Amazon hits its merchant account customers

The hidden costs of taking shortcuts to eCommerce success

If you have a good idea for an eCommerce business but limited technical expertise, operating on somebody else’s platform seems like a great shortcut to making it happen. Many have followed that route and built up multi million £ businesses.  But now they are finding that the hard work is built on quick sand.

In March 2013 Amazon decided to make a grab for its Merchant customers’ money. With just a couple of months notice they increased their fees from 7% of sales to 12% of sales (for some classes of products). For many of the traders who had set up their businesses on the Amazon platform, it now means that Amazon has just wiped out most of their profits. Just to make matters worse, these traders are hamstrung by Amazon’s terms and conditions that restrict their ability to take independent action elsewhere, such as offering lower prices on cheaper eCommerce platforms…..There is very little that they can do now and nothing to stop Amazon imposing another price hike in the future!

By comparison a Denaploy ecommerce customers with £1m of sales per year will probably pay under 4% pa for maintaining a dedicated site built around the specific customised requirements of their products, and the customer ends up owning the asset that they are building and which is the core of their business. You sacrifice a slower build up for the business but create a more valuable asset in the long run.

I also like this article on Amazon buying out English™  – View