Small Business Tips
Long considered both a friend and an enemy of small businesses, online retail giant Amazon is now holding out the ultimate olive branch by launching Amazon Storefronts. Storefronts is a new section of its site that highlights individual small and medium-sized businesses that sell on Amazon.
What is Amazon Storefronts?
As well as the products themselves, Amazon Storefronts adds editorial about highlighted companies, plus videos and deals. The store splits products into ‘curated’ categories — there are, for example, collections given over to sectors such as pet supplies and luggage.A TV advert made for the launch highlighted how half of everything sold on Amazon comes from small and medium-sized businesses.
Shearer Candles
A family-run candle company starring in the ad illuminated the importance of the small businesses that sell on Amazon UK.That business is Shearer Candles. The Glasgow-based company, selected from thousands of small businesses participating in the program, appeared in a TV advert.The 120-year-old business had been trading from just the one high-street store until recently. But with the help of Amazon, the firm has come on in leaps and bounds. It now has over 50 employees in four locations.
"As the UK's longest-established creator and purveyor of lifestyle candles, everything we do is usually underpinned by long-standing tradition and heritage.""So selling on Amazon has been a whirlwind romance for us. Each month, we have seen sales growing from strength to strength. It really has become an integral selling tool and source of revenue for our small, family-run business.""Being asked to star in the commercial was a huge opportunity for us, and we were absolutely delighted to be involved.""To see our brand brought to life on such a grand scale truly was a career highlight and a very proud moment for the team. The privilege that is nationwide exposure for our brand will undoubtedly add great value to our business."Stephanie Barnet, Shearer Candles
watch: https://www.youtube.com/watch?v=Ap0uzthIp7I
Growth strategy
Amazon UK Country Manager Doug Gurr said, "Shearer Candles is a great example of how Amazon can play a vital part in growth strategy, allowing SMEs to reach millions of customers – not just in the UK, but globally."If Amazon Storefronts UK gets similar attention to its US version, independent businesses could reap decent benefits. In the US, large-scale TV advertising features a few lucky retailers.
How much is Amazon Storefronts?
There’s no additional cost for small independents to trade through Amazon Storefronts. However, independent retailers selling on Amazon must stump up general costs on all sales. Any retailer selling fewer than 35 items per month must pay 75 pence per item. If they sell 35 or more items a month, a flat-rate subscription of £25 a month plus VAT applies.On top of this, each individual item sold attracts an extra ‘referral fee’. This varies according to the category in which it appears.Amazon Storefronts launched in the US in September 2018. At the time, Amazon vice-president and head of marketplace Nicholas Denissen said, "Amazon first invited businesses to sell on Amazon nearly two decades ago, and today, small and medium-sized businesses are a vital part of Amazon’s large selection and commitment to customers."We’re championing their success with this new store and a national advertising campaign featuring a successful Michigan business [also a candles firm] selling on Amazon to customers across the US and worldwide.”As I write, Storefront of the Week on Amazon UK is London-based Kano, an IT-based business offering kids (and big kids) a simple and fun way to learn to code and make kit-based computers.
PR move by Amazon
Cynics might suggest that Amazon Storefronts is simply a huge PR move by the online giant. After all, Amazon has had to deal with some harsh criticism in recent years for crushing independent retailers underfoot.Exhibit A is the number of boarded-up stores evident on the high street, victims of the e-revolution led by Amazon, with its UK turnover increasing to just under £2bn in 2017 – and tax bill strangely falling by 38% (but that’s another story).Could it be that Storefronts is part of a wider strategy to improve the image of Amazon among consumers who might otherwise shop with local bricks-and-mortar independents?Backing the move is the corporate tagline, ‘a big collection of small’ and the company’s claim that 900,000 jobs were created for small businesses.
Undercutting the High Street?
As well as undercutting bricks-and-mortar businesses on price, often with Amazon’s own-branded products, the $900-billion behemoth also stands accused by its critics of having the power to charge businesses whatever it fancies for the privilege of being listed on the site.Lending credence to the anti-small business argument is research by the Institute for Local Self-Reliance. The non-profit found that most small businesses put the blame on Amazon for declining sales.Many of these businesses also feel compelled to join the e-commerce site. The institute points to census data from the US indicating that 85,000 small businesses went under in the decade up to 2015.
Business impact report
Amazon countered this criticism with its own business impact report, suggesting that the online giant is a boon for small businesses — with nearly one million new jobs and at least $1m in sales created for 20,000 small ventures in 2017.With these statistics behind it, Amazon insists that it offers value to small businesses. It believes that Storefronts will make its reach exponentially more effective, despite only a minority of Amazon users being aware of the new marketplace.
