10 Downsides to Amazon Business Explained
If you found this article, you probably have heard about Amazon business and its amazing features. It is hard to miss as many businesses have shifted to Amazon, maximizing its amazing features. I am sure you have read different reviews and heard success stories about how Amazon business transformed many people’s businesses and lives.Â
Amazon business is a brilliant platform that is mainly established for businesses with about 45,000 active sellers and over 10 million products. As we all know, there are two sides of a coin. Irrespective of the positive reviews you’ve heard about Amazon business, it is also important to know the disadvantages. This article will help you make better judgements when deciding whether or not to sign up. We will look at 10 downsides to Amazon business below.
Learn more about Amazon Business
Even though there are 10 downsides to Amazon Business, there are still plenty of advantages. I would still create an Amazon Business Account because not all of these disadvantages will apply to your business. Since it's free to create an Amazon Business Account, there is no downside to testing it yourself.
Also read: 20 Amazon Business Benefits
1 – Fierce competition
With an Amazon business account, you have access to millions of users on the platform. With this large audience, your sales are bound to increase. What you don’t know is that you aren’t the only person who has access to these users. There are many people like you that are also trying to penetrate the same audience. They also possess the same analytical and management tools that you have at your disposal. So, it is difficult to make enormous sales as there are more sellers on the platform with similar products.Â
2 – Limited relationship with customers
The fact that you have many users that need your products doesn’t guarantee a long-term buyer-seller relationship. It has been discovered that because of Amazon policy; you don’t have access to your customers’ contacts. This has hindered retention of customers. Amazon does this to curb the loss of users to other platforms and trying to monopolize the medium.Â
3 – Shipping services
The Amazon business shipping services are in four categories. The Free-same day delivery ensures you get your orders within a day. You can only use this service when you have $35 worth of Free-same day items in your cart. With the consolidated shipping service, you may not get all your orders delivered to your address. The shipping service has also weeded out some businesses. Businesses that involve bulky, commodity or low-margin products shouldn’t try to sell on Amazon as Amazon shipping services don’t cater to your needs.
4 – Little or no control
On various occasions, the Amazon business account has been compared to a business website. It has been greatly proclaimed that it’s better and time-consuming than building and owning your website. With Amazon business account, you are just another citizen of Amazon. You abide by the rules of the giant e-commerce platform or they kick you out. Amazon’s terms and conditions must not be violated. Unlike when you have a website for your business and you can upload anything you want and change the price of your goods when appropriate. There are amazing tools that you can use on Amazon business account to increase your brand’s awareness, but they may not offer the appropriate support for your business.
5 – Amazon business algorithm
It is no more news that we interact daily with highly sophisticated algorithms on Facebook, Instagram and so many others. Amazon is also not left behind as the algorithm is what links users to their needs on the platform. So, the question is how does this affect your product performance on the platform? There have been case studies and reports on how the algorithm affects businesses. In the physical marketplace, it is easier for a buyer or seller to recognize the change in the trend of a particular product with respect to demand and supply concept. On Amazon, your business may be doing well for a while and suddenly your sales reduce drastically over time. You start to wonder what you are doing wrong and you check your preferences; it is the same. This is what happens when an internal decision is being carried out after an unannounced Amazon strategic meeting takes place. You should learn how to get the most out of your amazon business account regardless of the algorithm.
6 – Amazon policies
You are wondering how Amazon policies become a downside to Amazon business. Amazon is a great and prominent e-commerce platform that cares a lot about its policies, and they are always seen in the activities that happen at the marketplace. Even after going through their policies, you don’t know how they automate the policies. Many Amazon sellers have recounted their experiences on how they were frustrated with violations of policies. There are many sellers’ accounts and products that have been removed inappropriately from the platform. Each business space has its own rules, so what applies to the automotive industry may not apply to the raw materials industry.
7 – Sales doesn’t come easily
One of the major reasons people join Amazon business is that somebody somewhere has told them that Amazon business boosts your sales margin. That’s not quite true. There are tools and the large audience that you need to make your business boom, but if you aren’t persistent with your branding, you won’t get the desired results. Many things change the nature of the marketplace, and if you don’t notice the change early, you won’t be getting results. The Amazon algorithm and policies are among the major factors that affect users’ behaviors. As an Amazon business user, you have to be on the lookout for what’s happening in your marketplace and how you can use that to your advantage. The tools provided by Amazon don’t work efficiently unless you know how to use them well.Â
8 – Poor care for sellers
There is a popular saying that customers are always right. In the case of Amazon, the users are the customers that are always right. Amazon doesn’t care about the sellers, although you are also a customer and a subscriber to Amazon services. There have been cases where Amazon users abused sellers and they got away with it. Not only that, when they complain about your product, they get the products for free and there is no measure taken by the company to protect the sellers. It is obvious that Amazon cares more about its users than third-party sellers.
9 – Difficulties in selling wholesale products
You have been told that Amazon business account is mainly for businesses. But this doesn’t apply to people who engage in wholesale products. As a new user of Amazon business account, the manufacturer may not approve you to sell their products. They believe that as a newcomer you can’t push their sales and their reach. That’s not all on the wholesale issue. There is another issue with the tight competition with listings. You aren’t the only one selling wholesales. The company you are working for isn’t the only producer in its business space. Unless you have a big idea product, you will be added to the regular sellers. There are difficulties involved in launching a big idea marketing strategy, as you don’t have unrestricted access to your customers, thanks to Amazon policies.
10 – Fees
It is normal to pay for such amazing features provided by Amazon business. It is a pay-to-play channel. Here are the fees you will experience when you are on an Amazon business account: monthly subscription fees, commissions and referral fees. There is also a low incentive to offer products at bulk prices. If your business operates on low-margins, then you should know that this is a major disadvantage for your business. The fee structure of the platform is also complex and differs from product to product.
Conclusion
There you have it; the 10 downsides to Amazon business account. There is no perfect market system in the world, so you can give Amazon business a trial. Open an account today for free to assess their services.
