The Ups and Downs of Trading on Amazon

Posted: Oct 17, 2018
Simon Brownbill

Its founder Jeff Bezos is the world’s richest man – but these days is Amazon the beauty or the beast for e-commerce retailers seeking to expand their own businesses?


Hilary Large, an experienced marketing director, and e-commerce specialist, addressed the ups and downs of trading on Amazon at an event hosted by HURST, The Marketing Centre and Pannone Corporate.

Among those taking part in the discussion at Manchester’s Royal Exchange Theatre were representatives of companies selling goods online ranging from rugs and baby products to household appliances, gifts, hats, and bags.

HURST’s Simon Brownbill and Paul Jonson of Pannone Corporate said both firms have clients who are looking to grow their businesses via Amazon.

Paul also pointed out that a large number of Pannone Corporate clients have been affected by issues such as trademark and copyright infringements while doing business on the platform.

Hilary discussed these challenges and others, while also explaining the ways in which retailers can benefit from their presence on Amazon.

Hilary Large of the Marketing Centre  Hilary Large - The Marketing Centre 

It is especially useful for generating incremental revenue, testing and trialing new lines and trading obsolete stock, she said.

She also highlighted some of the intricacies of working with Amazon and the evolving online retail ecosystem.

The influence of Amazon is staggering. Hilary said it has 310 million active customers worldwide and sells more than 12 million products – even without including books, wine, media, and services.

By the end of this year, its global sales will top $210 billion.

Amazon is now the first choice of 52 percent of consumers when they are searching online for a product, which is higher than for Google.

Average conversion rates outstrip the average e-commerce website. The average across the top 500 e-commerce sites is 3.32 percent, yet on Amazon, it is 13 percent for non-Prime customers and 74 percent for Prime subscribers.

Hilary explained that Amazon is one of the best platforms for monitoring competitors to see how they are innovating, creating niche market opportunities and using keywords to promote their products.

It is also a valuable means of finding out what customers want and what they are searching for, as defined by the Amazon algorithm.

However, trading on Amazon presents challenges, with product imitation and counterfeiting high on the list. A successful product can be seen by anyone and rogue traders will copy it, which impacts on the genuine retailer’s business.

Hilary advised the participants about how they can better protect themselves and combat the threat from ‘dirty sellers’, although this can involve a lot of hard work.

Meanwhile, the ‘scraping software’ used by Amazon can affect selling prices. It enables Amazon to identify strong-selling items, find where they are available at a lower price and boost those up its listings.

This can often be to the detriment of the original retailer and happens regardless of whether the rivals are selling genuine goods, said Hilary.

While there is no ‘silver bullet’ to the challenges Amazon presents, Hilary said it was almost essential these days for retailers to use the platform.

She urged them to focus on reviews of their products, saying: “Review content is manna from heaven as it will improve your listings. The more reviews you can get saying the product is genuine, the better. Don’t underestimate how important the review is on Amazon.”

Perhaps above all, retailers should focus on their products rather than their brand.

Retailers should emphasise the product features and customer benefits, use high-quality images and attractive, compelling descriptions.

“Amazon are not interested in your brand, they are interested in their brand,” said Hilary.

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