These days, millions of small businesses – not only in the U.S., but around the world – are trying to increase their footprint when it comes to e-commerce, but the going isn't always easy. Because there are so many competitors in this field, it's hard to gain an initial foothold, and as such it seems that many companies are throwing in their lots with larger, more established e-commerce brands.
Perhaps the biggest of these is the Amazon Marketplace, which as the name implies allows companies to sell their wares through the e-commerce giant, and it seems many small businesses are having significant success in trying to do so, according to a report from The Street. The marketplace now has more than 2 million independent vendors, and helped sell more than a billion products last year alone. That number was up 65 percent from 2012's figures. Further, sales in June alone had increased more than one-third on an annual basis.
A word of caution?
However, for small businesses in particular the decision to get into the Amazon Marketplace is one that has to be weighed carefully, the report said. While the support of Amazon helps them reach potentially millions of new buyers, and speed up the shipping process, there's also the matter of what companies pay to participate. Amazon gets a percentage of every sale made through the site, as one might suspect, and therefore businesses have to be able to strike the right balance between covering that cost, keeping their offerings competitively affordable, and still making a worthwhile profit themselves.
However, because Amazon often allows for free shipping in many cases, the ability of some companies to succeed with this plan actually increases, the report said. In the past, firms selling heavier products often had to charge large amounts for shipping, and that usually serves as a turnoff to all but the most interested buyers.
"If it wasn't for Amazon I don't know where my business would be right now," Dave Wagner, chief executive officer of the Amazon Marketplace participant Wagner Concepts, told the site. "Thanks to the Amazon program I can pass on my savings to my customers and offer them reduced or even free shipping now. I have only positive things to say about them."
Owners who want to put themselves in the best position to succeed going forward might want to consider the ways in which they can cut ongoing costs. That could involve finding more affordable small business insurance, including liability insurance.