Why You Shouldn’t Sell on Amazon

Welcome to the bring your product idea to life podcast. This is the podcast for you if you're getting started selling products or if you'd like to create your own product to sell.

I'm Vicki Weinberg, a product creation coach and Amazon expert. Every week I share friendly practical advice as well as inspirational stories from small businesses. Let's get started.

Hi. Welcome to this episode.

You might find the title of this episode quite confusing because you might think, oh, I thought Vicky wanted everyone to sell on Amazon. Well, yes and no. As you know, I do think Amazon can be a great opportunity, but I also acknowledge that it is not right for everyone.

And the point of this episode is to help you make an informed decision about whether Amazon might be somewhere you want to sell your products or continue to sell your products. If you're on there already or already, this is definitely not an episode where we're going to be bashing Amazon at all.

For those of you who do want to sell on Amazon, I just want to make sure that you're going into it with the right expectations and also you're having a think about whether it is right for you and you're making a really informed decision.

Because what I never want for anybody is for you to spend lots of time, money, effort, getting set up, and then six months in a year, in however long it is, you just think, do you know what? This isn't working.

And actually it's never going to work because it's something fundamentally that means, you know it's never going to be the right place for you. So let's talk about my 10 reasons why you shouldn't sell your products on Amazon.

So the first reason to not sell your products on Amazon is if your product isn't suited to Amazon customers. So some products naturally do really well on Amazon and others struggle a bit.

If your product is highly customized, if it requires a lot of explanation, so it's something that customers perhaps have never seen before, or that something they might not be used to, they might not understand what it is.

Or if it's something that has a really niche market that just doesn't shop on Amazon, maybe they go to a particular niche website to get products like yours. It might not be the best platform for you.

But if your products, on the other hand, is something that people already buy online, if you're seeing other similar products on Amazon, they don't have to be the same as yours.

In fact, you probably don't want them to be the same as yours if they're similar enough and you can See that on Amazon, maybe you've done some research, you can see they're selling well on Amazon, then there's a good chance Amazon could work for you too. My second reason to potentially not sell on Amazon is if you are expecting overnight success. You've definitely heard me say this before.

Amazon isn't a set in, forget it platform. It's not somewhere where you can just get set up, put some listings on, sit back, wait for the sales. Success on Amazon takes some time.

It takes some effort. It takes work at the beginning. It then takes some more ongoing optimization, which is kind of the whole point of this episode.

Because I don't want you to go into it not, you know, not knowing these things. Just listing a product on Amazon does not guarantee that you're going to get any sales, let alone good sales. There's a lot of competition.

You need some strategy. You need to know what you're doing and you need to know it really, really well.

However, if you're prepared to put in the work, the time, the money, the effort, whatever it is. Because of course, remember, you don't need to be doing all of this.

Your if you decide that you know Amazon is, you listen to this episode and you think, okay, I do have a chance on Amazon. It sounds like a good marketplace for me. I'm ready to put the work in. Then absolutely, you do have a chance of doing really, really well.

But the key thing I'm trying to get across here is you have to put in the work to do well on Amazon.

So my third reason is if you don't have the margin for Amazon's fees, it may not be the best place for you because the cost of selling on Amazon can really add up. So we have referral fees, we have FBA fees. If you're using fba, if you're using any Amazon advertising, there's fees for that.

I've done a whole episode actually about Amazon fees, which you can go and listen to to get a full breakdown of everything you're likely to pay.

I also mentioned in that episode something called the Amazon Fee Calculator, which is a free tool provided by Amazon where you can go in, you can tell them what product you're looking to sell, what cash will get goes in, what your selling price is going to be, and it'll work out all the fees for you. That is really, really worth looking at. Because if your profit margins are already slim, Amazon might not be right for you because of all these fees.

And I promise you, they really do add up. I was doing some work for a client just earlier this week where they gave me some ideas of products they wanted to use to expand their range.

And they were asking me if I could use this calculator on their behalf and work out what the fees would be. And because I knew what it was going to cost to produce their product, there were actually two of the products they wanted to sell.

I had to say to them, do you know what, by all means, like, expand your range, add these products on your website, if that works for you, but actually on Amazon, you're going to be making a loss. I really don't think it's going to work. And of course I gave some other options. So this, this product was actually, it was like a bottle drink.

And I said, well, actually if you sold this as a six pack, a pack of six bottles rather than one bottle, and you priced it accordingly, then that would work. But the single bottles just, you know, they weren't, they weren't going to work on Amazon.

And I'm really pleased that I was able to look into this and let my client know before he put any further effort into, you know, getting this product onto Amazon. Because, as you know, as I say, if you don't have room to absorb these costs, it can be tricky to make it profitable.

Having said all of this, if you're happy with your pricing, if you can build Amazon's fees into your cost, or, or maybe you don't need to be the build the fees in.

So, for example, if you feel like actually you look at the competition for products that yours on Amazon, you think, actually I could put another pound on my product, I'm still in line with everything else, I can actually put the price up slightly, that'll absorb some of the cost. I'm still making a good product, a good profit, that's absolutely fine. Or maybe you don't need to do that at all.

Maybe your, you know, your pricing is good as it is and you can absorb all of Amazon's fees, then that's great. And Amazon, as you know, can be a great way to reach new customers.

It can be a great way to increase your sales without having to drive all the traffic to your own site. But it's just really important to have a look into those fees before you get started.

Listen to my full episode about all the fees to expect and just make sure that you're actually going to be making a profit on Amazon, because as I say, there's also the time cost of getting yourself set up as well. And you just want to make sure that it's going to be profitable for you.

So the fourth reason Amazon might not be right is if you're not willing to play by their rules.

So Amazon, you may or may not be aware of, has really strict rules and policies, and if you break one of them, even by accident, it can lead to getting your account suspended in the worst case, often that doesn't happen. But I want to say that most people that I work with have had some sort of warning on Amazon against their account.

I've definitely worked with people who've had listings taken down, either because Amazon doesn't like the image or they think there's something wrong with the price or all. All kinds of things. Plus, there's all of the things that you need to do to list certain products. Say, for example, I'm sure I've used this before.

If you're selling food products, Amazon wants to know what's in the product. It wants to know how healthy it is. Sometimes they want to know where things are manufactured, if you have any claims on your product.

So, for example, if your product is organic, they need you to prove that it is. And all this varies depending what it is you want to sell.

But what I'm basically trying to say is you will have to give them a lot of information, potentially depending what it is you want to sell. This can change at any time as well.

So you might list your product and then six months later they might say, actually, we now want you to prove something. You know, whatever it was. Didn't ask you that before, but the rules have changed.

Now suddenly you have to prove something and you're jumping for three more heaps. Some people find it really frustrating. In fact, I think everyone finds this really frustrating.

I do a lot of this type of work for people that I work with, where I'm helping them overcome some of these challenges, which, by the way, all can be resolved. But I think it's good to know right at the start that you know you don't have the same control that you do in other places.

And we'll talk about that a bit more in a moment. And that you do have to abide by all of Amazon's rules, even if you think they're really silly, you still have to.

And speaking of control, my fifth reason that Amazon might not be right for you is if you want full control over the customer relationship.

Because when you're selling on Amazon, unlike some of the other platforms, like ebay, as an example, or Etsy, you don't own the customer relationship. Amazon does. You can't build direct relationships with your customer. You don't get their phone number, you don't get their email address.

I don't know why you want their phone number, but you don't get their email address. You can't add them to your list. Amazon controls all of that. That, and if you're using fba, so Amazon's fulfilling your orders, you.

You don't have the customer address either. You know, all you know about them is their Amazon, you know their name they put into Amazon, and that is it.

So this means that you don't get access to their details. So you can't market them directly. You can't add them to your email list. Not that you can vouch consent anyway.

But if you want complete control over that buying experience, Amazon, you know, for this reason, might not be the best fit. Speaking of experience, the other thing you don't have control over is how your products are shipped.

If you're using fba, so you can't tell Amazon, I want you to put them in a box rather than one of those brown paper bags. For example, Amazon can't put inserts in with your orders for you if you usually do a nice handmade, handwritten.

So we know if someone orders from your website, of course, that's not something you can do on Amazon if Amazon are doing your forfeit fulfillment. Unless, of course, that's something that you can add in prior to shipping your orders.

So if you were sending in stock for FBA and you think, oh, actually I usually put a note in, there's no reason you can't put in a note inside the box that will ultimately, or packaging, or ultimately sent to the customer. You can totally do that, but you don't have full control on how your products are packaged, how they're presented.

All of these things get taken out of your control and that is not right for everyone. However, if your goal is to reach a big audience, then Amazon, you know, Amazon's got a big customer base. They can definitely help you do that.

There will be people who will take a chance on your brand on Amazon that perhaps wouldn't on your website because maybe they've never heard of your brand or your product, but they go on Amazon and they know, okay, it's been shipped via Prime. I know I can return it if I have any problems. It does encourage people to take a bit of a chance for you.

But as I say, the downside is you lose that direct relationship with the customer.

But pros and cons to all of this My sixth thing to consider is Amazon might not be right for you if you don't want to invest in marketing and advertising. So this isn't me for a minute saying you have to run ads if you want to sell on Amazon. Definitely not.

However, something to think about is that organic visibility on Amazon is hard. I've spoken about this before and a lot of people will run Amazon advertising. That's pay per click advertising to get those first sales.

If you're not prepared to do this, then you might struggle to get started. And that's, you know, that's the bottom line, really.

However, saying this, you don't have to do Amazon ads, but you will need to do something to drive sale traffic to your listing.

I guess that's what I'm really trying to get at here is that you don't have to run Amazon advertising, you don't have to do any sort of paid advertising. You can do things for, but you're going to have to do something.

Coming back to what I spoke about right at the beginning of this episode, you're going to have to do something to drive traffic to your listing. So if you're thinking, you know, you've heard me say, you can't set and forget it. If you're thinking, well, probably I can.

No, you really, really can't. You need to do something to get those initial sales.

And if you're not prepared to do something, whatever it is, whether that's running Amazon ads, whether it's running ads somewhere else pointing to Amazon, whether that's using your email list, whatever it is, if you're not prepared to do something to get sales going, you are going to find it a lot harder. The seventh reason Amazon might not be right for you is if you want full control over your branding and customer experience.

So I've spoken a bit about the customer experience in terms of, you know, we can't tell Amazon how to deliver our products if we're using fba. Of course, if you're doing your own fulfillment, you can, but you also get limited options when it comes to your product listing.

Your listing will look like everyone else's to an extent, because it's a template. Often people say to me, can we take off this field? Or I don't want this, or there's, there's things people don't like.

But unfortunately it's Amazon, we, we have to, you know, the listings are all formatted the same way. However, of course, you can do a lot to personalize a product listing and make it your own.

You can have great images, you can have A plus content, you can have your storefront. And a lot of these things can be customized to, you know, have your own branding and your own colors and all of those things.

But however you know your product title is going to look how it looks, the character limit is what it is, the font used on the website is what it is. So yes, there are things that you can't control, but also you can do a really good job of the things that you can.

So I personally, I think don't let this be, you know, the one thing that stops you because there are ways around it. But it's just something to think about.

Reason number eight that Amazon might not be right for you is if you're, you know, you're not up for the, basically if you're not up for the competition really.

Because the problem is when you sell whatever you sell on Amazon, unless your product is really niche and unique and brand new, there are going to be other sellers selling products similar to yours. And what often can happen is this can end up in a bit of a pricing more.

Sometimes where someone's selling something similar to you, you come along with your product and they decide to make theirs cheaper because they're trying to, you know, to get more sales to their, to their own product. If you're selling something that can be copied, this is something else that can happen.

So sometimes someone will sort of basically rip off your product and sell their own version and you can get around all of this. By the way, I should, I should say all of this can be reported, all of this can be resolved, but it is a bit of hassle when it comes to the pricing.

I think I've spoken about this before. I think if you're confident on what you're selling your product for and it's worth that price, stick to it. Don't like get stuck into pricing wars.

But I do think from my own experience and my clients experience, Amazon can be a bit of a cutthroat marketplace.

If you're selling your own unique branded product that is your know, it's your product, it's, it's your brand and it's something that's unique just to you, hopefully you will be absolutely fine. However, if you're selling something that's generic, maybe you're selling something unbranded.

There's no reason that someone else couldn't be selling the exact same thing.

So I think the way around this is just be sure that, you know, if you're looking to get onto Amazon and Hopefully, if you've been following me for a while, you've heard me say this, that you're selling your own unique, brilliant product. And honestly, that's, that's the best place to come at it from my ninth reason is if you don't have the inventory or the logistics to keep up.

So what I mean by this is if you're using fba, so fulfilled by Amazon and you run out of stock, your ranking on Amazon to where you appear in the search can drop really quickly, which means your sales also drop really quickly.

So that's just something to be aware of if you feel like you don't have a business model where you can make sure that Amazon always has enough stock without having too much stocks.

I think we've spoken about this before as well, that if you send in too much stock to Amazon and that stock doesn't sell, you have other issues which you spoken about in a previous episode. So basically, you need to be on top of your stock.

If you're using fba, you need to know that you can always have in enough stock to fulfill orders, but not so much that you've got lots of excess that's, you know, going to cost you money and ultimately going to have to be returned. So you need to think about how you're going to manage that.

If you're fulfilling orders yourself, then you need to be sure that one that you can give, you know, you can deliver what you're saying you're going to deliver.

Because if you tell Amazon, okay, I can ship all my orders the same day by 1:00 and you're not doing that, or you say everything's going to be delivered within two days and you're not doing that, then you'll get penalized. So you just need to think about the logistics. This is definitely not a reason not to be on Amazon.

You might have guessed by, you know, we're at number nine. Some of these aren't really reasons not to be. They're more things I want you to be thinking about.

So if you know you, you're thinking seriously about Amazon, think about your logistics. Think about how you're going to manage them. Are you using fba? Are you using fbm? Are you using a combination of both?

And how are you going to stay on top of, of it? And my 10th reason for potentially not even starting on Amazon is if you don't have the time to do it properly.

Because one of the biggest mistakes I see is new sellers rushing into Amazon without taking the time to do it well, so they don't optimize their product listings, they don't research their competitors, they don't get their shipping settings right. And if you don't have the time and patience to do this properly, it's really unlikely to deliver the results that you want.

And, you know, quite often people then have to go back and, like, retrospectively optimize their listings, improve their images, add A plus content, look at their keywords, and honestly, it is so much easier and so much better, so much more profitable for you to do this right from the start.

So if this is something you're thinking of, if you're, you know, you've listened this far and you're thinking, yes, yes, yes, yes, yes, Amazon sounds good for me, but actually, I don't have the time to figure it all out, then I can help you. So I have an Amazon launch package where I take care of everything.

So I set up your account, create your listings, get your first shipping plan sorted, even manage your advertising for the first month so that you're fully set up. It's done really well right from the start so you can start selling without the stress.

So if it's something you're interested in, you can contact me, Vicki, @vickywinebag.com so, before we finish up, I'd like to talk about who I think should sell on Amazon. So if you have good product margins and you can absorb the cost, absolutely, it's a yes.

If you're willing to learn a bit about Amazon and do it really, really well, it's a yes.

If you've got the time or you've got the time or the effort or the money to invest in getting everything set up correctly and then doing something to drive traffic, it's a yes.

And if you want access to Amazon's huge customer base and you understand everything that I've said, or at least you want, you know, you have an understanding of everything I've said and you're still clear that it's a good place for you, then absolutely go ahead. And I guess to end, I will say Amazon isn't going to be right for every business, and that's absolutely fine.

If you're not sure whether it's a good place for you, I would say start by looking at the numbers, start by looking at the fees and figuring out whether financially it might work for you. I think that's always a good place to start.

And if you do decide that you're going to sell your products on Amazon, just be clear what you need to do to get off to the, to the best possible start. I have a free checklist that can help you with this.

I'm going to link to that in the show notes because absolutely possible for you to do this yourself. It's really possible to do really well on Amazon. And the point of this episode is always wasn't to scare you off.

It was just to get you think really clearly about whether you are prepared to invest the time, money and effort required in getting started.

And I know you've probably heard me talk about similar things before, but I will always continue to talk about this because what I would never want for you is for you to, you know, to get onto Amazon and then go actually, do you know what? This isn't right. I shouldn't be here. I'm not making money. I've spent a lot of time. It's not getting me it.

Whatever it is, of course I don't want that for you. So that was the whole purpose of this episode. I hope you found it helpful as always.

If you have any questions you can email me Vicki Vicky weinberg.com you can come and find me on Instagram. And remember, you can also be watching these episodes on YouTube. So if you're just listening, you'd like, you'd like to see me talking to you.

You can do that as well. So I will be back this Friday with another interview and then next Tuesday with another Amazon specific bonus episode.

So until then, have a lovely week.

Thank you so much for listening. Right to the end of this episode.

Do remember that you can get the full back catalog and lots of free resources on my website, vickyweinberg.com Please do remember to rate and review this episode if you've enjoyed it and also share it with a friend who you think might find it useful. Thank you again and see you next week.