Selling on Amazon or Your Own Website – What’s More Profitable?

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It won’t be wrong to say that the widespread success of online businesses has brought upon us the age of entrepreneurs. According to a survey conducted by Holvi, the digital banking specialist for SMBs, almost 50% of the workforce in the UK wants to quit their jobs to start their own business.

A good part of this mindset can be well owed to the recent pandemic threat that led to salary cuts and terminations globally. The best alternative that most people chose to earn their livelihood was Amazon.

It’s no secret that Amazon is the largest online marketplace in the world with a $427 billion market cap. Maybe that’s one of the reasons why people are often confused about whether to sell on their own website or on Amazon.

The same reason has probably brought you here. So how does one decides between the two? By simply weighing the pros and cons of both. So, let’s look at each of them individually.

Selling on Amazon

Pros

  1. With over 5.8 billion global visitors within the 6 months leading to February 2022, Amazon, undoubtedly, has the largest online reach in the world. Staring your e-commerce business with that kind of online exposure can be a great stepping stone.
  2. Amazon already holds the trust of its customers. That means that people buy from Amazon without thinking twice about the store listed on its marketplace.
  3. It’s also very convenient as you don’t have to invest in having a website developed. Instead, you can use that money to buy more stock for your online store.
  4. If you choose to go with Amazon’s FBA programme, you don’t have to worry about shipping and warehousing stock either. Amazon handles these things for you.
  5. Amazon also offers its own copyright protection program called Amazon Brand Registry. Once your store is registered in the program it’s automatically protected as Amazon won’t allow others to sell bootlegged and knock-offs of your products.
  6. Amazon’s thriving seller community has a very active forum that you can use to get guidance about the platform.
  7. With Amazon, your chances of being swindled by a fraudster are minimum since the company handles all payments itself.

Cons

  1. Unfortunately, Amazon’s biggest pro is also its biggest con. Being the largest marketplace online, the competition is severe. Unless you bring a really unique product, chances of your store gaining a footing are quite slim.
  2. Again, with thousands of stores selling on Amazon, it can be a challenge for your store to gain brand recognition.
  3. While you do save on web development, running an e-commerce store on Amazon means operating on rented real estate. The landlord can kick you out because you ignored a meaningless fine print.
  4. Amazon charges you different fees on multiple levels. And they only increase if you signup for its FBA programme. Regardless, when working with Amazon your profits are bound to take a hit.
  5. A large number of sales on Amazon comes because of the positive reviews your products or store gets. Sadly, Amazon can limit the number of reviews your store can get per week which can damage your organic traffic.
  6. When asking questions on Amazon’s seller forums, if you mistakenly give away too much information about your product or store, you risk alerting the competition.
  7. Customers are known for raising wrongful product claims against store owners on Amazon as a blackmail tactic. And, more often than not, Amazon sides with the customer instead of the merchant.

Selling on Your Own Website

Pros

  1. Selling through your own website means your rules. You are free to list products, offer discounts, market where you like, and design the website in coherence with your brand.
  2. Since you own the website, you don’t have to worry about your store being delisted. You just have to ensure to renew your domain and hosting services in a timely manner.
  3. As opposed to Amazon where customers have multiple options to buy similar products when someone comes to your website they come to buy from you only. 
  4. A standalone online store is great for building brand awareness. When someone praises your product or brand, no other company or business can hog credit and profit from its success.
  5. When running your e-commerce business through your own website, the data you collect can be used for targeted marketing to help your business grow as well as build relationship with customers.

Cons

  1. Managing an e-commerce website can be quite a hassle. If you plan to run all the operations by yourself, you will be hardpressed for time to do anything. And, hiring a dedicated manager can be expensive.
  2. Starting a solely owned e-commerce business can require substantial investment. Website development alone can cost thousands. Then there is the cost of an office or a warehouse to stock your products. Not to mention, the amount required for marketing your store. If nobody knows you exist, who would you sell to?
  3. Gaining an audience for a new website can take a lot of time and effort. And, unless you are willing to invest both, your online store will never reach the sales numbers that actually provide profit.
  4. As your website is hosted on a third-party server, you have to be vigilant about the server’s downtime. If and when the website goes down, you will not only be responsible for the technical support but also miss out on any potential sales during the downtime.

Conclusion

After weighing the pros and cons of selling on Amazon or your own website, the direction you take will either make or break your e-commerce business. If you ask us, we suggest you use both.

After all, more stores mean higher sales. Besides, you can even easily automate your business as well. Instead of going the usual route with Amazon, set up a store with the FBA programme.

As for your own website, you can always enlist the services of an order fulfilment company like Swift E-Commerce to replicate the FBA in a way. All you need to do is to keep an eye on your inventory on Amazon as well as on your own website. If you can plan and execute this strategy successfully, before long you will be making good profits with minimum effort. Can things be any simpler?

We have been partnering with small businesses and E-retailers to help them stay connected with their customers 24/7 and with order fulfillment since 2008. 

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