Amazon is the largest online retailer in the world and seems to keep getting bigger every day. In 2018, sales grew by an astonishing 31% to $232.9 billion, compared with $177.9 billion in 2017. Operating income in the year tripled, to $12.4 billion, compared with an operating income of $4.1 billion in 2017.
Critics have been worried about the overall impact of Amazon on small business for a while now, particularly as the company continues to exponentially grow. According to a report by the Institute for Local Self-Reliance (ILSR), many small businesses say that Amazon is the reason for their decline in sales. ILSR’s research points to a net loss of 148,774 jobs due to Amazon as a result of traditional brick-and-mortar stores closing.
Nine West, Claire’s, The Bon-Ton Stores, The Limited, RadioShack, Toys R Us are just a few of many high-profile retail names struggling to survive in the digital age. JC Penney, Sears, and other marquee brands are shutting down stores and laying off workers. Department stores are in decline and less foot traffic means less sales. We have been working with small businesses for years, providing access to some of the lowest rates and best terms from third-party lenders specializing in small business loans, and we have seen the impact of the migration to digital commerce with our own unique perspective.
With wages rising, the cost of raw materials and shipping ever increasing and a savvy consumer class able to price check before, during and after the sale, many traditional retailers are struggling to make sense of this new normal.
The answer, for most businesses that can sell products online, is if you can’t beat ‘em, join ‘em.
Today, more than 50% of Amazon’s total unit sales come from third-party selection. Third-party sellers are independent sellers who offer a variety of new, used, refurbished, and collectible merchandise via the online platform. The steps to place an order with a third-party seller are the same as placing any other order on Amazon.com. Customers add items to their shopping cart, then complete their order through the Amazon checkout process.
According to Small Business Trends sixty percent of small businesses selling in online marketplaces generate more than half of their online sales from marketplace sites like Amazon.
According to a 2018 Insureon Poll, over two-thirds (68%) of small business owners who sell a product online say that Amazon has positively impacted their sales.
Our business clients are quick to share some of their secrets to success on Amazon. We thought we may want to share a few top tips with our readers today.
Optimize Your Search Terms and Listings
Google may be the world’s biggest search engine, but if you are an online retailer, Amazon is the most important. Many customers skip Google and search directly within Amazon for the products they are looking for. In fact, 56% of online shoppers start their product searches on Amazon.
Therefore, it is critically important to think like your customers and make sure your product titles and descriptions accurately describe your brand, product name, key features, colors, sizes and quantity. There is also a hidden keyword field where you can include synonyms, acronyms, abbreviations and other variations into your search listings that consumers may be using to find your company’s products.
Take Advantage of Advertising Opportunities
Listing products on Amazon is only the beginning. Sponsored products, headline search ads, and Amazon coupons are just a few ways to help your company stand out from the thousands of other similar products available online.
Add A+ Content
Good content converts visitors to buyers. Not so long ago, Amazon started to offer A+ Content opportunities to selected sellers. With A+ Content, sellers are able to add more detailed item descriptions, heightened images, comparison charts, videos and more – it is a huge differentiator from competitors when selling similar products online.
Online reviews are not only a referendum on the products you sell, but also on your company. Your star rating on Amazon is a direct reflection of your company’s online reputation. Shipping times, customer service, packaging all factor into the customer experience and build loyalty.
Successful sellers know the importance of positive reviews to drive sales, but beware of the temptation to pay for reviews or fake reviews. Amazon has been increasingly aggressive in recent years targeting retailers who cheat customers and fake reviews. It is a certain way to get your Amazon account suspended.