Pros and Cons of Selling on Amazon vs Building Your Own E-commerce Platform

Selling on Amazon and creating your own e-commerce store each offer advantages and disadvantages that depend on the goals, resources, and preferences of your business. Here is a breakdown of some advantages and disadvantages of selling on Amazon and launching your own e-commerce site.

Advantages of Selling on Amazon

Selling on Amazon provides immediate access to a vast customer base. With millions of active users worldwide, Amazon makes it easier to reach potential customers actively searching for products. Additionally, Amazon is known for its trustworthiness and offers excellent security measures and customer support, providing a sense of security for both buyers and sellers.

Availability of Fulfilment Services

Amazon offers Fulfillment by Amazon (FBA) which handles warehousing, packaging, shipping, and customer service, saving time and effort. The process is straightforward, making it ideal for newcomers to e-commerce. Furthermore, Amazon's search algorithm can help optimize your products for better visibility, expanding your reach globally as Amazon operates in various countries.

Disadvantages of Selling on Amazon

While selling on Amazon has its benefits, it also comes with several drawbacks. Amazon charges several fees such as referral fees, fulfillment costs (if using FBA), and professional seller account subscription fees, which can significantly impact your profits. Moreover, the competitive landscape on Amazon can be fierce, and it is easier to stand out if your product or marketing are truly outstanding.

Limited Brand Control

Marketing on Amazon means you are subject to their rules and policies, limiting how you can present your brand and customer experience. Additionally, with limited customer data available, businesses may struggle to form direct relationships with their customers.

Risk of Suspension

There is a risk of account suspension or ban if you violate Amazon’s policies. This can interrupt your business operations and cause significant disruption.

Lack of Customization

Your ability to tailor and brand your presence on Amazon is limited. Having your own e-commerce site could provide a more personalized experience.

Advantages of Launching Your Own E-commerce Site

Building your own e-commerce site offers significant advantages. You have full control over branding, design, customer experience, and building a unique identity. Without marketplace fees, a greater portion of your sales revenue remains with you. Additionally, direct customer relationships can be established with access to customer data, allowing you to build long-term relationships.

Customization

Your website can be tailored to meet the unique business requirements of your company, offering more flexibility in features and functionalities.

Long-Term Ownership

Your website is yours to own, and it can be sold as an asset should the need arise.

Disadvantages of Starting Your Own E-commerce Site

The initial setup costs for an e-commerce site can be significant, requiring investments in web development, hosting, and security services. Marketing and traffic generation need to be managed independently, which can be more challenging. Establishing customer trust may also be more difficult for a new independent e-commerce platform compared to established platforms. Order fulfillment involves overseeing all aspects such as storage, shipping, and customer services. Technical issues on your website can be time-consuming to resolve.

Conclusion

Acore, Amazon provides immediate access to an expansive audience and can be an ideal starting point for new businesses. However, with fees, limited control, and competition, it also comes with limitations in branding opportunities and long-term advantages.

Building your own e-commerce site offers more control, branding opportunities, and long-term benefits, although it requires more upfront investment and efforts in marketing and customer relationship building. Many businesses choose to leverage both options by using Amazon as a sales channel while maintaining an independent e-commerce presence.