When you think of Amazon shopping, what do you think of? Many of us imagine browsing through Fortune 500 brand listings and seeing all of our favorite iconic items in one location. To put it another way, you’re browsing an online mall for the world’s largest corporations.
Millions of third-party vendors, in reality, use the All Store to operate their own small and medium-sized businesses (SMBs). Perhaps even more shocking, these “mom and pop” ecommerce stores are vital to Amazon’s growth.
On Amazon, small brands reap a slew of financial rewards. From Amazon’s SMB Impact Study, below are a few examples:
- Small businesses list roughly half of all products sold on Amazon.
- SMBs in the Amazon marketplace in the United States will employ about 1.1 million people in 2020, up 133 percent from 2019.
- This includes work for delivery drivers—over 82,000, to be precise, by delivery service partners.
SMBs also help sellers and their families boost their quality of life.
While Amazon profits can be used to fund side-hustle fantasies like lavish acquisitions and exotic vacations, they’re more often used to pay off debt or support dependents such as children or elderly parents.
How Amazon helps small businesses develop and scale
Smaller brands flourish on Amazon, which hosts listings for some of the world’s best-selling items manufactured by the world’s biggest multinational brands (think Nike Sneakers, Samsung, and Microsoft). Some of the most important contributors to their performance are listed below.
Various business models are available.
SMBs can choose from a number of profitable business models on Amazon, and many do so simultaneously. Here they are, in order of seller popularity:
- Private label: 67%
- Wholesale: 26%
- Retail arbitrage: 19%
- Online arbitrage: 17%
- Dropshipping: 9%
Automated processes, time-saving marketing, and ready-made marketing
SMBs save time and money by selling on Amazon in many ways:
- FBA provides customers with quick Prime shipping.
- By listing optimization, in-house marketing systems increase exposure.
- Expert recommendations, live product demonstrations, and the all-important product reviews
- Virtually any commodity can be made thanks to an increasing network of high-quality suppliers outside of China.
- SMBs will attract millions of potential buyers thanks to Amazon’s massive reach.
- Amazon fulfillment can be integrated with other ecommerce sites, including Shopify.
As a result, 60% of third-party vendors spend no more than 20 hours per week on their Amazon companies, despite earning enough money to supplement their primary income.
Increased financial assistance
The number of financing solutions available to Amazon companies is growing.
SMBs can now select from various eCommerce financing options, ranging from microloans to million-dollar lines of credit, including those from Amazon. It’s simpler than ever to finance an SMB on Amazon, with more funding options targeted for online businesses.
And for beginners to entrepreneurship, selling on Amazon offers a viable opportunity to be your boss. Running an Amazon company is their first experience as a web entrepreneur for almost two-thirds of third-party sellers. It has more than paid off for many: 37% of Amazon sellers depend solely on their Amazon businesses for revenue.
Amazon’s Top Five Ways to Support Small Businesses
Customers who want to support small businesses will still do so on Amazon. All it takes is a little forethought.
1. Look for small business opportunities on the internet.
Start your product quest on Amazon’s “Help Small” page (type “small business” into the Amazon search bar to find it). You can learn about Amazon companies operated by women, families, or Black entrepreneurs and find the top items mentioned by SMBs.
Small brands in Amazon’s top product categories, such as Home & Kitchen, Toys & Games, and Beauty & Personal Care, are available for purchase via the “Support Small” tab.
2. Buy Handmade on Amazon
Amazon Handmade, Amazon’s artisan-only website, is now available to shop. There are no mass-produced items permitted, so you’ll only find hand-crafted, hand-altered, or hand-assembled goods in various categories.
3. Use Amazon to shop locally.
Shopping locally or regionally on Amazon.com and Handmade will help you make a more sustainable purchase. Amazon has made it easy to locate small business owners in your area thanks to a few new programs and search filter choices.
Small businesses should be supported.
You can explore goods by six U.S. regions on the same Support Small page listed above: Pacific, Rocky Mountains, Northeast, Southwest, Midwest, and Southeast. You will also learn about sellers in each region who have their own distinct products or stories to tell.
Local makers should be supported.
A curated collection of Amazon Handmade items produced by artisans from across the United States can be found on the Support Local Makers website. You can shop by country or by the state in the United States. Makers fulfill their orders, so you’re helping small businesses at every stage of the buying process.
4. Before making a purchase, look at the Buy Box.
If you’re looking for something in particular, check the Buy Box on a specific listing to see if a small company makes it. The Buy Box is the widget that enables consumers to make purchases; the “Ships from” and “Sold by” lines indicate who sells and fulfills the item.
Your dollars will not explicitly help a small business if the Buy Box says Amazon sells the product. If the “Sold by” section mentions a particular brand (that you don’t recognize), it’s likely a small business run by a third-party vendor. Even if the product “ships from” Amazon, this is true—after all, FBA is used by the vast majority of sellers. You can always check the brand’s Amazon page or Google them to see if they are small or local.
Read More: How to Make a Profitable Amazon Storefront
5. Submit a Review
The best way to show your appreciation for a small business—aside from purchasing from them, of course—is to leave a product review. Reviews are critical in assisting brands in determining how well their product suits consumer expectations and where improvements can be made.
Ratings and feedback can make or break a brand’s Amazon rating, and they’re particularly crucial in the first few months. If a small business wishes to thrive on Amazon, it needs as many reviews as possible.
A favorable review also serves as social evidence of a product’s efficiency, enhancing a small brand’s Amazon reputation.
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