Ethan
What it's like selling on Amazon!
A ton of people ask me about selling on Amazon. How does it compare to selling there versus through the website? When I order something does it come from you or an Amazon warehouse? What kind of fees do they take?
Truth be told, I was a little resistant to Amazon when we first started but have definitely come around. In some ways, I think our products might even be a better fit there than for traditional DTC.
As a consumer, I know I always roll my eyes when I endure the lengthy checkout process for a new brand and love the one-click nature of Amazon. As a seller, I can appreciate that people are there to shop; by appearing under the relevant search terms you are essentially offering them something they're actually looking for instead of bothering them while they're on the web doing something else. PLUS, I know how much better our products are than some of the other results for things like "energy shot," "immunity," etc.
As far as the business side: Yes, Amazon takes a hefty fee. Depending on the brand and price point, they typically take around a third of your selling price (including shipping to the customer). If it sounds like a lot, it is. But that's what you get for driving traffic, I guess. Truthfully, if you factor in the high acquisition costs on Google Ads and Facebook, as well as shipping, we typically net out about even.
Operationally, it's actually a bit easier for us. We just send pallets of product into the Amazon warehouses and it's out of our hands from there. Working in bulk is always easier than on an individual basis for each order coming in through our website.
Above all else, the thing that really got us to start investing in Amazon as a pillar of our business was our repeat purchase rate. You obviously don't get as much data (demographic, etc) from them as we would get through Ethans.com, but the little nuggets we do get are gold. A few months back, Amazon reached out to us to let us know that we have a repeat rate of over 10% higher than "like" brands. As I alluded to, we know our stuff is better than the rest, but seeing the story told through numbers like that (as well as reviews) was good validation.
Every month is different, but usually we see about a 5-10% increase each month. As you convert and garner positive reviews, Amazon organically elevates your listings. Combined with spending a bit more, it creates decent momentum for products that are succeeding in the marketplace. As of right now it's about a million dollar annual business for us, but we're seeing that rate increase each month.
