I recently started a company, Get Well Games, selling card games with healing topics. The first card game is Back Up!, where the object in the game is to get rid of back pain. Before I ordered the games, I investigated selling it on Amazon. Most people are very comfortable purchasing on Amazon, so it appeared to be a good platform for me.
Fees
Note these are the fees for my product, it may vary for yours
Back Up! is a lower end retail product, priced at $11.99. For any Amazon product, you have to pay either a fee of $1 per product or $40 per month. My monthly target is much higher than $40, so I opted for the monthly fee. In addition, you also pay 15% of the price of the product (varies by product category). It is a little hefty, but well within my profit margin, and seemed worth it to be on the platform.
Next, I investigated using Fulfillment By Amazon (FBA), where you send your product to Amazon's warehouse and they ship for you. Being a one-person business, this model was very appealing. Amazon not only ships, but handles invoicing and returns. However, it is costly for a lower end product. In addition to the fees above, I would also pay $2.42 for various order handling charges. (Also a monthly storage fee, which was minimal for a smaller product.) My margin was shrinking fast!
Instead, if I shipped it myself, I would avoid the $2.42, and I would receive the shipping fee ($4.71 for Back Up!). My costs for shipping (postage, envelopes, labels) run around $3.50, so I would get an additional $1.21. Much better for the bottom line, so I proceeded using this option.
I was very disappointed in the way Amazon handles shipping - it seemed to me that they should make enough with the $4.71 to cover their shipping costs and order handling, and they should not charge me what is an exorbitant fee given the cost of my product. It felt like being penalized for using FBA, when it would be in both of our best interests for me to be there. Perhaps it is just to encourage only higher end retail products where the fee would be a much lower percentage.
Listing
I went ahead with Amazon, still believing it would be the best way to get people comfortable buying from a new company. My next disappointment came when I created my listing. I make the product, so I am the only seller, however when I listed the product it came out looking like there were other options:
Buyers would need to click on that button, see Get Well Games as a vendor, and then add it to their shopping cart. I contacted Amazon to try to change it, a process they call winning the buy box. To win the buy box you have to be a Featured Merchant, and steps to becoming one were very vague. You need to have a certain amount of sales, but they are creating a barrier to people buying it! Still I pressed on. I ran a Twitter campaign to drive traffic to my page, but after 70 hits, I had no sales. I updated the picture and encouraging people who had the game from other sources to write reviews, and planned on ways to drive more traffic.
One very effective method for me would be to add a video showing how to play the game or even of people playing the game. However, Amazon only allows videos for products they sell, another barrier in the way of small business.
Advertising on Amazon
One of the ways I had hoped to use was advertising on Amazon. With a new product, I had hoped to gain exposure and get in front of people who were looking for get well gifts. I set up the campaign, and it seemed to be running, but then noticed that I was getting no impressions. When I looked into it, it turns out that only Featured Merchants can pay to advertise. Yet another barrier! Still I pressed on, trying to improve sales so that I could become a Featured Merchant. With holidays coming up, I have Back Up! being listed in some holiday guides and also getting some press coverage, all with links back to Amazon for purchasing.
The final indignity
Which leads me to today, Nov 14. I received a notification from Amazon that I would not be allowed to sell anything in the Toys and Games category during the holiday season, which they define to start on Nov 19, only 5 days away! I needed to have sold a certain number of items by Oct 31, and at least one by Sept 19. I can understand that they want to ensure quality, but they should informed me when I added my product on October 21 of the blackout period. Now during the busiest time of the year to sell my product, I will not be able to do it on Amazon.
I have moved sales to my own website using PayPal (see www.getwellgames.biz), which will improve my margins, but I will lose any network effect from being on Amazon (sales rankings, etc.). I will also lose the customer reviews. However, I have no choice. I really don't see going back to Amazon - what is the next thing they will do to stand in the way of my business?
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