The Truth About Selling on Amazon
After 10 Years of Selling on a Centralized Marketplace, the Decentralized Marketplace has a Bright Future.
As a new decentralized marketplace, [ApolloX]( is asking centralized marketplace sellers about their experiences and how they feel about the future of decentralized marketplaces.
Amazon is the biggest marketplace, practically everyone in the world knows about Amazon, but not everyone knows what it takes to sell on the biggest centralized marketplace. We talked with Shawn, an Amazon seller who has been through the good and the bad.
Amazon has created the go-to place for all goods and generates billions of dollars daily. But Amazon has become harder to sell from, creating competition with their sellers and allowing fake reviews to be posted. Shawn has been an e-commerce seller on centralized platforms like Amazon and eBay for 10 years. With plenty of experience on the marketplace, Shawn gave us some insight to the perks and difficulties selling on a traditional platform.
What is your best selling product?
Shawn: “We have a lot of best selling products like the ip camera, earphones, humidifiers and hoverboards. Each of [these items] has sold over 5 million in North America per year.”
What is your best selling category?
Shawn: “Computer accessories, kitchen appliances and outdoor products.“
What was your gross merchandise volume (GMV) in 2017?
Shawn: “Nearly 1 billion U.S dollars.“
What are the average commissions you pay for Amazon & eBay?
Shawn: “About 12–15% depending on category, Mostly 15%.”
Shawn expressed some of great aspects of selling on Amazon, how much his company has grown and thrived, and also how Amazon makes it difficult for sellers to make a profit and creates competition. Amazon offers FBA (Fulfillment By Amazon) a service where sellers store their products in Amazon’s fulfillment centers, and Amazon picks, packs, ships and provide customer service for these products. But after years of success and more companies entering Amazon, they have raised the prices on FBA and commissions.
Tell us a little more about your selling experience on Amazon & eBay?
Shawn: “I sold the first item [on] eBay when I was a college student in 2008, I sold traditional Chinese craft silver necklace at about $4. That inspired my interest in commercial business. I tried to sell different items on eBay such as earphones and jerseys. When I graduated from the University, I made about $100,000 in total. I chose commercial business as my career because I thought it could connect people through the internet and products, meanwhile I could make money selling products. Until 2010 eBay issued a new policy called bad buyer experience… eBay was abandoned by millions of buyers and sellers. So eBay's market shares dropped a lot from 2010… From 2012 I was one of the first sellers on Amazon in China. Amazon provides a much better shopping experience for buyers. Not only a shopping experience but also the shipping [with] FBA. FBA is very great, Amazon solved a lot of pain point that eBay could not. Amazon provides a fair market, a reasonable policy and brand building opportunities. Anker is one of the top brands that raised from 2012, started with electronic products. Business grew rapidly at that time, thanks to Amazon offering such a good platform and good audience.”
What are some of the perks to selling on Amazon or eBay?
Shawn: “First, [with Amazon] we have plenty of customers, we don’t have to find the customers on Google or Facebook and we don’t have to build a new e-commerce market, we have a lot of customers already. That saves our time and money, we just focus on products and selling, we don’t have to spend our time building our own website to find customers. Second, these platforms have their own credit system for years, customers trust them. Additionally Amazon provided the FBA service for merchants to solve shipping issues and is reliable for customers”
Any difficult experiences selling on Amazon & eBay?
Shawn: “In recent years it has become very difficult now. First, it’s an unfair competition between us [the buyer] and Amazon, because Amazon has their own vendor, they can change some of the rules [in their favor] and [change] sellers listing on their own. Second, mechanisms between sellers, they play dirty by hiring hackers to write negative reviews on honest sellers and we have to fight back. It has become a negative [platform]. Third, nearly most sellers pay for fake reviews, they pay companies to write fake reviews on their products. They use fake reviews to mislead customers. Fourth, Amazon revises their policies very frequently, it can be dangerous sometimes, we [companies] have to change our selling structure to fit their policy. Sometimes our accounts will be suspended by Amazon because it doesn’t fit their policy. Fifth, Amazon is now a dictator, [any rules they change] they don’t allow us to appeal. Final, the higher and higher fees, especially promotional fees compared to past year, about 4x advertisement fees.”
What is an example where amazon changed their policy?
Shawn: “In recent days, Amazon was charging America, because of these fake reviews, that were reported to the media, [which forced them to] change their review policy. We have a very popular product, and all these reviews are not fake, they are verified purchase reviews and Amazon removed all these reviews, because they think our reviews grow very rapidly. Our product sells about 500 orders a day and we get 5 to 10 reviews a day. Amazon thinks its weird and eliminates customer reviews. We lose a lot and can’t appeal, because Amazon thinks we are manipulating the review. Not only us, but a lot of other sellers reviews were removed.”
Does the FBA fees change by year?
Shawn: “The FBA fee is growing rapidly from last year to this year, it grows about 40%. With promotion fees, a lot of new sellers and competition, Amazon needs them to pay much more advertising and promotion fees, the promotion fees went from growing 3% to about 12% per year, its nearly half of our profits, it doesn’t make sense to make so high.”
Selling through Amazon can grow your company in major ways, but can also creates an unfair marketplace with competition, greedy middlemen and high prices. Amazon puts the buyer first, which is great news for the buyer, they have perks including Amazon prime and easy refunds, but the seller loses money and has to change their system too often. After 10 years of selling on a centralized marketplace, Shawn is excited for the future of the ApolloX decentralized marketplace.
Check back for the next blog where Shawn expresses his opinions on the decentralized marketplace and how he expects to have a better experience than with Amazon.
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