Amazon receives over 230 million unique visitors every month. That’s more than the entire population of Brazil.
This huge customer base makes it an attractive choice for online sellers. But is it the right choice for everyone? Could you run a more profitable business by building your own website using an ecommerce platform? This guide will go over the advantages and disadvantages to either choice to help you make an informed decision.
- There are pros and cons to selling on Amazon or building your website — familiarize yourself with each option before making a final decision.
- While there is some overlap, the tools you’ll need to succeed on either platform can differ.
- Your chosen platform will depend on your goals and how you envision getting there.
Selling on Amazon: The Pros and Cons
Before you commit to the platform, you’ll need to know exactly how to sell on Amazon — and that includes exploring both the pros and cons of selling via the platform.
Pros of Selling on Amazon
- Massive amounts of traffic
- Amazon has brand recognition, high levels of customer loyalty, and trust
- Don’t need to build a business website
- Selling with Amazon is scalable
- Amazon can manage spikes in traffic, demand, and changes to inventory
- Amazon manages the payment process
- Offers high protection against fraud
Cons of Selling on Amazon
- A lot of competition
- Price is your only differentiator at the start until you’ve built up enough (positive!) product reviews
- Amazon’s rules bind you
- Amazon has full control over your listings
- Amazon can remove content, product descriptions, listings, and entire product catalogs if they flag something
- Subject to (variable) fees
- Amazon can limit the type of product reviews
Tools Needed To Sell on Amazon
Do you think your products and the Amazon platform are all you’ll need to turn a profit? Think again. Below are just a handful of the tools you’ll need to sell on Amazon.
Amazon Product Research Tools
Amazon is saturated with the same products. Amazon product hunting tools help you identify the right products for your business.
If you’ve decided to use dropshipping to make money on Amazon, you’ll need to find the best supplier for you and your products. Popular dropshipping inventories to find the right supplier include Inventory Source, WorldWide Brands, and Doba.
Listing Optimization Tools
Keyword research tools like MerchantWords are explicitly designed for Amazon to help sellers analyze shopping trends and help sellers optimize their product listings for maximum visibility.
Tips For Selling on Amazon
There’s no right or wrong way to sell on Amazon, but here are a few tips to get you started:
- Decide on your pricing strategy early. Be competitive, but make sure you can turn a profit, too.
- Be as detailed as possible when crafting your product descriptions; customers are more likely to buy a product when they know what they’re getting.
- Determine and solidify your fulfillment strategy before you launch.
- Follow Amazon’s selling rules closely to ensure your listings are not taken down.
Building Your eCommerce Site
Building your own ecommerce site from scratch is completely doable, but it requires a lot of planning and know-how to make it worth your efforts and resources.
Pros of Building Your eCommerce Site
- Not subject to any other marketplace’s rules
- You have definitive say over the site’s content and design
- Potential customers won’t be distracted by a “similar products” section or sponsored product placements
- Building your website allows you to build your brand how you want
- Customer loyalty and brand presence tend to be higher when customers buy a great product from a standalone website
- Customers can refer others to your store by name rather than a generic marketplace
- You can engage in targeted customer marketing and relationship-building activities
Cons of Building Your eCommerce Site
- Less customer reach when you build a site from scratch
- Building credibility and trust will take a while
- You’re directly responsible for customer support
- If your website goes down for any reason, you must fix it.
- You’re responsible for technical issues that arise (and you miss out on potential sales while fixing them)
- Running a successful online store often requires hiring team
Tools Needed to Build Your eCommerce Site
Building and selling on your website requires multiple tools. Below are just a few of the essential tools you’ll need.
Things like ecommerce website builders, or ecommerce platforms, are tools that help you build your online store from scratch. These platforms provide the essential elements you’ll need to build your store from website templates, SSL certifications, domain hosting, and shopping cart tools.
One of the most important tools you’ll need is a payment processor that facilitates payments and helps you stay PCI-compliant. Every payment processor has its own payment terms, setup fees, monthly fees, and transaction fees to consider, too.
SEO tools are essential for building an ecommerce website’s presence and customer base. Tools like SEMrush and Ahrefs help your site rank well on Google and outrank competitors by helping you build an SEO strategy that works for your products and business plan.
4 Tips For Selling on Your E-commerce Site
Again, there is no standard handbook for building and selling via your website, but here are a few tips for any newcomer:
- Conduct thorough market analysis of the product space, industry, competitors, and buyer personas before you launch,
- Create a solid marketing plan that accounts for all selling channels, social media platforms, email marketing, and content marketing
- If you’re selling your products, hire a great product photographer to help your products shine.
- Enable customer reviews and other user-generated content to help your site build credibility, trust, and brand recognition.
How to Decide Between Your Website or Selling Online with Amazon’s ecommerce Platform
There are many factors to consider when choosing between selling on Amazon or going it alone. For example, do you want to create a brand and scale it? Then building your site is likely more suitable.
However, if you’ve identified a gap in the market that you want to capitalize on and are less concerned about brand building, Amazon might be your best bet. The answers to questions like these will ultimately help you decide.
You can also sell on both platforms to capture a larger market share (but be wary of the extra money you’ll spend on sustaining both avenues). Similarly, you could start out on Amazon and gradually shift to a website of your own once you’ve cornered a part of the market.
Why Selling on Your Website Is Better Than Selling on Amazon
However, ultimately, selling on your website gives you full control over your products, business strategies, and ability to scale. Plus, who knows what Amazon will look like in five years?
Will there be a bigger ecommerce marketplace disruptor? Will Amazon enforce stricter rules on selling? Will Amazon require large upfront fees to be able to use the platform for selling? Who knows what the future has in store for Amazon, but by building your website, you can control your future.
Frequently Asked Questions About Selling on Amazon vs. Your Website
What fees are involved when selling on Amazon?
Amazon charges a referral fee for each item sold, a percentage of the total sale price. The Individual plan costs $0.99 per unit sold, and the Professional plan costs $39.99 per month, no matter how many units you sell.
How much does it cost to run an ecommerce website?
The cost of running an ecommerce website can vary depending on the size of the business and the features required. Some of the costs associated with running an ecommerce website include domain registration, web hosting, website design and development, payment gateway fees, SSL certificate fees, marketing and advertising costs, and maintenance costs.
Which is cheaper — running a shop on Amazon or building my own website?
Smartphone and tablet users only have so much bandwidth to work with compared to website visitors with a desktop browser. If your site takes too long to In the short term, selling on Amazon is undoubtedly cheaper. The only overhead cost is the cost of the product you’re selling — a cost that might be eliminated by using a dropshipper. However, Amazon will always take a percentage of your profit, which might eat away more of your margin than you’d like.
Are there things I can’t sell on Amazon?
Amazon prohibits the sale of certain items, including alcohol, tires, fine art, or other goods regulated by state and federal law. If you’re unsure if the product you’re trying to sell is prohibited, check the site for similar listings.