The Benefits of Using Amazon for Your E-Commerce Business

Running an online business involves juggling multiple tasks such as inventory management, marketing, shipping, and customer service. To streamline these daily operations, business owners can tap into the resources offered by established platforms like Amazon. Amazon is a top choice for small and midsize businesses looking to expand their online presence. In 2019, the platform boasted millions of active users, including 105 million Amazon Prime customers who make daily purchases. A 2016 study revealed that over 50% of online shoppers begin their product searches on Amazon. By leveraging Amazon to kickstart your e-commerce enterprise, you can access a robust marketing platform, connect with a vast customer base, facilitate sales, manage billing, and handle product shipments. This approach allows you to launch your business with minimal resources, accelerate growth, and gain valuable insights into online selling.

Benefits of Selling on Amazon

Amazon hosts millions of third-party sellers who collectively account for more than half of the products sold on the platform. In 2018, small and midsize US businesses made an average of over $90,000 in sales through Amazon. This success is attributable to various advantages that any business can exploit by leveraging Amazon as an e-commerce platform. Amazon provides access to a built-in customer base that generates qualified traffic, which can lead to early profitability and circumvent the need to invest significant resources in customer acquisition. The Amazon brand carries substantial credibility, instilling trust in consumers and facilitating easier market entry for new businesses. Leveraging Amazon’s existing technological infrastructure eliminates the need to set up and maintain e-commerce functionality, allowing sellers to focus on other aspects of business growth. Amazon offers two seller tiers: Individual sellers pay $0.99 per sale and can list products in 20+ categories, while professional sellers pay a flat $39.99 monthly fee, have access to 10 additional categories, and enjoy enhanced customization options for listings and shipping. Both seller types incur additional fees upon selling products.

Optimizing Your Business with Fulfillment by Amazon (FBA)

For sellers on Amazon, Fulfillment by Amazon (FBA) offers a streamlined alternative to managing order processing and shipping. With FBA, Amazon handles payment processing and order fulfillment, freeing up sellers’ time and resources. The FBA process is straightforward: sellers send products to Amazon, which then manages order fulfillment, charges a fee for each sale, and deposits net income into the seller’s bank account. By utilizing FBA, businesses can save time and money on order processing, operate in smaller spaces due to reduced inventory storage needs, retain a larger share of profits for reinvestment, and provide customers with standardized shipping and processing experiences that drive sales. Amazon’s operational efficiency and economies of scale enable FBA to process orders at a lower cost than many individual businesses, making it a cost-effective solution for sellers.