fbpx

7 Common Objections to Selling on Amazon, Debunked

Amazon has become the de facto online shopping destination for millions of consumers, yet many brands remain hesitant to tap into this powerful sales channel. Common objections to selling on Amazon range from concerns over margins to customer data ownership, an uneasiness over Amazon potentially knocking off products, and more. After guiding hundreds of leading […]
Published on February 27, 2024   |4 minute read

Amazon has become the de facto online shopping destination for millions of consumers, yet many brands remain hesitant to tap into this powerful sales channel. Common objections to selling on Amazon range from concerns over margins to customer data ownership, an uneasiness over Amazon potentially knocking off products, and more.

After guiding hundreds of leading brands onto Amazon, our team at Envision Horizons has seen and overcome these hurdles time and again. We’re debunking the 7 most frequent objections and illustrating why Amazon should be a core part of your e-commerce strategy…

1. Cannibalization of Direct Sales

One of the biggest worries is that selling on Amazon may cannibalize a brand’s meticulously built direct-to-consumer business. However, our analytics demonstrate that Amazon typically drives around 80% incremental revenue for most brands. As Amazon Prime membership booms and new offerings like Buy with Prime evolve, the sales opportunities far outweigh any risk of self-competition.

Retail Ecom Sales by Company

Omnichannel reigns supreme- being available wherever and however customers prefer to shop is key

2. Customer Experience/Data Ownership

Brands fear relinquishing control over the customer journey and losing access to first-party data. While valid concerns, Amazon now provides more transparency through tools like Brand Analytics and Manage Your Customer Engagement (MYCE) to directly engage shoppers post-purchase. For brands ready to deepen engagement, enhanced content and Amazon Marketing Cloud (AMC) offer customer analytics rivaling standalone DTC.

Additionally, Amazon’s introduction of SIOC (Ship in Own Container) allows for reduced shipping costs and provides brands with more control over the “unboxing” experience.

3. Lack of Control over Buy Box and Preference for Wholesalers

A common frustration is the prevalence of third-party wholesale listings taking over product listings and the critical Buy Box placement. However, brands have the power to clean up distribution over time and ensure authentic products are displayed accurately across their entire Amazon presence.

Brands benefit by controlling the content on their product detail pages, and storefronts, and ensuring authentic products are being sold. While distribution clean-up can take time and money, it is better than having your brand misrepresented on the largest e-commerce platform.

4. Luxury Brands Question Selling on Amazon

High-end brands often dismiss Amazon due to assumptions that the platform is only worthwhile for high-volume, low-cost merchandise. In reality, Prime members represent an influential consumer base with ample spending power.

Over 6% of Amazon Prime members spend $500+ per month. Listing premium items taps into this loyal, big-spending audience.

5. Amazon Margins vs. Wholesale/DTC

It’s true that Amazon’s referral selling fees generally provide lower margins than direct sales. However, profitability still surpasses traditional wholesale, thanks to Amazon’s enormous built-in demand. When accounting for the lower CAC (customer acquisition cost), most brands see higher net margins through Amazon’s expanded reach and conversions.

Our analytics technology, myHorizons, tracks key metrics like CAC and true margin impact to demonstrate Amazon’s incremental profit contribution.

6. Copycat Fears Caused by Selling on Amazon

Earlier concerns over Amazon leveraging sales data to launch competing private label knock-offs have eased under new leadership. Truthfully, Amazon can view market gaps with or without a brand’s presence on the Marketplace.

Maintaining distribution exclusivity is improbable in today’s transparency. Channels like Amazon provide an opportunity to cement your brand positioning in front of the world’s largest audience.

7. Insufficient Internal Resources to Support Selling on Amazon

We often hear “we’d sell on Amazon, but just don’t have the bandwidth in-house.” And that sentiment highlights the final — but most easily overcome — barrier to Amazon success.

Rather than stretching internal teams thin, smart brands elect to launch through an experienced Amazon-native agency. With the right partner securing inventory and navigating optimizations, selling on Amazon can not only be manageable, but highly profitable.

Check out our recent eBook The Guide to Staffing for The Amazon Channel for expert advice on how to staff your internal team, how to hire the right agency for you, or how to implement a hybrid model.

If you remain unconvinced about the Amazon opportunity, we welcome the chance to chat and address any lingering concerns. Apply for a free growth plan from our team to get the conversation started!

80+ Amazon Reports in One Platform

No more manual work. No more guesswork. All 80+ Amazon reports are parsed in an easy-to-understand, visually-rich report.

Start your 30-day, full-access and no-obligation trial today!

Follow Us

LATEST FROM ENVISION HORIZONS

Navigating Amazon FBA Fees in 2024

Navigating Amazon FBA Fees in 2024

As an Amazon seller, staying up-to-date with Amazon’s ever-changing fee structure is important for maintaining profitability and competitiveness. In 2024, Amazon introduced several updates to its Fulfillment by Amazon (FBA) fees and policies, aimed at boosting...

read more
Amazon’s Creator Connections: Hit or Miss?

Amazon’s Creator Connections: Hit or Miss?

Influencer marketing has emerged as a powerful strategy for brands to expand their reach and drive sales. Amazon, recognizing this trend, launched its Creator Connections program, enabling brands to collaborate with influential voices on the platform. Creator...

read more

Get your Amazon news from industry experts

At Envision Horizons, we believe big picture thinking is the key to driving growth on Amazon. 

Share This