A growing number of brands are deciding they no longer need Amazon.
In 2020, Ikea became the latest brand to cut ties with Amazon when it said it would not to continue a pilot program that began in 2018. The Swedish retailer joined the likes of Nike, Birkenstock and PopSockets, which decided selling on Amazon wasn’t worth the hassle, and opted to pull out instead.
The moves have sparked fears that Amazon will soon see more big brands flee the site. Even if brands end their relationship with Amazon, shoppers can still purchase their products on the site via third-party sellers. And unless companies can develop an e-commerce strategy to compete with Amazon’s customer-obsessed mindset, experts say ditching Amazon has the potential to backfire.
Platforms such as Amazon are traps for small businesses as they:
On any given sale, third-party sellers are charged 25-50% of the list price, an amount that has increased every year. And forget about charging more for the product to make up for this additional expense than you would anywhere else because you will get kicked off the platform altogether.
Amazon is also using the data collected from consumers on its site to identify lucrative and successful products that they will then create a version of under their own brand names. Guess which company’s product will appear first in a browser’s search results?
So, why do small businesses stay on the platform? In short, they have very little choice. Over 90% of Americans shop online and two-thirds of those people start their search on Amazon.com.
In conclusion, if your brand can be successful without using Amazon or any other platforms to reach enough customers, then you shouldn’t use them. Your brand would be far more profitable without a platform. Many large, well-known brands no longer sell on Amazon.