Reports in The Motley Fool on Monday (April 2) found Amazon — despite being blamed for lower mall traffic, business downturn at mega-retailers like Toys R Us and heightened competition against small businesses — may actually be more beneficial than harmful for SMBs.
More than two-thirds of small businesses surveyed by Insureon and Manta said Amazon has positively impacted their sales. Still, that means nearly a third agree Amazon has harmed their sales volumes.
Nearly a quarter of SMBs that sell products online said they use Amazon — more than any other third-party eCommerce portal, including eBay (22 percent). Two-thirds said they use their own websites.
Most SMBs surveyed that sell online said this has led to at least a moderate increase in revenue, and 43 percent said the decision to do so led to “significant revenue growth.” Nearly 20 percent still said their revenues haven’t seen any effect from launching online sales.
Amazon’s largest competitive threat against SMBs is its ability to offer lower prices and reach a broader audience, reports said, though this enables small retailers to gain a competitive advantage on other fronts, like customer service.
Separate data released late last year also highlighted the role of small businesses in supporting Amazon.
According to Amazon figures, as reported by CNBC, 2 billion items were sold on the eCommerce platform in 2016 by small businesses using Fulfillment by Amazon, a B2B logistics service that supports small firms’ access to packaging, shipping and customer service. That means more than half of products sold via Amazon come from small businesses.
“People trust it — they know Amazon is going to take care of them, and so they use Prime all the time now,” said one small business owner, Steve Grubbs, owner of greeting card and signage business VictoryStore.com, in an interview with CNBC at the time. “There are so many challenges with online retail, and we’ve battled them for 20 years. Amazon takes a lot of those away — credit card security, marketing and sales, shipping and fulfillment.”