Tuesday, February 20, 2018

Small-business owners selling on Amazon must be prepared to meet high expectations

RALEIGH, N.C.

In July, jewelry company JousJous was featured on Amazon.com's homepage.

Sales spiked from about six to 12 pieces a day during a typical slow July to more than 263 orders and 479 units in that single day.

That moment has JousJous co-founder Hernan Moyano singing Amazon's praises.

JousJous, which donates 10 percent of its sales to breast cancer research, has a compelling story and unique jewelry, mostly imported from Latin America. However, it was also the exposure to Amazon's millions of customers that resulted in the sales spike, Moyano said.

"It was a huge boost obviously," said Moyano, 41, of Raleigh.

Amazon was the partner JousJous needed to reach customers and ensure a trusted and secure sale, Moyano said. After just one year of selling on the website, JousJous had a more than 1,000 percent increase in sales.

Amazon, however, isn't for every small-business owner eager to step into the e-commerce marketplace. Sellers have to be prepared to deliver quality products to customers who are accustomed to fast shipping and responsive customer service, small-business owners and others said.

While Amazon is a tool for some small businesses, it can be a thorn in the side of the "shop local" movement. Amazon's emphasis on competitive pricing, along with its mobile price-checking features, makes it hard for local shops to compete. Also, sellers on the online marketplace are competing with Amazon itself.

Every marketplace draws in different kinds of sellers, said Scot Wingo, CEO chairman of the board and co-founder of ChannelAdvisor, a Morrisville, N.C., e-commerce software company that helps global retailers integrate and manage online sales across multiple online channels. Etsy is all about handcrafted items. EBay is largely known for collectables, used items and excess inventory.

"I would say Amazon is kind of the suit and tie of the marketplace," Wingo said.

Amazon is typically ideal for businesses with annual revenues north of $200,000, sellers of high-end products with narrower markets, or manufacturers with hundreds of items.

"We'll find these companies that are essentially two or three employees and they are doing millions of dollars of sales online by leveraging Amazon services and fulfillment services," Wingo said.

Amazon measures every part of a transaction, from when sellers say they were going to ship items to answering questions about the products. One bad rating or slow response risks a ding that could bury their products in the Amazon search shuffle.

You can have the lowest-priced product, Wingo said, but if you have an 80 percent feedback rating, "you're probably not even going to show up on the first page."

Peter Faricy, vice president and general manager of Amazon Marketplace, said selling on the website is open to a range of purposes, from an individual recycling book club reads to a business selling office supplies.

Sellers can sign up by clicking on "Sell on Amazon" at the bottom of the Amazon.com page.

Those who plan to sell less than 40 items a month can sign up as an individual seller. The cost is 99 cents for each transaction in addition to a revenue-share fee, which ranges from 6 to 25 percent of the sale depending on the product, Faricy said.

Professional sellers pay a monthly fee of $39.99, which includes access to various tools and feedback to help sellers track and improve sales, in addition to the revenue-share fee. For some product categories, sellers may not create product listings without prior approval from Amazon. And some categories are not accepting new vendors at the time.

Sellers can increase sales quickly by identifying high-selling items in their category and adding it to their inventory within 10 to 15 percent of the lowest-priced item, Wingo said.

The most successful sellers have had the benefit of time to build customers, Faricy said.

"E-commerce is something that really builds and builds over time," he said.

At first, Blaise Kielar, owner of the Electric Violin Shop in Durham, N.C., was reluctant to sign up with Amazon and pay the 15 percent revenue-share fee. Kielar, who started selling on Amazon in 2011, said he appreciates the exposure, but he is still struggling to understand how to navigate and gain traction on the site.

"There is definitely a learning curve," said Kielar, who turned to ChannelAdvisor about three months ago to help him with Amazon and other channels.

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