Amazon offers customers a choice of more than 150m different items, but this is only possible because of the variety of products sold by third party sellers on Amazon Marketplace. We caught up with Simon Johnson, director of Seller Services UK, to gain an exclusive insight into how the Marketplace operates, and what it has in store for small business in the future.
Tens of thousands of UK businesses of all shapes and sizes are now selling on Amazon Marketplace and, in 2015, export sales from UK-based sellers were nearly £1.4bn and surpassed 100m units.
“We enable growing ecommerce businesses to be discovered by our millions of customers worldwide and to sell across Europe and around the world,” said Johnson.
In fact, Amazon serves more than 300m global customers, with almost half (49 per cent) of sales coming from Marketplace sellers. “We always endeavour to help sellers grow their businesses on Amazon, and in turn, we provide a greater selection of products to Amazon customers,” he explained.
Entrepreneur Helen Rolfe, who left the rat-race to start her technology accessories business Lente Designs, agreed with Johnson.
“Amazon is the perfect place to sell our products as it is the first port of call for anyone searching for a product online, whether business or consumer,” she said.
Entering the world of ecommerce and exporting your products are huge milestones for a small business, and it can be a huge boon to your profits if handled correctly.
The heavy lifting
Looking to take operations overseas can mean a lot of work. There’s logistics, languages and shipping to consider and pretty soon this becomes a costly enterprise. To help alleviate the strain small businesses are under, Amazon Marketplace introduced Fulfilment by Amazon (FBA), whereby the company stores, picks, packs and delivers items to customers on behalf of third party businesses.
“By using FBA, our sellers are able to scale their business by handing over the heavy lifting of warehousing, payment processing, delivery returns and customer service to Amazon, whilst also utilising our global network to sell their products across the world from a single account,” said Johnson.
Johnson believes that Amazon Marketplace has helped level the playing field when it comes to starting a business, as an individual selling out of their home can now reach the same global audience as well-established retailers by utilising its network of over 100 fulfilment centres. In addition, UK sellers can now sell across Amazon’s 11 websites in seven languages.
“This is the scale of the opportunity of digital commerce for growing businesses today,” he said.
Josh Stevens, founder of the Body Source, credits Amazon Marketplace, and in particular FBA, with his business’ success scaling internationally.
“We are able to use Amazon’s vast network of fulfilment centres to store our products in locations all over the world, allowing for extremely fast delivery to our customers,” he said.
The nitty gritty
Even with the vast opportunities out there and the huge potential global audience, for some startups cost remains a significant factor.
“As small businesses develop, a lack of funding can limit their ability to grow at a rate that matches their ambition and potential,” explained Johnson.
“That’s why we launched Amazon Lending in the UK in July 2015, a service which is designed to help solve this challenge, and we have now been providing short term, working capital loans to micro and small businesses across the UK for over a year.”
Globally, Amazon Lending has provided loans totally over $1.5bn with a total outstanding balance of $400m.
Amazon Marketplace also offers a suite of support services to help sellers become more efficient and grow their businesses in a more targeted way. For example, there is Sponsored Products, a cost-per-click advertising solution for third party sellers who want to give their products more visibility among Amazon customers.
Lente Designs is one of the small businesses that has made use of these features. Rolfe said that the businesses utilises FBA, Selling Coach, feedback and customer messages.
“I was keen to minimise the time and risk associated with investing in a new venture, and selling on Amazon felt like a safe and efficient way of expanding and selling my products to a captive and ever increasing audience,” she said.
Looking to the future
Amazon Marketplace regularly communicates with Amazon sellers to get direct feedback on how it can further support and enable their online growth.
For example, last year it launched Amazon Launchpad in the UK, a programme where it curates innovative new products that Amazon customers are likely to appreciate from popular crowdfunding website, incubators, and startups and offers them the chance to sell to customers around the world.
“It’s no secret that the UK is home to some of the most exciting ecommerce businesses, and Amazon Marketplace provides a great opportunity for businesses of any size, in particular micro, small and medium businesses, to grow online,” he concluded.