The Merits and Shorts of Amazon for Sellers

Amazon can be regarded as a giant in the global e-commerce field. It is not only one of the largest e-commerce platforms in the world, but also the largest cross-border e-commerce platform and the largest online shopping platform worldwide. It offers a wide variety of products, covering millions of items such as books, electronic products, toys, food, clothing, automobiles, and industrial products, almost meeting consumers' needs in various fields.

Advantages:

1. Low competition level

The current domestic e-commerce platforms are becoming saturated. The market is mostly occupied by large manufacturers, well-known brands, Tmall stores, and big sellers. It is difficult for new sellers to get a share, and the price competition is fierce, making it difficult to break through. However, the competition on the Amazon platform is relatively small, and operating here often yields twice the result with half the effort.

2. Ranking and evaluation mechanism

Amazon does not have a button to rank by sales volume. Consumers cannot directly choose products with high sales volume. This avoids excessive concentration of traffic on big sellers, giving every store a sales opportunity. Moreover, all stores are evaluated based on stars. Unlike some domestic e-commerce platforms that do not have a bad review entrance, Amazon treats all stores equally. This fair environment is more conducive to the development of stores.

3. No need to hold inventory

Through the Amazon cross-border platform, Chinese products purchased from domestic e-commerce platforms are exported abroad to earn the price difference. Purchases are made after customers place orders, without the need to stockpile goods in advance.

4. High product profits

The labor and production costs in China are relatively low, while the consumption level in developed countries in Europe and America is high. A product that costs 10 yuan in China can be sold for 10 US dollars or 10 euros in Europe and America. The profit margin is huge (up to 40% - 200%), which can earn both the cost difference and the exchange rate difference.

5. No need for full-time customer service

There is a time difference between countries. Amazon shopping does not have an instant chat tool. Buyers and sellers cannot communicate directly. There is no need for a dedicated customer service to be online for a long time to reply, saving labor costs. Foreign buyers usually send emails for inquiries, and a reply within 24 hours is acceptable. Moreover, the average cultural level in developed countries is relatively high, and the return rate is lower than that of domestic e-commerce platforms.

6. Low return rate

The international return process is more complicated. Even if some people want to return goods, they are reluctant to operate. Coupled with the relatively high average cultural level in developed countries, the return rate is lower than that of domestic e-commerce platforms.

7. Light-asset entrepreneurial model

Zero deposit is required. There is no need for a deposit or entry fee. There is no need to stockpile or prepare goods. It also provides many popular products and supports one-click dropshipping. From the opening of the store, there are teachers to guide the selection of products, provide popular products from overseas warehouses, one-on-one operation teachers to guide, including the use of ERP and transfer warehouses, and provide lifelong store guidance and diagnostic services. It has an independent technical team that can ensure the upgrade, maintenance, and update of the subsequent software system.

Disadvantages:

1. Due to its high popularity and influence, Amazon attracts many sellers, resulting in intense competition on the platform. The entry threshold for sellers is also high, and certain qualifications and conditions are required. To stand out, sellers have to redouble their efforts.
2. Amazon has strict requirements for sellers' behavioral norms, covering product quality, after-sales service, and intellectual property rights. If sellers violate the rules, they may be punished or even have their stores closed. Therefore, sellers must strictly follow the rules during operation to avoid violations.