I am aware the subject bar is extreme , but I am just posting a small theory based on my own opinions and thoughts as to why I think amazon will loose reputability and market share in the e-commerce industry over the next 5-10 years based on my seller experiences. For arguments sake I am going to assume that a large portion of this community has sold or currently is selling on the amz seller platform.
While I was on the platform I found it extremely hard to justify a profit on amazon, rather the system would just suck me back into this massive black hole which at the time seemed to harder to climb out of each and every single month. While the business with amazon was growing I was not actually aware that my company was just loosing more money as the business with amazon grew larger.
I would like to go over some of the loop holes that amazon forced me to operator around in order to become a more "successful" account on the marketplace. I am sure many of you have experienced the same loop holes I was exposed to.
- Storing Goods at FBA. Amazon has set up a system where goods that are stored at they're fulfillment centers will sell quicker and get more exposure vs products that are fulfilled and sold via merchants at they're home or own warehouses. These circumstances apply for sellers who are selling the same goods or even goods being sold at a better price. They do this so they can collect more sellers fees not so they can actually help the customer get the goods quicker. Lets be honest, if amz really wanted to help the sellers wouldn't they be able to provide us with a 2 day shipping label for prime orders?
- Advertising Tools. This tool seems to be completely rigged to me. They want us to advertise on they're platform when in essences we are all out bidding each other to get a sale that is going to be way less profitable than we think because we had to bid for a key word to capture a sale. we have thousands of vendors bidding for key words like "14k gold" for instance, how do we know that we actually received the correct PPC for those key words and that they didn't over sell us on clicks? Better yet, we have thousands on vendors paying for sponsored ads…..The sponsored ads banner header spans about like 10 items. How do I know that I am actually reaching the audience AMZ claims my product is being show cased to? Cmon now, 150,000 impressions and only 3 sales? seems rigged to me.
- Maintaing Stock Levels. AMZ requires you to maintain a certain threshold of inventory at the fulfillment center in order to stay ranking at the top of the search engine. So for example, lets say a vendor sells 10 water bottles after advertising the listing they will now require you to stock an additional 30 water bottles at FBA in order to keep receiving orders on your listing. If you don't stock 30 water bottles or the recommend amount of inventory you will see sales start to drop dramatically.
- Incorrect Vendor Payments. I am sure that we are all victims of this but how many times has AMZ sent out an incorrect payment???How about every week lol. I think here is where they really get us, after all the seller fees we are required to pay amz are we actually able to track what our payments should look like? Try calculating the storage fees + seller fees + percentage fees + advertising costs + refunds and returns + FBA long term storage, is this all feasibly possible to keep track of?
These were just a few examples of the loop holes that AMZ sets us up in order to be "successful" on the platform which really just digs us into a deeper hole from my understanding. I think that an e-commerce giant will come around in the next 5-10 years, and figure out a way to perfect the flaws in amazon which will help bring down the greatest e-commerce giant In the world. sellers will then have to choice to abandon the marketplace and move somewhere else to sell goods and products.
I would appreciate if you guys would comment on your selling experiences and past history, and how you are dealing with the game we are forced to play.
Remember to be kind 🙂