In the long-term (5 to 10 years), there is no alternative for retailers, for an e-commerce store as soon most of the retail will be online. That is not to say the actual shop will not be important, it will be. The fact is now that in Australia, although we have a small market, we are one of the largest e-commerce markets in the world.
So in the short-term, many of my clients have to think and as Amazon is now here and the world did not come to an end but retail is now changed, and it is an appropriate time for my clients and readers to consider the long-term on e-commerce in their store.
There will be three major channels open to them online eBay, Amazon and their own online website. I will go over them in turn. In reality, currently Amazon is not an option for most people as its only by invite but this I am sure will change.
A typical scenario might be here. You are a retailer. You have a stock you want to get rid of because it does not sell in your shop, what do you do? You could discount it heavily as some people, I think wrongly suggest, or you could try to unload it by going online. Another scenario might be that you do sell products that work well online like pet food, and you want a part of that online pet food market too.
eBay is an excellent choice, well established in Australia it is relatively easy to set up. You can start selling with very little money upfront. Start with one listing, it will be running in a few minutes and build yourself up. It has a massive number of buyers already coming. Several problems with eBay it takes a while to build up a reputation and the fees are high about 15% if you include PayPal.
Amazon is the new boy in town. It has a large number of established customers in Australia, but they are only getting going locally now. The odds are you will not get in at present anyway. The fees are roughly equivalent to eBay plus it has a monthly fee from what I can see. It also requires a higher initial investment in stock. Amazon does have one big plus; it has a brilliant delivery service that you can use. Deliver to the warehouse and they will do the rest for you.
Still, Amazon has the same problem as eBay, as you are not building up your business, you are building up their business. They are both not dealers but product based, so it is tough to build up a business there. If I look for a product on eBay from you, next time the way, they are set up, I am hardly likely to come back to you. Furthermore, what you will find with both have many rules you have to follow to stay there. If you violate them, you can be out instantly. If your customers start leaving bad feedback, you can get into big trouble too. They are both very competitive marketplaces as they are full of bargain hunters. Additionally, it is hard to justify advertising your Amazon or eBay store as you are given little scope to advance.
The only way to overcome this is your own e-commerce website, which is what most online sellers have. An e-commerce website is initially dearer but comes with a significant cost saving once it gets going, you are about 10% to 15% less in price as there are no fees. It is less competitive. When I am on eBay, I am getting hit all the time by people making offers on the same product that you are trying to sell me, and the proposals are overwhelmingly on price. Service, product knowledge, and quality rarely if at all has much bearing there.
Final note: If you are entirely new to online e-commerce, you need to walk before run. I suggest that you try making a few purchases online, next put a few items on eBay for sale and see how it goes. Subsequently seriously look at making your own site.
PS We are currently making a major change to our point of sale and e-commerce system to enable it to handle an Australian Amazon link.
