the target of hate for the downfall of small businesses. But of all the e-commerce businesses around, Amazon is the target with the worst reputation.

This disruption of retail and small businesses from e-commerce (mainly Amazon) is what’s known as the “Amazon Effect.”

True enough, this retail giant, accounted for $63.4 billion in sales in the second quarter of 2019, according to Forbes, but did it really hurt or help small businesses? The reason Amazon has such a bad rap is typical because people don’t know what Amazon really is or does, and small business owners take the wrong approach with Amazon.

People have no clue what Amazon is or what it does behind the scenes…

For most people, when they’re looking up gift ideas or funny coffee mugs, they’ll hop right on Amazon and shop for all their heart’s desires… They enjoy the free or two-day shipping options and stare in amazement that anything they want, they can get through the site. But the moment they run across an article talking about how Amazon has stolen jobs from numerous hard-working Americans, they’re quick to share the negative information. All people see is the bad, without realizing that the reality is not as harsh as it may seem.

As of 2020, Amazon currently employs 840,000 workers. Not only is this e-commerce giant providing a virtual storefront for many small business owners, but it also provides hundreds of thousands of work opportunities for people in their corporate offices as well as their many warehouses.

Business owners take the wrong approach to Amazon…Whether you’re a budding or seasoned small business owner, your approach to increasing your sales, as it pertains to Amazon, is what will make or break your success.

All too often, small business owners enter the world of e-commerce with the idea of selling more than Amazon. Of course, entrepreneurship comes with an extremely competitive market, but when you set your competition level to “Amazon level,” you’re never going to achieve the result you’re hoping for in the timeframe you’ve given yourself. For one, Amazon has been in operation since 1994… that’s a long time to achieve the level of success that this at. Secondly, business owners need to change their mindsets and attitudes towards Amazon to see the real benefits it provides to small businesses. The company’s 2019 Small Business Impact Report tells us that 1.9 million businesses use Amazon to grow their business…

In fact, an Insureon poll revealed that over two-thirds of small business owners who sell products on the site stated that the e-commerce giant positively impacted their business…The bottom line is that your end goal doesn’t have to be to beat Amazon, instead, consider seeing how it can actually benefit your business like it’s helping other small businesses.

Amazon Can Work For Your Business or Against Your Business

Amazon can be your friend or your foe; It can work for your business or against it, and it’s going to be in the best interest of your business for Amazon to work for your business.

In case you weren’t aware, in May of this year, Amazon had around 2.5 billion visitors to its site. Becoming a merchant would give your business and product listings exposure to that level of potential sales. Now, imagine having that type of exposure and significantly profiting from it… Your opinion and attitude towards the e-commerce giant would completely change, wouldn’t it?

Amazon isn’t this monster corporation out to “get” small businesses; they’re out to help small businesses, actually. True enough, to be a successful merchant, you’ll have to do your research in choosing products that sell well on Amazon, devise an effective marketing strategy, and make sure you’re fully aware of all Amazon seller fees, but when your hard work pays off, you’ll look at the mega-company with a little more appreciation.

Impact of the “Amazon Effect”

There’s certainly no denying the fact that Amazon has made a huge impact on how the world buys and sells products. Some would argue that where the confusion lies is in whether the impact has been good or bad… Others would argue that there is no confusion, but rather a matter of “survival of the fittest.”

In the business economy, there’s always going to be some kind of pivot that brings about a learning curve for all businesses, and it just so happened that Amazon was one of those major learning curves. Knowing that, it’s up to smaller businesses to figure out how to make it through that curve or else fall off the cliff.

For the small businesses that have survived and know how to work with Amazon for the growth of your business, your entrepreneurial future looks pretty bright. You can enjoy continued success in making sales from anywhere in the world for many years to come.

Amazon is currently the largest online marketplace in the world.

It offers third-party sellers the opportunity to get involved with a brand that makes more than $150 billion in sales on a yearly basis. But unlike open-ended marketplaces such as eBay or Facebook Marketplace, there are several rules and regulations to be aware of if you want to get approved as a seller on Amazon.

To help you get ready for selling on Amazon, keep reading to find out more about the main things that you will need to know.

Should You Sell on Amazon?

The first thing to consider isn’t about how to sell on Amazon, but whether or not it is the right marketplace for you to sell on. Amazon is a marketplace that is huge and very active with customers. However, before you dive in, it’s important to know that there are some seller types that tend to perform better on this site in comparison to others. Because of this, there are some situations where opening an Amazon seller account might not be a beneficial move. On the other hand, some categories of sellers tend to do quite well on this platform. These are:

  • Refurbished and Used: There’s a huge opportunity for sellers in a lot of Amazon categories to sell used products, refurbished goods, or non-new items.
  • Niche Items: Amazon might be an ideal platform for you to consider if the items that you sell are difficult to find or are only desirable to a small target market. This is because Amazon themselves are unlikely to carry these items, and the limited competition will make it an ideal platform choice for you.
  • Unique Items: If you make handmade, unique items or manufacture goods that are not in large distribution channels, Amazon offers a great way to get your products out there by leveraging its huge online platform.

If you decide to stick with selling on Amazon, then it’s also worth considering using other outlets. When buying your products on Amazon, expect customers to research your brand and look it up outside of the platform. An established brand with an eCommerce website can be useful in helping potential customers make a purchase decision.

Fulfillment by Amazon

There’s a lot of information out there on setting up an FBA business and how to market your FBA business. FBA or Fulfilment by Amazon is an area where this online marketplace outperforms its competitors when it comes to recruiting third-party vendors. It allows merchants to stock their goods in Amazon fulfillment centers. When users purchase them, they are then shipped out through the Prime program, offering faster shipping and more customer satisfaction. This allows you to leverage Amazon’s logistics infrastructure and focus on building your business rather than the specifics of shipping and handling. While FBA is a major benefit to your Amazon seller business, it’s important to be aware of the several requirements you will need to meet before you can sign up.

Shipping Requirements

If you decide not to use FBA or can’t for any reason, you’ll need to be aware of the shipping requirements and restrictions for first-time Amazon sellers. For example, you will not be able to offer two-day shipping until you have built up a solid history of reliable shipping windows and good customer reviews on your Amazon shop. Along with this, you will also need to ensure that you provide accurate product details, including the shipping materials that you use. Shipping calculations by Amazon are automated and based on location and package size, so it’s important to be accurate here as any mistakes could cause you to lose revenue.

Sales Tax

Sales tax collection wasn’t a big concern in the early days of Amazon as a third-party online marketplace. However, these days, sales tax is something that all vendors need to know about and be prepared for. In June 2018, the Supreme Court decision led to more states implementing affiliate nexus laws, which require all Amazon sellers to collect sales tax on their sales no matter the vendor location. The implementation of marketplace facilitator laws, which require sales taxes to be collected by Amazon on behalf of many of their third-party sellers, means that it is important for you to be aware of which states require collection, which don’t, and which require you to register for sales tax collection.

When it comes to setting up and growing a successful eCommerce business, there are few tools that have such a large reach and are as powerful as Amazon. Whether you are considering starting a new eCommerce business, already have an eCommerce site, or want to launch a company selling unique or specialty items, becoming a seller on Amazon Marketplace can be an ideal way to quickly grow your audience reach and start building your business.

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