Is Amazon Still a Viable Option for Small Businesses in the UK? Exploring Success Strategies Amidst FBA Competition and High Fees

[Biz1990]

Asking on behalf a friend.

Considering the challenges of starting a new seller account on Amazon, particularly with the lack of proven UK-based mentors and Amazon's dominance in the e-commerce sector, do you think it's still worth it for small businesses to invest in Amazon? Or should they focus on building their own websites and independent online presence to sell their own products?

What are your thoughts on the viability and success of each approach in today's market? Amazon seems so congested with competitors in the FBA field. Is there anyone on UKBF who has actually succeeded on Amazon and is making a full-time living? From my research, it seems that creating a new product is the only way to succeed on Amazon. It’s about making something unique, solving a problem, patenting it, and then selling it online. Otherwise, why sell cables when there are thousands of Chinese sellers saturating the UK platform? (this is what my friend wants to do)

Question: How do these companies manage to stay profitable, especially with Amazon's high fees? FBA seems the only viable option, as ranking is limited if using FBM (Fulfilled by Merchant) since Amazon restricts the Prime badge and ranking. It feels like Amazon has become quite monopolistic, with Europe's online shoppers heavily relying on the platform.

What is the strategy for being successful on Amazon UK? Your opinions.

Thanks All.

 

[Paul Kelly ICHYB]

Welcome.

Whilst it is nice for you to visit here for a friend, for them to really learn, develop and grow, they should be personally posting!

DOn't think af Amazon fees as a cost - look at them as the marketing cost to get in the market.

Amazon should never be an exclusive outlet, but part of an overall strategy. When you friend writes their business plan, they should bare that in mind.

We do have several people on here that trade successfully on Amazon - they might even come and contribute.

 

[Biz1990]

Welcome.

Whilst it is nice for you to visit here for a friend, for them to really learn, develop and grow, they should be personally posting!

DOn't think af Amazon fees as a cost - look at them as the marketing cost to get in the market.

Amazon should never be an exclusive outlet, but part of an overall strategy. When you friend writes their business plan, they should bare that in mind.

We do have several people on here that trade successfully on Amazon - they might even come and contribute.

Thanks ill pass the message onto to him hopefully he'll post on here, ill show him this thread, hopefully we get more responses and opinions also. Thanks again and thats promising to see several successful people trading here on amazon

 

[BusterBloodvessel]

Asking on behalf a friend.

From my research,

Your research, or your friends research....?

 

[AlanJ1]

especially with Amazon's high fees?

I hear this time and time again. Why do you (or your friend) think Amazons fees are high?

 

[Biz1990]

Again its a question for a friend thats it, answers or no answers on here doesnt effect me one bit. Concerning the amazon fees, @AlanJ1 whats your experiences on amazon be nice to get your intake on it. Concerning the fees just quoting on what my mate said.

 

[AlanJ1]

Again its a question for a friend thats it, answers or no answers on here doesnt effect me one bit. Concerning the amazon fees, @AlanJ1 whats your experiences on amazon be nice to get your intake on it. Concerning the fees just quoting on what my mate said.

I have sold tens of millions of £s worth on Amazon over the years with best-selling products from own brand to other peoples brands.

The fees are tiny in comparison to what most businesses will pay in website marketing and customer aquisations costs as well as Amazon almost being risk adverse as you pay £30 a month and pay a fee when you sell versus say your own site could spend thousands of £s in marketing for zero sales.

 

[Paul Kelly ICHYB]

The fees are tiny in comparison to what most businesses will pay in website marketing and customer aquisations cost

This.

Every time.

 

[BusterBloodvessel]

Why doesn’t your mate sign up?

 

[Pish_Pash]

Again its a question for a friend thats it, answers or no answers on here doesnt effect me one bit. Concerning the amazon fees, @AlanJ1 whats your experiences on amazon be nice to get your intake on it. Concerning the fees just quoting on what my mate said.

I don't think Amazon's fees are particularly outrageous

They will store my products, collect payment for an order, pick, pack ship my order...handle customer enquiries...generate invoices, handle returns ...for £4.72 (including packaging + shipping the product out) on a £15 order...that's an awful lot of value they are adding there (given that it costs me about £2.30 to ship it myself (& I have to buy my own packaging)

i have no employee costs, pensions to provide, canteen / toilet facilities etc. ...basically I have Amazon 'virtual workers' busying away ...... providing me with scale with no real burden whatsoever. Amazon also provide me with great 'reach' into their EU marketplaces without having to register for VAT in those EU countries (remote fulfilment).

Finally, my Amazon sales dwarf Ebay sales...because customers like the security that buying via Amazon provides them with (vs Ebay). So you're getting a lot of added value in those fees.

 

[Ozzy]

Probably one for @AmazonGeek to pop along and add some input to also.

 

[Mark T Jones]

I'd strongly suggest that your friend joins personally.

Cheap and expensive are always relative and contextual terms - without insight to what they're comparing with, what margins they operate on and what insights they have to markets it's really impossible to comment in a meaningful way.

 

[DoolallyTap]

If your special product is successful on Amazon it will not be long before they find your supplier and negotiate better terms and start selling for themselves, cutting you out.

 

[Greg PW Shearman]

I have just signed up to sell our Brownies on there , this is in addition to selling them at our shops and online via our own website....

As others have said this is a way to grow , another sales line.

 

[AlanJ1]

If your special product is successful on Amazon it will not be long before they find your supplier and negotiate better terms and start selling for themselves, cutting you out.

Absolutle rubbish. Another myth.

Amazon very rarely brand products themselves anymore (they did this for a very short period in the past).

What Amazon MAY do is if you are successful is try open a conversation with you about branding it under one of Amazon's brands but order through you. Amazon own 7/8 product labels doing this and over 90% of the products Amazon don't make themselves.

 

[Mister B]

Absolutle rubbish. Another myth.

Agreed, but what is not a myth, is that you create your own product, have success with it, and in a matter of no time at all there are multiple versions of it created by Chinese sellers who proceed to drive the price down. Only way to combat this is to continue to innovate and for existing products, make sure that you remain on top of your game so that you maintain presence and sales. But it is a constant struggle.

Amazon is here to stay and should only ever be seen as another sales channel. For sure, grow business there but at the same time, make sure that you have other routes to market.

Trading on Amazon is like trading on eggshells. And they really do hold all of the cards.

 

[AmazonGeek]

A bit late to the party - sorry crazy busy at the moment. To take on a few points...

do you think it's still worth it for small businesses to invest in Amazon? Or should they focus on building their own websites and independent online presence to sell their own products?

100% yes. But it depends on the product. If it is identical to those already being sold on Amazon and those listings have lots of good reviews, then probably not. Why would a customer buy from a brand-new listing that has no reviews unless there is something to differentiate your product from the rest (and it can't be just price). If on the other hand your product is better quality and/or does something the others don't/can't do then and you make a great listing, then you have a good chance.

especially with Amazon's high fees

As with other comments above, good luck trying to find a cheaper way to reach as many people. You need traffic and one way or the other you will need to pay for it. Amazon's 15% is pretty good value for money considering. The same for FBA costs (unless you are selling really big and heavy items) - in most cases it is cheaper than trying fulfil orders yourself, especially when you account for all the other costs (warehousing, insurance, pickers/packers, etc).

as ranking is limited if using FBM (Fulfilled by Merchant) since Amazon restricts the Prime badge and ranking

You can qualify for the Prime badge if you fulfil orders yourself by using SFP - Seller Fulfilled Prime, although it isn't easy to qualify or maintain. There has to be a very strong reason for FBM rather than FBA, given all the advantages.

do you think it's still worth it for small businesses to invest in Amazon?

Absolutely, but it is all about product, product, product. If you have the right one you can be terrible at Amazon and still do well. If you have the wrong one, you can be amazing at Amazon and still fail dramatically. So, is your product a good one or just the same as everyone else's?

What is the strategy for being successful on Amazon UK? Your opinions.

- have a great product
- learn Amazon backwards - competitor analysis, keyword research, how images should work, policies, PPC, listing creation, FBA, etc

Done right, it can be amazing. I have loads of clients of all shapes and sizes, many of which have built their Amazon business to the point where it practically runs itself. Done wrong it can be very frustrating and expensive.

If you want a Zoom, use the link below to book one in (this goes for anyone by the way) - no cost or obligation. Happy to have a chat...

Discovery Zoom call - Adrian Meakin

30-minute free, no-obligation Zoom call to see if I can help you with Amazon.

calendly.com

 

[Socio South West]

If your special product is successful on Amazon it will not be long before they find your supplier and negotiate better terms and start selling for themselves, cutting you out.

Unlikely - Much more likely that some unspecified personage will find your products, trace your supplier and either get a dropship arrangement with your supplier, or stock themselves and undercut you on Amazon... bag the ' Buy Box' and all the other weird wacky and wonderful things that those who specialize in Amazon can do.

Amazon is a minefield for the unwary - Better to get someone with specialist knowledge of Amazon on board to deal with your Amazon marketing.

 

[AmazonGeek]

If your special product is successful on Amazon it will not be long before they find your supplier and negotiate better terms and start selling for themselves, cutting you out.

I missed this first time and yes, I agree - absolute rubbish, provided you have a trademark and are on the brand registry. A common misunderstanding of the way the catalogue system and registry work.

 

[AmazonGeek]

Agreed, but what is not a myth, is that you create your own product, have success with it, and in a matter of no time at all there are multiple versions of it created by Chinese sellers who proceed to drive the price down. Only way to combat this is to continue to innovate and for existing products, make sure that you remain on top of your game so that you maintain presence and sales. But it is a constant struggle.

They can only drive the price down on their own products, not yours, provided you have a trademark and are on the brand registry. If not, they can add their offer to 'your' listing and then you are in trouble.

This is business life in general - if you come up with a good idea it will get imitated, unless you have design/utility patents. If you do, by the way, it is easier to fight them on Amazon than off. If you don't have that protection and/or if your idea isn't innovative enough to get it, then expect to be copied.

Yes, of course you continually need to innovate - that is true for all businesses. If you stand still you will be caught. Just look at any bog successful company/

And yes, you continually need to remain on top of your game. Why would you expect to keep winning if you don't? Those that do will just overtake you.

So, lots of comments that apply to business in general and not just Amazon.

 

[AmazonGeek]

Unlikely - Much more likely that some unspecified personage will find your products, trace your supplier and either get a dropship arrangement with your supplier, or stock themselves and undercut you on Amazon... bag the ' Buy Box' and all the other weird wacky and wonderful things that those who specialize in Amazon can do.

Amazon is a minefield for the unwary - Better to get someone with specialist knowledge of Amazon on board to deal with your Amazon marketing.

Again, as long as you know what you are doing you can protect against this. A common misunderstanding that Amazon can just undercut you on your branded listing.

Totally agree with the second point - after all that is what I do all day long

 

[Socio South West]

Totally agree with the second point - after all that is what I do all day long

And may the Lord have mercy on your soul....

 

[AmazonGeek]

And may the Lord have mercy on your soul....

Ha ha - yes, it can be interesting lol. But also very rewarding

 

[fisicx]

The thought of having to work all day at anything sounds awful. I’ve spent 10+ years doing less and less and I find that very rewarding.

 

[AmazonGeek]

I actually have a really great work-life balance, coaching when I want with the Amazon business running on autopilot in the background. I simply meant it is what I do 100% of the time when I AM working, so I know it backwards

 

[AlanJ1]

I actually have a really great work-life balance, coaching when I want with the Amazon business running on autopilot in the background. I simply meant it is what I do 100% of the time when I AM working, so I know it backwards

I actually do similar in my spare time with Amazon coaching, it's an interesting job - Unsure I could do it full-time. Ironicaly my full-time job in E-Commerce we do <1% on Amazon!

 

[AmazonGeek]

Unsure I could do it full-time

Me too sometimes lol

 

[Pish_Pash]

I'm actually an Amazon seller ...and an Amazon supplier - both are head trips (for differing reasons)

 

[Jeric Torreon]

Asking on behalf a friend.

Considering the challenges of starting a new seller account on Amazon, particularly with the lack of proven UK-based mentors and Amazon's dominance in the e-commerce sector, do you think it's still worth it for small businesses to invest in Amazon? Or should they focus on building their own websites and independent online presence to sell their own products?

What are your thoughts on the viability and success of each approach in today's market? Amazon seems so congested with competitors in the FBA field. Is there anyone on UKBF who has actually succeeded on Amazon and is making a full-time living? From my research, it seems that creating a new product is the only way to succeed on Amazon. It’s about making something unique, solving a problem, patenting it, and then selling it online. Otherwise, why sell cables when there are thousands of Chinese sellers saturating the UK platform? (this is what my friend wants to do)

Question: How do these companies manage to stay profitable, especially with Amazon's high fees? FBA seems the only viable option, as ranking is limited if using FBM (Fulfilled by Merchant) since Amazon restricts the Prime badge and ranking. It feels like Amazon has become quite monopolistic, with Europe's online shoppers heavily relying on the platform.

What is the strategy for being successful on Amazon UK? Your opinions.

Thanks All.

Amazon’s fees are relatively reasonable when you consider them as an investment. Many people trust Amazon for its reliability, fast shipping, and product quality. I’d recommend your friend start by selling their own product on Amazon first, as it’s a great way to quickly access a large, established customer base. Amazon’s platform provides a built-in audience, making it easier to gain traction in the beginning. Once the Amazon store is established and stable, transitioning to creating its own online store could be a smart next step. Having an independent website allows for more control over branding, customer relationships, and profit margins. Plus, there are still plenty of customers who don’t shop on Amazon, so having a direct-to-consumer channel could open up new opportunities. Ultimately, a combined approach, starting with Amazon and expanding to your site, offers a good balance of exposure and long-term growth potential.