Amazon has made its marketplace welcoming for newcomers.
New sellers will find a platform where it takes only minutes to sign up, and a few more minutes beyond that to get product listings live on the site.
With Amazon’s intent to attract as much selection as possible to the marketplace, it makes sense that Amazon wants to make it functionally easy for anyone to start listing products on its site.
Yet, the decision to sell on Amazon should not be based just on ease of signup.
Things Sellers Need To Consider When Deciding To Sell On Amazon:
Almost anyone can list products for sale on Amazon.
Unless a brand has tight distribution controls over its product, it’s not unusual to find dozens – if not hundreds – of resellers offering the same products on Amazon.
This crowding creates price competition, as well as incentives to ignore Minimum Advertised Pricing/Manufacturer’s Suggested Retail Pricing policies or to divert products at low margins, just to get some margin out of holding a particular brand.
Amazon sets the rules of its own marketplace.
Amazon has the advantage of collecting massive amounts of customer search and customer purchase data which it shares only the minimum amounts with sellers.
This compendium of information gives Amazon’s first-party business – Amazon Retail, i.e. private label – a huge advantage of picking winners over and over when targeting products that it should sell on the marketplace.
Furthermore, Amazon Retail will almost always win the Buy Box, which is the mechanism through which sellers competing on the same product will get ranked to determine who gets the sale when the customer clicks the “Add to Cart” button.