Let me tell you a secret! We’re thinking of building an Amazon Web store on Startup Champ. What does a person do before he starts a business? He thinks of pros and cons of starting that business, prerequisites and gets the resources ready. Right?
Let’s talk of the first and most important thing – pros and cons of building an Amazon Web store. As you know we’re ourselves trying to get into this thing, we did thorough analysis of what’s involved in building an amazon web store and these are pros and cons we noticed! These would help you if you’re also thinking of setting up an Amazon Web store.
Pros of building an amazon web store
Increased exposure: Amazon is a giant that gets millions of daily visitors. All those visitors are looking for shopping and there are high chances that, if your product is of the kind they’re looking for, you would end up being seen. Consider the scenario in which you weren’t on Amazon. You had your own online shop. Now, calculate the chances of getting a potential customer! With Amazon, you were getting free exposure (kinda) but with an individual store, this becomes nil.
Increased sales: Increase exposure means more sales. That’s pretty obvious and at the same time, it is quite clear that being on Amazon would help you to make sales. Why? Because a customer who visits Amazon trusts the site because of the brand value whereas a customer on your site would be doubtful about your credibility. This affects sales in a great way, but at the same time you must be prepared for it. Make sure you keep all records in a well formatted spreadsheet so that you don’t end up mixing customer orders and ending up with bad reviews.
Infrastructure: The most important benefit you get by building an amazon web store is infrastructure. No expenditure on hosting, maintenance etc. You just need to set up the store and keep updating the inventory. There are no costs involved in hosting, domain and setup.
Cons of building an amazon web store
Marketplace fees: Of course there is no infrastructure fee but you do pay marketplace fees. That means for every sale, you lose a small part of the profit to amazon. Some of you might consider it a small loss of money on every sale.
Limited means of expansion: With amazon, you would have to stick to their guidelines, their design and so on. You have no say in anything except the product’s price.
In the beginning, when you have limited resources and when you’re not sure about the success of your business, building an amazon web store rather than an individual ecommerce store is a good idea. It saves money and reduces risk. But considering that you would always stick to this and not move on to an individual store would be a big folly. There would be a time when your profits through amazon would be smaller than your loss. That’s when you should move on… or try to move on before that.