It may be difficult for small businesses to compete with global online trading giants like Amazon. But if they come together, it can be a win for both parties.
Amazon claims that more than half of the items sold online come from small businesses. Fulfillment by Amazon, the program that enables small businesses to deliver top-notch deliveries of two days before delivering their products to Amazon’s shipping centers and providing the company with packaging, shipping, and service, is the major driver of this trend.
- Amazon claims that more than half of the items sold online come from small businesses.
- An excellent driver of this traffic is Fulfillment by Amazon.
- The service enables small businesses to offer two-day prime deliveries while the company handles packaging, shipping and customer service.
According to Amazon, around 2 billion items were sold worldwide last year. To participate, Amazon charges a shipping and storage fee, depending on the size of the item. But small business owners like Steve Grubbs say it’s worth it.
Grubbs is the owner of VictoryStore.com, based in Davenport, Iowa, and has been in the program for about five years. Sometimes the rates can cost you 30% because it sells huge greeting cards and signs that can measure 6 feet high. But the reward is the presence and new customers who are increasingly restricting their Amazon search to large providers. Today, Amazon is responding to 70% of the $ 1.1 million it earns this year.
“People trust them, they know that Amazon will take care of them, so they use Prime all the time. There are so many challenges in e-commerce and we’ve been fighting them for 20 years, and Amazon is eliminating them to a great extent: credit card security, marketing, and sales, shipping and enforcement,” says Grubbs.
But partnership also means that small retailers can lose some control. Jack Brecher, an owner of JR William, a luxury goods retailer based in Queens, NY, says he has little contact with his customers and has worse reviews on the site if he decides to supplement the article with his own funds.
“When the dealer places his list on Amazon, the chances of him becoming a big seller are practically nil. The positive aspects of using FBA cannot be underestimated, not with deliveries, treating specific issues with respect. These are things that could take all day long for small business owners like me Time is our greatest resource and time release is absolutely one Great value. ” says Brecher.
Amazon does not disclose how many small business owners participate in the compliance program but defines it as a company with 1,500 employees or less. Data analytics firm Potoo says there are about 4 million vendors on Amazon, and the company adds more than 1,000 vendors daily. The number of sellers on Amazon has more than doubled in the last five years.
Small business owners have mixed opinions about Amazon and what it means for Main Street. CNBC and SurveyMonkey surveyed small e-commerce giant companies in the last quarter and found that one in three think Amazon is good for the business, with nearly half saying that Amazon is bad for the business, but less than 10% said that they really compete with Amazon for customers.
One thing is certain: with the increase in the FBA program and its sales, smaller retailers like Grubbs say that competition is also increasing.
“You should keep prices as tight as possible, and you should make sure you have the products people want. If you do not provide a quality product, you will not get a high score and bad grades will kill your product,” says Grubbs.