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A lot of people are convinced, that supporting small and medium-sized businesses (SMBs) empowers a country’s economy. This is definitely true, as far as by supporting SMBs, you’re promoting the local communities. Buying locally stimulates regional business booming within your locality, creates jobs, and attracts shoppers and tourists.
That’s why if you prefer to buy from SMBs, it seems that Amazon is out of the picture. However, in reality, this looks very different. According to the 2020 Amazon Small Business Impact report, more than half of the products sold on the Amazon marketplace come from Amazon small businesses.
Amazon and Small Business: Extremes Meet
According to Amazon, promoting SMBs is a fundamental part of its customer-centric culture. It’s no wonder that Amazon sees value in investing in the success of SMBs selling on Amazon.com or providing third-party services: the more their business grows, the more benefit for Amazon business.
In the U.S., Amazon works with more than 2 million independent sellers, authors, content creators, developers, delivery businesses, and IT solution providers. The platform provides them with the undisputable opportunity to reach millions of buyers in the U.S. and internationally, and grow their business. SMBs selling in Amazon’s Store come from every state in the U.S., and more than 130 countries around the world.
Also, SMB sales outpace Amazon's first-party sales, and this is probably a good reason why during 2019 and 2020, Amazon invested more than $30 billion in logistics, tools, services, programs, and people to foster the growth of our SMB sellers.
“Our success depends on their success,” said Jennifer Kuznicki, Senior Program Manager, Small Business Empowerment at Amazon, referring to the support of small and medium-sized businesses by the marketplace.
He added that this was also the reason why Amazon launched Amazon Small Business Academy, a program that empowers small business owners to be "successful sellers, authors, makers, service professionals, and delivery service providers."
Five Ways to Support Small Businesses on Amazon
The marketplace team has developed a lot of different programs promoting a small business on Amazon, and if your intention is to buy from an SMB entrepreneur, you can easily do so on the platform.
1. Support Small
You can find goods sold by SMBs on a special page dedicated to the goods produced by a small business selling on Amazon. Here you can find a vast assortment of products in the categories of Home and kitchen, Jewelry, Toys and Games, Handmade, Beauty and personal care, etc.
2. Shop Local
There is one more option from Amazon to support SMBs. On the same page, you can find a section called ‘Shop Local’, where you can shop locally or regionally. There you can find products from six U.S. regions — Pacific, Rocky Mountains, Northeast, Southwest, Midwest, and Southeast.
3. Amazon for Business Owners
The third option is to consider buying from a local small business on Amazon in the ‘Meet the Business Owners’ section on the same page. You can read seller stories and shop for unique regional brands.
4. Leave a Review
One of the good ways to support SMB sellers is to leave a positive review and recommend products to your friends. Positive reviews are considered by Amazon when they determine seller ratings. Positive reviews are also very important for building a solid and credible brand.
5. Shop Amazon Handmade
There is a special page on Amazon called ‘Amazon Handmade’. If you are fond of handcrafted items, you can find a variety of those from all over the world on this page and support their makers by buying something you like.
If you are a small business owner and don’t know how to do business on Amazon, don’t worry. It is fairly easy to start and, as an individual, you can set up your account free of charge. As an established and one of the biggest world’s marketplaces, Amazon attracts a vast international audience to your product. It is tailor-made for any scope of business, either small, medium, or large. It is also a good place to start Amazon local business.
There is not a big difference between small and large business processes on Amazon, the scale differs. You can grow your small business marketing to a large one if you are brave, creative, consistent, and equipped with proper knowledge.
When you are considering starting your e-commerce business, you need to have a plan on how to do it. If you don’t have any experience of online sales, Amazon.com is a good option as this platform has extensive tools of Amazon for a small business on the platform itself and third-party software to help you make your sales success. You can read SageSeller guide as to how to become an Amazon seller here.
Amazon offers a special ‘Build your business with Amazon’ to small business owners.
There you can find Amazon advice as to how to get started, create merchandise designs and earn royalties with no upfront investment, and find out how Amazon prime works for a small business. Amazon prime for a small business, called ‘Business Prime Essentials’, is a $179/year membership for small business owners, to add work benefits to their Amazon Business account. You can add up to 3 users to the account. We also mentioned above the ‘Amazon Handmade’ option, where SMBs can sell crafted products.
The variety of products SMBs can sell on Amazon ranges from the products of your own design, like T-shirts with images, and handcrafted items, to vector graphics solutions.
As said, SMBs can also participate in Amazon Small Business Academy, a program intended for small business owners' training.
Also, Amazon developed a number of Small business offers to help SMBs run their business remotely, communicate and collaborate virtually, build websites and apps, and manage their costs. You can find the corresponding list here.
The Pros and Cons of Putting Your Small Business on Amazon
Having in mind that Amazon gives you a lot of opportunities as a small business, they also charge a lot of fees for its serviсes, as well as have a lot of rules you need to follow. Therefore, consider the pros and cons before starting your business on Amazon and Amazon effect on a small business.
Pros
- Access to millions of existing Amazon customers throughout the world;
- Amazon helps SMBs with all stages of business process, from managing a website, and processing payments, to storing inventory, picking, packing, and shipping their products if they choose Fulfillment by Amazon method;
- Amazon offers a lot of business tools for SMBs on the platform itself, as well as there exists a variety of third-party seller software helping you make business.
In other words, Amazon is the world's largest online marketplace, providing not only perfect reach but also a lot of seller tools and programs to support SMBs. Amazon has an incentive to support its sellers, as this is a vital part of their business.
Cons
- Amazon services have a cost: in addition to a monthly charge or a referral fee (around 15% of the sold item price), there are a lot of Amazon Fees, especially when you choose FBA;
- There is a lot of competition, including that from Amazon;
- Amazon has a lot of rules you need to follow, that are frequently amended;
- As the marketplace’s operation is huge, there is always a risk of mistakes.
In other words, Amazon charges quite a price for its services (all in all average around 30% of the sold item price) and has quite strict rules of the game. If you don’t perform as Amazon expects you to, they wouldn’t allow you to sell on the platform.
