Amazon – The Call of The Sirens

In Greek mythology, the Sirens were beautiful women who would lure boats to their doom with their seductive voices promising of treasure.

For e-commerce merchants, today’s Siren could well be listing products on Amazon.

Now before you think I’ve gone crazy, let me explain.

Once I explain, I think you will also see the similarities between Amazon and the mythological Sirens and why e-commerce store owner’s need to spend time building their own brand and promoting their own website.

The Lure of Amazon

Amazon offers easy access to their shopping portal. In fact, it has never been easier for e-commerce merchants to list their products to the millions of potential buyers who search Amazon each and every day.

Amazon’s song of treasure rings out for all to hear!

Merchants who decide to list their products on Amazon are given the choice of whether to ship their products themselves (FBM) or even easier to send their products to one of Amazon’s warehouses and have Amazon ship their products (FBA) for them.

When a product is sold, Amazon charges the buyer’s payment method and coordinates the delivery of the order between the merchant and the customer. For this service, Amazon takes a commission (approximately 15%) plus a fee for shipping if Amazon is fulfilling plus storage fees plus a host of other fees.

These fees are just for items that sell when randomly appearing on the Amazon platform. In addition, Amazon allows merchants to buy premium placement in Amazon using a pay-per-click model.

These ads can appear either as products (sponsored product ads) or as banners above product listings (sponsored brand ads).

With running ads, there is no upper limits to the fees advertisers can be charged for these premium placements within Amazon. I’ve managed accounts in highly competitive product lines within Amazon where the ad fees for product placements have exceeded the sales generated.

In all these fees, lies the untold dangers of listing your products on Amazon!

How Amazon Can Be Your Doom?

It is important to remember a couple of facts when selling on Amazon:

First and foremost, the customer does not have a relationship with the seller, they have a relationship with Amazon.

The merchant is not allowed to communicate directly to the customer’s email (in fact, they receive a coded Amazon email that forwards to the customer’s email). In addition, merchants are not allowed to add promotional material to their orders (if they are shipping themselves). And, maybe most important, merchants are not able to market in the future to customer’s who purchase their products from Amazon.

Second, merchants are at the mercy of Amazon!

If merchants violate any of Amazon’s policies, their products can be removed from Amazon.

If Amazon changes how they list products, a merchant may find their traffic instantly evaporate.

Finally, unless you sell your own private labeled merchandise there is nothing preventing other merchants including Amazon from competing directly against you purely on price. In fact, this is what has made Amazon such a behemoth!

And these facts of doom are what makes the strategy of listing on Amazon eventually destroy the boats of many e-commerce merchants!

Building Your Own Brand Outside Amazon

Without a doubt building your own brand is much harder to build using your own website compared with simply listing your products on Amazon.

However, for all the reasons listed above it is a must, especially if you want to survive long term in the world of e-commerce.

This all sounds good, but you may be asking how should you go about building your own brand outside Amazon?

I have broken it down into 3 main ways:

First, find a reliable and predictable source of traffic that you can scale.

Second, ensure you are able to effectively compete with your competitors including Amazon.

 Third, build a loyal customer base.

Finding Your Traffic Source

From the time that e-commerce has started in the late 1990’s through today finding a predictable traffic source has been the most important determinant of success selling products online.

In fact, it is why it is so tempting to be lured into Amazon’s call of the Sirens.

However, there are other good options beyond Amazon although they take some more work.

For my private clients, Google Ads and specifically Google Shopping continues to provide customers with substantial profitability selling products.

In addition, Bing/Microsoft Advertising can generate profitable traffic as well as Facebook and even good old organic traffic generated through optimizing elements within a website – aka – SEO.

Effectively Compete With Competitors While Building A Loyal Customer Base

When it comes to effectively competing in e-commerce, I’m not merely referring to price. If it were just about price, then it would be nothing other than a race to the lowest price for a product and your Amazon and Walmart stores would be the only ones left when the race is over.

Now you don’t have to necessarily have to be the lowest for price if your offerings show they are worth a premium. However, generally you do need to be at least in the ballpark when it comes to shipping.

Amazon has changed the landscape with customer’s receive orders from Amazon within 1-2 days after they place their order.

Today, for a customer to be willing to wait to receive their order more than 2 days , you are going to have to make sure products either are worth them waiting or deliver it in the timely manner they have grown accustomed.

Once you have determined your price and shipping strategies it is important to think about what sets your business and products apart from the competition.

Think about what you can give your customers that no one else can.

Is it a community, it is expert knowledge, is it keeping them informed on the best and newest products in a vertical that they are interested?

One steadfast technique to keep your customers engaged is constant communication.

Through email, through mailed catalogs or even through a newsletter, constant communication will keep your customers loyal, keep them engaged and keep them referring you to their friends.

The bottom line is in order to succeed, make your website and your product offerings different and of value compared to all competitors including Amazon.

Final Word

Selling products on Amazon is an effective way to promote your product line. However, with fees and advertising it can be quite expensive and there are downfalls and warnings that suggest that it may not be a viable long-term strategy.

I’ve worked with many companies that will spend all their time optimizing Amazon product pages while not working to promote their own website or optimizing their own product pages. Sometimes, they don’t even have a website to promote!

The current 2020 COVID pandemic is predicted to rapidly accelerate the growth of e-commerce. Many baby boomers and even generation Xers that did little to no online purchases have been left with no other choice then to shop online.

When things return to normal it is predicted that much of these online shopping habits will remain.

The question you must ask yourself is will you be ready?

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Happy Marketing!
Andy Splichal

ABOUT THE AUTHOR

Andy Splichal is the founder of True Online Presence, the founder of The Academy of Internet Marketing, author and certified online marketing strategist with twenty plus years of experience helping companies increase their online presence and profitable revenues. To find more information on Andy Splichal, visit www.trueonlinepresence.com or read The Full Story on his blog, blog.trueonlinepresence.com.