Small Business

Small businesses discuss pros, cons of working with Amazon | Business News

While many small manufacturers and retailers weigh the pros and cons of being on Amazon, Lauren Haydel is on both sides of the issue.

Fleurty Girl, her 11-year-old boutique that sells T-shirts and furnishings inspired by New Orleans, doesn’t sell any items through the online retail giant. But the New Orleans Famous Praline Co., which she bought in 2019, sells candy through the website.

Keeping things that way makes sense, Haydel said.

“Fleurty Girl is more brand heavy. We’re offering things nobody else does,” she said. “When people buy from Fleurty Girl, they come to shop with us.”

In contrast, it makes sense to list a food product like pralines on Amazon. People are coming to the website specifically looking for the candy and Haydel wants to make sure the praline company is showing up in their results. “A Google search is not as good as an Amazon shop search,” she said.

Right now, the praline company’s online sales are split 60/40 between its own website and Amazon. But she said the scale is sliding toward more online sales through Amazon.

Even with the increasing business for the praline company, Haydel doesn’t ever see listing Fleurty Girl items on Amazon. “It doesn’t feel personal, and I love the personal relationship we make through sales,” she said. “It feels like a small handshake instead of a hug.”

Small-business owners selling online must weigh the pros and cons of listing their products on Amazon. For many, there’s no question — the company provides small businesses instant access to hundreds of millions of consumers worldwide. Companies without shipping departments can turn over packing and mailing to Amazon.

And selling on Amazon can help a company place high in Google and other online search results. But the costs can be hard for small companies to absorb. Another downside for some business owners is they don’t have direct access to customers who buy through Amazon.

The research firm eMarketer estimates Amazon’s share of the online U.S. retail market at nearly 38%.

While many companies want Amazon to help them get established, older businesses want to increase sales.

But Amazon isn’t always the best way for businesses to reach customers, particularly if they sell specific merchandise. They may find a greater number of customers on online marketplaces that focus on just one retail category — for example, Reverb for guitars and other musical instruments and accessories, or Newegg for electronics and components. Similarly, Etsy attracts buyers looking for crafts, vintage items, clothing and home furnishings.

At PreSonus, a Baton Rouge-based company that manufactures and sells audio equipment, Jim Boitnott, chief operating officer, said Amazon is just another retailer with a loyal customer base. “For us, dealing with them has been a good experience,” he said.

While PreSonus makes equipment for consumers and for professional musicians and producers, the company sells items aimed at the general household through Amazon. “That’s a site consumers are going to first,” Boitnott said.

PreSonus sells its Eris 3.5 speaker monitors through Amazon, which have been the top-selling reference monitors on the site for some time. “We’ve definitely had greater sales with Amazon,” he said. “Sometimes, success breeds success, and this has helped us.”

But overall, Boitnott said PreSonus’ online sales are “pretty even” among Amazon, other retailers and the company store.

Amazon may not be the right sales channel for many small businesses, said Will Haire, CEO of BellaVix, a consulting firm that helps companies develop online selling strategies. First, Amazon may not accept the products being sold. And if they’re low-priced items, a small business isn’t likely to make much money.

“Your margins should be 50% to 100% compared to your price,” Haire said. Companies should be prepared to advertise on Amazon to help themselves stand out, he said.

Marion Kaiser, owner and manager of the Louisiana Sunshine Soap Co., said her business is too small to go on Amazon. Kaiser started selling the handmade soaps out of her Sunshine home six years ago, after she retired from working for the state.

“I’m comfortable as long as the business is paying for itself and generating a little extra income for me,” she said. Kaiser does sell soap through her website; last year, she had nearly $1,400 in sales through her site.

“I’m doing so well locally, I don’t know if I want to overwhelm myself,” she said. “It’s just me; I don’t have any employees.”

Companies must also be ready to comply with the rules on any marketplace, not just Amazon. For example, not being able to contact customers to advertise or market a seller’s merchandise is an issue. That can be frustrating for sellers who want to follow up on a sale in hopes of getting repeat business. When business owners make sales on their own website, they have buyers’ email addresses — not so with online marketplaces that want their cut of a transaction.

While many owners understandably want sales from their own website, where they’re not paying fees, they’re not losing sales to Amazon, Haire said. Many shoppers, especially younger ones, prefer sites like Amazon.

“They’re less likely to go to somebody’s website and more likely to go to the marketplace,” he said.

Source

neallesh@yahoo.co.uk

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