Designers selling on Amazon

I was just wondering if anyone here had any good or bad experiences with designing and selling products on Amazon?

A friend was telling me about how people design products, get them sent to Amazon for them to store, and then they ship the product out. Being based in Australia this sounds very appealing to have access to such a massive audience but I can’t help but think that putting anything on there will just get lost in a sea of cheap crappy products.


Well, there are several challenges to bear in mind:

  • the cost of selling through Amazon (which is not trivial)
  • the marketing possibilities
  • the user experience

The costs seem to be fine at first but they quickly wind up when the sales stall. Here in Europe the monthly fee is 39 Euros, plus you pay Amazon 20% off every sold product. After being with Amazon for more than a year, I come to think the only reason for such extraordinary fee is the chance to be exposed to the enormous customer base. No other retailer (at least here in Germany) comes anywhere close to these fees. You either pay a monthly fee or some peanuts off a sale (peanuts, compared to Amazon’s 20%).

Now you think - OK, that margin is not that big, if you think that brick’n’mortar retailers want to have anywhere between 40-60%. Yeah, well, the only problem is the sea of products at Amazon where your products get lost right away. Marketing then? For the first three months you are not eligible for any marketing activities, like paid advertising. Yes, you don’t get to pay the monthly fee, too (the bait is working) but you also miss out on advertising within Amazon, too. So the first 90 days are just watching your product pages on Amazon and day dreaming. And then comes the hammer.

But I have to say, most of the sales I did went through Amazon. The user experience is a defining advantage here. On the other hand (at least European) Amazon for Business monthly paperwork is a nightmare. No transparency of what how when why I just paid this sum. My tax guy had a hard time keeping an eye over Amazon payments.

Oh, and if you want Amazon to fulfill your orders (store, ship and deal with returns), prepare to pay even more. The question is then if your margin will still allow you to reinvest in production and cover your costs (because you will surely cover those of Amazon, at full and immediately).

Now that I am writing this, I think I will probably be quitting Amazon altogether. It is just too expensive for a brand with a couple of products.

I definitely wouldn’t start on Amazon. Have you ever tried to find something there? Try searching for something non-specific, like an interesting dining chair or whatever. Hopeless, because they sell just about everything. Unless someone has already heard of your product, Amazon isn’t going to sell very many of them.

Fulfillment by Amazon used to be a better deal a few years ago, but now you need to be doing volume for it to be worthwhile, unless you really want to pay them to store your product for you. If you’re in Australia, Amazon will not be fulfilling product to other countries as far as I know. They certainly don’t going the other direction, unless you want to stock inventory in their fulfillment centers around the globe (shipping to the FC is on you of course).

Go talk to some local retailers and find someone who is willing to try it out on consignment. You’ll get an idea of whether it’s viable, priced right, etc. Then move on to focused e commerce sites, larger retailers in other cities, then start thinking about guys like Amazon, maybe.

They have long payment terms, take copious preemptive discounts for paying “early”, require damage allowance money, marketing money, and so on. They will also ignore your MAP policy and undercut all your other retailers, so be prepared to burn all those bridges you built getting to that point.

Thanks to both of you.

This wasn’t going to be a brand building product but I was thinking of designing something simple like a clock and put it on there to see how it goes and test the experience. When I did a search and it ended with 120,000 different clocks I was lost with how anyone could ever possible find mine let alone one that they liked (I am not the type of person to go past the first page of links let alone to the last paged products).

It seems I would need to build a brand to drive people to go to specifically my product and once it reached popular sales levels and the front results page then it would probably drive sales higher. I had a look around though and read a few horror stories as well where, because Amazon can see your profit margin and supplier details, they have cut out the middleman and gone straight to the supplier and then undercut you on price on the same thing which I find very odd/unethical.

If you are interested in doing this, I would strongly suggest that you check out “the freedom fast lane” podcast. I am currently designing several products for people I met in that community.

Unless you are successfully driving traffic from your other websites, landing pages or advertisements to your amazon product page, then yes the product will get lost within hundreds of thousands of other items.

I think amazon can be useful for using as a distributing (their FBA service) and payment platform since it is widely known and trusted. But you need to make your product visible by yourself first.