Published: 2023-02-18 · Podcasts · Ricky Bandelin
If you're selling a physical product on e-commerce, there's a strong case for being on Amazon. Amazon is the world's largest e-commerce marketplace and accounts for nearly 40% of all U.S. e-commerce sales. But it's not right for every business.
Before jumping in, consider the fees, the competitive landscape, and the brand control implications. Amazon takes referral fees (typically 8–15% depending on category), FBA fulfillment fees, and storage fees. Your margins must be able to absorb all of these and still leave room for advertising.
The bigger strategic question is: do you want to build an Amazon business or a brand? Amazon gives you access to its massive audience, but in exchange, it owns the customer relationship. If long-term brand equity and customer lifetime value matter to your business, Amazon should be one channel — not your only channel.
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