If there is one sector that technology has significantly impacted is online shopping. Unlike before, when people had to move to stores, for now, home delivery is the in-thing. The spread of the coronavirus has even made it grow further. With the lockdown and need to keep distance, home delivery has been the savior.
Amazon has been at hand to help fulfill customer needs. The company has been growing explosively. It has so far managed to hit a market capitalization of $570 billion. In the same period, it has also increased stock value by 63.3%. The company expects to grow even further. And that is where you come in as the seller.
The company allows third-party sellers to set-up accounts and trade from the platform. The program has been so successful, with around a 50% increase in the number of third-party sellers in 2020. Still, there have been concerns about whether Amazon is the real deal as most people paint it.
Here are some of the advantages and disadvantages to help you determine if the company is worth trading in;
Benefits of Trading in Amazon
Creating a third-party seller account in Amazon comes with multiple advantages. This explains the reason why the program has been growing over the past few years. The main benefit that comes with the platform is the ready market.
The site receives traffic of more than 206 million every month. Even though not everyone here is looking for your services, you are assured of the market. You only need to brand well and set yourself as the best quality. The available market is also great for profitability. Studies established that over 86% of the third-party sellers in Amazon are profitable. Of the number, 67% becomes profitable in the first year.
The other pro of trading in the Amazon is the ease of starting. You don’t have to invest in several infrastructures as you would when going alone. Amazon has a clear guideline on how to start trading. You only have to meet the standards, and you are good to go. You also don’t need multiple licensing and authorizations.
Amazon is an ever-improving platform. It is investing in customer experience. Any improvements in the site mean better prospects for sellers as well. The site is also making it easy for the sellers to succeed. For example, traders can use the Fulfillment by Amazon (FBA) program. It improves the delivery of the products.
There are also several tools to use when looking to make it when trading in Amazon. Such tools are like the IO Scout bsr calculator that allows the trader to understand the whole system. They also get to analyze competition and expected income.
The Dangers of Trading in Amazon
As much as it comes with benefits, trading in Amazon also comes with its fair share of concerns. The primary concern is heightened competition. Just as there are a lot of buyers, there are also multiple sellers. You have to invest in high-end services to stand out from the competition.
You have to stay aware of the possibility of unfair competition. Not every trader is honest. Some will pay for fake reviews. Just like some will go for fake purchase orders. You have to stay careful when dealing with your competition.
It would help if you took the time to understand the competition. You can also use tools like a fba calculator for amazon to help you understand the market. With the tool, you get to understand the expected returns and other market demographics. It generally gives you everything you need to build a business in Amazon.
The other concern that comes with trading in Amazon is the set guidelines. Even though they are meant for regulations, it limits your interactions. There are goods you won’t trade. You also have to use the set channels even when you could have developed better.
Now that you understand the benefits and cons of trading in Amazon, you can easily decide. What’s evident, though, is that the pros outweigh the cons. The cons are also manageable. It is, therefore, safe to conclude that trading in Amazon is worth it. You only need the right products, tools, and to understand your competition.