Although the retail giant known as Amazon continues to raise fees to handle some of their merchandise, sellers have to be extremely strategic in how they choose to use the site. This is not only to help them boost their own business while they continue to own the company, but to put them in a great position to sell an Amazon business when they choose to do so.
If you’re thinking about making an investment and buying an Amazon business, there’s good news for you in the future: there’s the potential to make solid profits and then sell the business entirely should you choose not to continue in the future.
Why Small Businesses Choose Amazon for Traction and Profits
Small firms can gain leverage on Amazon, but only with a strategic and tactical approach. In online retail, Amazon garners more than 40% of all U.S. e-commerce sales. So, for many companies, it simply makes sense to have a presence there because of a broad reach.
However, there is a price for using this platform to boost sales. Sellers must be knowledgeable about some of the key changes for 2018 including; increases in seller fees for particular categories and being extremely strategic about what is sold on the platform.
What Happens When Rates Keep Getting Hiked?
As Amazon feels entitled to raise rates while they grow their third-party business, this could mean that Amazon may raise every other product category rate going forward. Amazon might also be choosing to pass on the high cost of selling apparel online directly to consumers since items like apparel have higher return rates from customers.
This is true for the categories that are currently impacted by higher rates such as shoes, accessories, sun glasses and handbags. Since these are discretionary purchases, consumers are more likely to return them.
Choosing to sell only these items in your Amazon business could make it difficult when it comes to sell.
When selling an Amazon business, people will want to look at all of the various aspects of your company including the types of products you have chosen to sell on a third-party marketplace, return rates, revenues and profits. Seller referral fees paid to Amazon for accessories and clothing are jumping from 15% to 17% of the sale this April.
This means that someone who is only selling jewelry and similar items should carefully consider whether this is in their long-term vision for selling an Amazon business.
Even if your current categories are not saturated, you might want to continue checking in to see if there are chances to sell your Amazon business and turn the proceeds into a new business venture.
Things to Keep in Mind Before Selling an Amazon Business
Selling an Amazon business means constantly being adaptable and being able to adjust your plans based on what the market information is telling you. Being knowledgeable about these tools and consulting with an experienced online business broker will empower you to have a better perspective over the long run and to continue to grow your numbers towards a profitable sale in the future.