Does my Business need a Direct-to-Conusmer E-Commerce Store or Should We Rely on Amazon?

Amazon

Question: If 99 percent of my sales are coming from Amazon, do I need to keep my Shopify Store?

Blake: The answer is yes, you need to own your own store so that you can build your brand around it, you own your customers, you own your channels of communication, otherwise you are a blue link underneath a product on Amazon and that’s not a business, that’s like we said again it’s an arbitrage opportunity there.

John:  it’s great until Amazon knocks you off or someone else comes in with the same or similar product that’s three cents cheaper or whatever it is. Amazon is a great channel, what I would do is figure out how to get as many people as possible off of that channel, same with Facebook and Google, I mean if you’re beholden to them, it’s really challenging to build something that is under your control, so figure out what it is if it’s branding inside the box but you have to be careful with that you can’t say ‘Hey Amazon sucks, buy from me next time!’ but you can subtly say that, maybe your store’s URL is on…inside the packaging the goes out and, you know, it’s like a Trojan horse that you’re sending out with everything, but, you know, it’s important as well because though I transact a lot on Amazon, most of the things I buy are on there, I’m not different than anyone else, I’ll try other stores, don’t get me wrong but if I see a brand on there, I’m going off of Amazon,  googling that and kind of doing my background research, so a store or a brand, all things equal,  let’s say someone does rip you off and you’ve got five very similar things, well I’m not afraid to spend three, three or four dollars more on something that has their own presence, I can tell these are real humans, right? 

John Max: And I think that you know, when you’re dealing with them and it’s just like with any other business, and it’s something we talked about with the Facebook algorithm change, you don’t want to…you don’t want to build your business on a channel that you don’t own. You know, I have a friend that got an e-mail, I think either the day before Christmas or two days before Christmas and his Amazon account had been shut down and he lost out on sales, this guy does a couple million dollars a year on Amazon and it’s just like everything else, treat Amazon for what it is, it’s a traffic channel, if you’re just starting out, there’s no better place marketplace to be on than Amazon, but figure out how to move the traffic away from it, I mean Google’s largest customer, when it was growing its AdWorks platform, was Amazon, they compete with each other, so use it as a traffic source, get what you need out of it but own your own egg.

Written by
John James, M.D. is the CEO of Engine, a modern cloud-hosted ecommerce platform. I paid for medical school with an ecommerce business I founded in my dorm room over twenty years ago, and eventually raised over $100 million in venture capital running Acumen Brands. Email me -- john at enginecommerce dot com.