Should you put your small business on Amazon? Long story short: no. Small businesses selling on Amazon pay exorbitant fees to sell on the platform, spend even more money on pay-to-play advertising, are forced to cede control of their brand and business practices to the mega-retailer, and end up with their products counterfeited and copycatted.
We’ve done the research; keep reading below for the receipts.
Small businesses selling on Amazon pay multiple fees on every single sale: sale-related fees, mandatory seller account fees, and shipping costs. There are also Amazon FBA fees if you decide to store inventory in and ship from their facility — and a whopping 91% of sellers do because the search algorithm favors businesses that do.
You’ll also probably end up paying to advertise on Amazon’s platform. Many small businesses feel that buying ads on Amazon is the only way to rise to the top of search results when you’re competing with thousands of sellers and products on the platform.
Because fees and costs vary by product type, it’s hard to calculate an average percentage per sale, but most small businesses pay 15-20% of their sales to Amazon in referral fees alone, without factoring in any of the other costs associated with doing business on the platform (like those 5 fees we just mentioned!).
You’ve poured your time, energy, heart, and savings into building a brand and products that represent your values, your ingenuity, and your unique point of view. (By the way, this audacity is one of the many things we love the very most about small business owners.)
Which is exactly why we don’t want to see you get backed into a corner by a mega-retailer big enough to demand you do business on their terms. In order to qualify for their popular Prime model, you have to process shipping and returns the way they want them done, store your inventory in and ship from their facilities, and give them the most competitive pricing or risk being deprioritized in search results.
Red Flag alert: Amazon also has access to all of your data on their platform, including pricing, the popularity of your products, and how customers interact with your brand. They use this data to directly compete with your business, allegedly creating copycat products and placing them at the top of search results.
They deny it, but there are credible media investigations of Amazon doing exactly this in other countries. Multiple small businesses in the US allege this behavior too, including a photography gear company that noticed Amazon selling a sling that was a replica of their own signature product, including the product design and even the same exact name.
Absolutely fuming, actually. But if you don’t like something, change it. That’s exactly what we’re doing at goodbuy. We developed the first shopping tool to put small businesses at the front and center of online shopping, reclaiming traffic, customers, and revenue. In our first 11 months, we’ve directed over $1 million away from mega-retailers.
With the goodbuy tool, your products show up on top of mega-retailer results. Shoppers start by searching their desired product on the mega-retailer of their choice, and our goodbuy widget pops up with small business alternatives.
When the shopper selects your product, they’re sent directly to your website to shop. The transaction goes through your point of sale system, is packaged and sent from your facilities, and shipping and returns are on your terms. It’s all you—your values, your vision, your profits.
Why? Because we believe in human-ful shopping experiences and a world where small businesses thrive apart from mega-retailer costs and control. Ready to join us?