Amazon: The Path to DIY E-commerce for SMBs
August 6, 2018 | Contributed by: Joe Morsello
According to Amazon’s “Small Business Impact Report” from May this year, half of all items purchased on Amazon come from small and medium-sized businesses (SMBs). In the U.S. alone, more than a million SMBs are selling on Amazon with the top categories including health and personal care, home, electronics, beauty, apparel, sports and toys.
Additionally, on Amazon Prime Day this year, SMBs worldwide exceeded more than $1 billion in sales within a 24-hour period. Clearly, Amazon is having a major impact on how SMBs sell products online. More importantly, Amazon offers SMBs a path to e-commerce that is, for many, DIY.
Historically, the term “digital storefront” has been a metaphor for a business’s website that communicates its importance for influencing online audiences. For local retailers, the growth in e-commerce has resulted in a more literal interpretation of the term. But given the investment that it would take to create custom e-commerce capabilities on an SMB website, third-parties, particularly Amazon, serve as alternatives.
From a profitability standpoint, owning all online sales is far more profitable. But for SMBs, the headache of building e-commerce capabilities, ongoing merchandising, maintenance, handling technical issues, etc., all make “rented” e-commerce space more enticing. Additionally, Amazon continues to enhance tools for sellers.
While SMBs have been selling on Amazon for nearly two decades, it wasn’t until last year that the company introduced “Stores” on Amazon which are “free, self-service, multi-page websites that can include curated product selections, videos, and images.” The Store pages offer retailers the following:
- Unique design: Sellers can select from a group of templates with varying store layouts and customizable features.
- Custom curation: Retailers can offer a dynamic or handpicked assortment of products and can also features videos and other multimedia content on the pages.
- Integrated promotion: Stores offers built-in social features for sharing products and pages as well as advertising options and capabilities to help further drive traffic.
Additionally, last month, Amazon announced new features allowing sellers to showcase deals on their Store pages. The announcement suggests sellers should develop a unique marketing strategy for Store pages that includes Amazon search ads, online ads outside of Amazon, social sharing and usage of the analytics/reporting.
Beyond enabling online sales, Amazon is becoming a powerful online advertising platform as well. According to eMarketer, Amazon is projected to hit $3.19 billion in U.S. advertising revenue by 2019 and is expected to reach 4.5% of all U.S. digital ad spending by 2020.