Where to sell your products – on Amazon or on your own Website?
Amazon is the largest e-commerce platform in the world, so it is not surprising that it is mentioned often when talking about where to sell online. It’s also not surprising that more businesses ask, “Where to sell my products – on Amazon or on my own Website?“
The answer to that question depends a lot on your business.
In this article all your doubts regarding “Where to sell your products – on Amazon or on your own Website?” will be cleared.
Selling Products on your own sites
What are the pros:
Selling on your website, rather than on Amazon, offers a few benefits, including:
You own your website, which means you have full control over it. From the design of your product page to the checkout process, you approve everything. As the owner of your website, you also eliminate all the competition that comes with rental platforms like Amazon, etc.
If you sell on Amazon, Amazon gives you access to your customers. Even if someone buys your product, they are still an Amazon customer. This arrangement makes it difficult for Amazon sellers to establish relationships with buyers and establish their loyalty.
However, when you sell on your website, your customers are always yours.
Owning your customers (rather than borrowing them from Amazon) allows you to get the most out of digital marketing. With digital marketing, you can use strategies like social media marketing, email marketing, and paid advertising to drive sales from current and future customers.
For example, using email marketing, your business can create a campaign that targets abandoned shopping carts. These emails can persuade users to come back and complete their purchase, helping you generate a second sale.
With customer ownership, you gain access to many strategies to grow your business. By comparison, Amazon limits your business, which can affect your growth and potential in the short and long term.
Like customers, data is also a valuable tool (and perk) for selling on your website.
When you can access analytical data on Amazon, it is not as deep as your site analysis. For example, you can see the details of how long a user spent on a page, as well as when they visited your website.
This data can help you build a better, stronger site that drives more orders and sales.
If you notice that many users are not completing their checkout process, you can experiment with a different checkout experience. For example, instead of multiple steps, you can make the payment a single step, thus improving your order completion rate.
Of course, to take advantage of this perk, you need to look at your data, analyze it, and take action.
What are the cons:
When you convert your site into your marketplace, you take on all the responsibilities of managing and maintaining a website. Keeping your site up and running for your business, from choosing a web host to adding a new product page.
For many SMBs, website maintenance and management is a serious problem.
Most don’t have an in-house development team, which can lead to a sloppy site and dissatisfied buyers. However, you can solve this problem by working with a web development agency. They can serve as your team and take care of your e-commerce website.
The decision to sell on your website versus Amazon requires an immediate and substantial investment.
Due to the perspective, you need to build your site, a professional e-commerce website can cost anywhere from $12,000 to $150,000. This price is much higher than starting the Amazon store.
However, you must compare the benefits of selling on your website.
While Amazon offers great reach, your site’s reach is not that great initially.
When you start your site, no one will know. While you can share your website with social media, as well as with friends and family, you will need a strategy to increase your reach if you want your business to survive.
If you want people to search your website, then you must take the help of a search engine optimization (SEO) agency.
Like Amazon, you want to appear on the first page of results so that search engines can drive traffic directly to your site. You may be aware that 95% of traffic goes to the first page, and most users click on the first three results.
If you can invest in SEO, which takes three to six months to work, you can counter this demerit of selling on your website. Like website maintenance and management, you can hire an SEO agency to take care of your SEO.
Selling Products on amazon
Amazon offers a number of features to companies who want to become professional sellers on the platform:
What are the pros:
What’s the reach?
- Not less than 40% of online sales come from Amazon.
- Sell on Amazon and your business can reach a large audience of buyers. Amazon reportedly has more than 300 million user accounts, as well as more than 100 million Amazon Prime members.
- Overnight, people can start looking for (and buying) your products.
- Approximately 90% of buyers will search for a product on Amazon, even though they have found that product elsewhere.
- Amazon also provides access to an audience with a transaction mind-set.
- People want to buy a product on Amazon. When they visit Amazon, they are researching, comparing, and ordering. One study also found that nine out of ten consumers would search for a product on Amazon, even if they found the product on another site.
- Becoming a seller on Amazon allows your business to focus on the people who want to buy.
- In perspective, about 50% of people buy something on Amazon once a month. It is a frequent place to shop. Whether people shop once or regularly (think to subscribe and save), Amazon is where they go.
- The best thing is that merchants buy from sellers. In fact, 50% of Amazon sales are from sellers.
- For many companies, Amazon is also convenient, compared to selling on their website.
- Amazon takes care of all the maintenance, costs, and administration that goes into running an e-commerce site. You don’t have to worry about web hosting or redesign. When you sell on Amazon, Amazon takes care of those tasks.
- For example, Amazon is responsible for:
- Maintenance of Amazon.com and Seller Central
- Keep product listings on the site and Amazon.com live and accessible
- Provide secure shopping, ordering, and seller experience
- Distribution of advertisements and seller payments
- Offer support to the seller
- Troubleshooting customer service issues specific to the Amazon.com site
- You can also outsource Amazon functions, such as Fulfilment by Amazon (FBA).
- With FBA, you can go through the process of completing orders and shipping responsibility to Amazon, as well as handling returns. Marketing and advertising are also to-dos, which you can hire like an Amazon agency.
- Choosing to sell on your website instead of Amazon can also provide protection for your brand.
- With the Amazon Brand Registry, your business can get protection against counterfeit versions of your products. You can also report copycat sellers. This program helps your business protect its brand and increase its sales.
- By comparison, outside of Amazon, your business must monitor and protect its own brand.
- More than a million other small and medium-sized businesses (SMEs) sell on Amazon.
- This great community serves as a great resource for your business, with many businesses selling on Amazon. Amazon maintains a seller forum through which you can also connect with these companies. Ask questions to get advice on this forum and more.
What are the cons:
Selling on Amazon is far from perfect. The platform has a few downsides, including:
- Remember how over a million other businesses sell on Amazon? This is also a negative aspect of the site.
- Depending on your industry and products, you have to compete with a significant number of sellers, which can make it harder to win on the platform. Even if you invest in product optimization and pay-per-click advertising, you might not get the results you want from Amazon.
- Intense competition at Amazon also leads to price wars.
- Sellers must maintain competitive prices if they want to rank higher in search results because price serves as a ranking factor for Amazon search results.
- Most buyers (about 64%) click on the first three search results, so if you want to make a profit, your product should appear on the first page of search results. For your business, this means setting competitive prices for your products.
- Before you start selling on Amazon, find out how much competition you have on the platform.
- When discussing the pros and cons of selling on Amazon, many sellers will refer to Amazon.
- Sellers often see Amazon as a problem because the company’s various brands, such as AmazonBasics and AmazonFresh, also sell on the platform. These brands easily get sales because users know (and trust) Amazon.
- Many sellers believe that Amazon also does their brand and product development based on top-selling products from third-party sellers. For example, if you sold a chair, Amazon may develop an AmazonBasics version to sell at a lower price.
- As a direct competitor, it is tough to beat Amazon and requires a marketing and advertising strategy.
Service Charges Amazon Implements
When you sell on Amazon, you will have to pay several different seller fees, including:
A referral fee is your payment to reach an audience of Amazon buyers. The minimum referral fee is 2% per item. Most referral fees are based on percentages, ranging from 6% to 38%, depending on the category of the item. Check the current referral fee here.
You pay a fixed closing fee based on the item price that is paid by the buyer (including any shipping or gift-wrap charges charged by the seller). It is based on the selling price of products and various shipping categories. Check the current closing fee here.
You will be charged 100% of referral fee (if cancelled on or before ESD) / 150% of referral fee (if cancelled after ESD) of the value of items in an order as a Cancellation Charge for seller-fulfilled orders that are cancelled under the following scenarios:
- The order is cancelled by the seller for any reason other than buyer request. (Only cancellations requested by buyers through the Amazon.in website is considered buyer-requested cancellations and will be exempt from the Cancellation Charge.)
- Order is canceled automatically by Amazon because the seller has not shipped and confirmed the shipping of the order within 24 hours of the Estimated Ship Date.
Fulfilment by Amazon fees
While optional, FBA can help you complete your business and optimize customer service. Not to mention, using FBA improves product listing optimization, which can lead to higher rankings and sales. The cost of FBA is highly dependent on price, weight, and type of product.
Amazon is Rented
Amazon is a rented platform, which means your business doesn’t own it.
Instead, you “rent” the website to make online sales. By renting instead of owning your own marketplace, you have less control over your business’s presence on Amazon. Following a basic product listing template, paying fees, and competing with other sellers are all examples of the demerits that come with using a rental platform.
Before deciding between Amazon or your website, review all the pros and cons of selling on Amazon. Or, start with a free merchant account to preview the trade on the platform and its potential value to your business.
Before you decide to sell on Amazon or your website, re-read the pros and cons of selling on your website. Similar to calculating the cost of sales on Amazon, you should also research how much it will cost to start selling on your site and the potential long-term return on investment.
Conclusion: Where to sell your products?
Where you should sell your products depend on your business, market, and products.
For some businesses, selling on Amazon may work well, while others may see the value of selling on their website. You must consider what works best for your business. Look at the pros, cons, and costs, and talk to your team to get their thoughts and ideas.
Yet selling on your own website is better than selling on Amazon as your customers would be your customers and not of amazon, your data will be your data and can’t be viewed by anyone else except you. You are the administrator of your website and not Amazon. You can sell anything which you want without any restrictions. Your security and user’s security would be safe which users want the most while this you don’t get on Amazon. If you sell on your own website, you don’t have to pay Amazon commission on every sale.