Is Selling on Amazon Worth It? Selling on Amazon vs. Your Own Site

Key Highlights

• Explore the pros and cons of selling on Amazon vs. your own website to find the best strategy for your online business.
• Understand the real benefits of selling on Amazon, including massive reach, Amazon FBA convenience and built-in customer trust.
• Evaluate costs such as Amazon FBA fees, fulfillment fees and storage fees to calculate your true profit margins.
• Learn how to become a successful Amazon seller by optimizing listings, improving product quality and responding to customer feedback.
• Combine both channels i.e. Amazon marketplace and your own eCommerce website—to build brand visibility and maximize sales.

Amazon is the most visited eCommerce marketplace in the United States, with over 2.2 billion visits in April 2024 alone.

If you want to start selling products online, Amazon is a natural choice. With features like Amazon FBA and benefits for third-party sellers, the platform makes online selling easier — but also highly competitive.

The platform’s massive customer base and advanced fulfillment centers attract millions of Amazon sellers, yet the high competition might make you wonder — is selling on Amazon worth it compared to building your own website?

Both options have their advantages and disadvantages, so making an informed decision is vital for long-term eCommerce success.

Wondering if selling on Amazon is worth it for your business? Then this guide is for you.

Is selling on Amazon worth it?

Is selling on Amazon worth it? The Amazon marketplace is one of the most trusted global selling platforms, preferred by buyers and sellers worldwide. With millions of active shoppers and a strong reputation, it offers numerous opportunities for online sellers to grow their businesses.

The platform’s huge customer base and services like Fulfillment by Amazon (FBA) make it appealing for both new and experienced Amazon sellers. Through Amazon’s fulfillment centers, sellers can store, pack, and ship products efficiently while focusing on sales and marketing.

However, Amazon’s business model might not be ideal for every seller. While it provides convenience and a massive audience, its Amazon fees, competitive environment, and strict policies can limit flexibility. To truly know is selling on Amazon worth it, you’ll need to evaluate both the advantages and disadvantages before starting your Amazon FBA business or building your own website.

Advantages

Selling on Amazon lets you seamlessly move your business online by providing several powerful benefits for every Amazon seller.

It increases your visibility

Amazon has a massive customer base of active shoppers who trust the platform. For small business owners or new FBA sellers, this means instant access to millions of potential customers without investing in significant marketing efforts whatsoever.

More than 61% of U.S. consumers start their product search directly on the Amazon website, compared to Google Shopping or other search engines. The platform’s own search engine displays products based on relevance rather than popularity, which helps new listings reach the right audience.

When active customers visit Amazon, your online store benefits from this built-in visibility. As a result, a retailer automatically gains credibility and the shop automatically benefits from Amazon’s strong brand reputation and customer loyalty.

Amazon FBA handles logistics

Running an online business involves complex inventory management, packaging, and delivery — but with Amazon FBA, sellers can simplify the entire fulfillment process.

By using Amazon’s fulfillment service, FBA sellers can store their products in Amazon’s fulfillment centers, where Amazon manages shipping products, customer returns, and localized customer support. This ensures fast and reliable delivery, improving customer satisfaction and helping you maintain a professional image.

Becoming an Amazon FBA seller also allows you to focus on scaling your business instead of spending time on logistics. Whether you sell daily-use items or niche categories like selling books, the Amazon FBA account setup process is straightforward and beginner-friendly.

It improves your credibility

Positive reviews are essential to building a credible brand. Plus, online shoppers usually read customer messages and reviews before purchasing products on eCommerce platforms.

If you want to establish brand credibility but don’t know how, then Amazon is a great platform to start. With millions of active customers and Amazon Prime members, every item sold on Amazon helps you gain exposure and trust.

The platform also displays all product ratings, helping shoppers seeking quality products easily compare similar listings.

While several perks make selling on Amazon worth it, it also comes with some drawbacks.

Disadvantages

Here are some disadvantages of selling on Amazon you need to consider before making a decision:

Your business won’t be on your terms

If brand development is a significant part of your digital marketing strategy, creating an Amazon store may not be for you.

Even if you own the products you sell on Amazon, the Amazon marketplace has several guidelines and restrictions to maintain its integrity.

For example, sellers can’t contact customers directly and must use Amazon Seller Central’s Buyer-Seller Messaging Service. Similarly, Amazon can withhold funds if they detect fraudulent or illegal activities.

Amazon also takes a cut from each item sold, depending on your selling plan — whether it’s the individual selling plan or the professional plan. This includes Amazon fees, such as referral fees, FBA fees, and subscription fees, which can quickly add up to significant business expenses.

If you want to start selling on Amazon, read its seller policies thoroughly and proceed only if you can follow the regulations.

High return and replacement rates

While returns and replacements are part of online selling, they might not work for all types of businesses. Returns will only add to your losses if you deal in custom or made-on-demand products.

Amazon is customer-centric and offers fast and reliable delivery through Amazon’s fulfillment service, but its return and replacement policy can be challenging for sellers.

Buyers don’t incur any costs when returning products. Instead, Amazon charges sellers the shipping products cost and replacement, even if the return was the customer’s fault.

If your business can’t afford too many returns, then Amazon’s return policy may not work in your favor.

Selling on Amazon incurs high fees

One of the biggest factors in deciding is selling on Amazon worth it is the overall cost. Depending on your selling plan, the platform includes multiple charges such as:

• Referral fees
• Amazon FBA fees
• Storage fees
• Monthly inventory storage fees

These expenses can go up to 50% of your Amazon sales revenue each month and may directly affect your profit margins. For many small business owners, these Amazon fees and business expenses can outweigh the benefits.

While the platform’s policies might be rigid, selling on Amazon can still be valuable for new sellers testing the online shopping space. With the right products and pricing strategy, you can still make good money selling on Amazon.

But even if your goal is to build your own website and run a full-fledged online business, Amazon can help you generate the initial revenue and experience needed to grow successfully.

How to become a profitable Amazon seller

Amazon has over 9.7 million registered sellers, making the marketplace highly competitive. While it’s easy to start selling thanks to Amazon FBA and Amazon’s fulfillment centers, running a truly profitable Amazon FBA business requires the right strategy, pricing, and product selection.

Even with numerous advantages like global reach, Prime shipping, and reliable seller support, new sellers must follow a solid plan to stand out and maintain strong profit margins.

Here are some best practices to become a successful and profitable Amazon seller:

1. Sell high-demand products

Listing all your items might seem tempting, but it can lead to higher storage fees, monthly inventory storage fees, and fulfillment fees under Amazon FBA.

Instead, list only products that are in high demand and sell consistently. This helps you maximize profits while reducing unnecessary costs related to inventory management and the selling process.

You can research top-selling products using Amazon Seller Central or third-party tools like SellerApp. This ensures that every item sold contributes to your revenue goals and supports a sustainable business model.

2. Optimize your product listings

Amazon’s own search engine favors listings that are keyword-optimized and have higher conversion rates. To boost visibility, include relevant keywords and improve your titles, bullet points, and descriptions.

When optimizing your listings, go beyond generic keywords. Include seasonal or contextual terms so your product shows up when shoppers seeking “Christmas gifts” or “holiday essentials” browse online shopping results.

A well-optimized product page not only attracts potential customers but also improves your ranking in Google Shopping and other shopping cart systems integrated with the Amazon website.

3. Use images and be descriptive

Online shoppers rely heavily on visuals. Use clear, high-quality images and detailed product descriptions that highlight your product’s features and quality.

Descriptive listings help you compete with multiple sellers and increase conversion rates. When the selling price is competitive and the listing looks professional, online shoppers are more likely to choose your product over others.

4. Price your products right

Your pricing determines your sales and revenue on Amazon. If your product price is too high, it won’t generate enough sales. But if the price is too low, you won’t make much profit.

To be successful on Amazon, you must strike a balance between profit margins and sales while also ensuring product quality. Usually, Amazon sellers strive to make a profit of one-third of the total product price.

5. Ensure product quality

Amazon handles order fulfillment if you’re listed as an Amazon FBA business. But the product quality depends on you.

A high-quality product gets you better ratings, reviews and recommendations. This helps you stand out, driving more sales and increasing profits.

6. Respond to feedback and questions

You can interact directly with customers on Amazon by responding to feedback and questions.

By being responsive, you can clarify customer doubts and build trust in your brand. Being responsive can also help you build a positive seller image, ultimately driving more sales.

While it’s worth selling on Amazon, you might also want to explore other options, such as creating a website. Read on to decide if selling on your own website is right for your business.

Should you sell on your own website?

Amazon is an excellent platform to start your eCommerce journey, but many entrepreneurs eventually wonder is selling on Amazon worth it, or should they build their own online store?

While selling on Amazon vs own website depends on your long-term goals, an independent website offers more control, flexibility, and opportunities for brand building.

Advantages

Here are the most important benefits of having your own business website:

People will know your brand

When you sell on the Amazon marketplace, your products are displayed among countless others from different sellers. While it’s good to sell on Amazon for exposure, it’s harder to build brand identity there.

With your own website, every visitor interacts directly with your brand helping you grow recognition, loyalty, and trust over time.

You have complete control over your business

Even though it’s worth selling on Amazon for beginners, owning a website gives you total control over your business operations. You can design your store, create unique shopping experiences, and directly engage with customers with something that’s limited on Amazon.

There’s little competition

Amazon has millions of sellers, making it challenging for new sellers to stand out. On your website, however, you compete with no one but yourself. Visitors come specifically to shop from your brand, giving you a higher chance to convert and upsell.

Costs are more flexible

Building your own eCommerce website involves costs like hosting, design, and marketing — but these are flexible and scalable. You can adjust your budget based on your goals and business size.

For example, Bluehost offers reliable shared hosting plans that make it easier for small businesses to launch and manage an online store.

Overall, while there are many benefits of selling on Amazon, selling through your own website gives you more independence and long-term growth potential.

Disadvantages

Here are some disadvantages to consider before selling on your own website:

It involves more risk

Selling through your website requires considerable investment to manage business operations such as inventory, logistics and customer care. This might not be feasible if you run a startup or small business with a limited budget.

The huge amount of investments might be risky for businesses without financial backups.

Marketing is a must

One of the main drawbacks of selling through your own website is the lack of a pre-established customer base. You’ll need to build brand visibility through marketing strategies such as search engine optimization (SEO), social media and pay-per-click (PPC) advertising.

You’ll also compete with large businesses for visibility, so your marketing strategy must be robust and on par with theirs.

But even though it’s worth selling on Amazon, an independent website helps you establish a recognizable brand.

Still, you must build a strategy to ensure your eCommerce website is profitable.

How to maintain a profitable eCommerce website

As of 2023, there are about 24 million eCommerce websites online. However, the success rate of new online businesses is less than 20%.

If you want to run a successful eCommerce business, here are some best practices to follow:

Improve website SEO

If you want more sales, ranking high in search results is crucial. Some SEO fundamentals include using relevant keywords and backlinks on your website. This can ultimately improve your rankings in relevant search results.

Even though there are other forms of marketing, SEO drives organic traffic and works for your long-term success. According to HubSpot, SEO is among the top five marketing trends that generate the highest return on investment (ROI) in 2023.

Here’s a checklist to ensure your eCommerce website is properly optimized for search engines:

Simplify the purchase process

Customers enjoy shopping from websites that offer a simple and hassle-free shopping experience. Steps like account creation might lengthen the process and drive away potential customers.

A quick and simple purchase process can help you generate more sales on your eCommerce website.

Offer incentives for shopping on your website

Incentives work well if you sell on multiple platforms but want more customers to buy directly from your website. While you display products on other eCommerce platforms, you can offer website-exclusive discounts, freebies and coupon codes.

This can help you increase sales on your website while building product awareness through other platforms.

Employ customer retention strategies

You can use several strategies to retain buyers and create a loyal customer base. For example, you can offer a rewards program for customers who shop multiple times from your business.

You can also send exclusive promotional offers to buyers who sign up on your website. Ultimately, your goal should be to encourage customers to shop directly from your website and generate predictable revenue every month.

Optimize the delivery process

While your products are a significant part of your business, the delivery process is equally important. According to ShipStation, almost 78% of consumers said they might not shop from a brand after a poor delivery experience.

To create a good delivery experience, properly package your products to ensure maximum safety under all conditions. Also, offer multiple shipping options and outsource delivery only to trusted partners.

Selling on your own website helps you run an online business on your terms. However, it’s worth selling on Amazon if you’re just starting out and don’t have the resources to run a full-fledged business.

If both options look viable, here’s a quick comparison to help you decide:

How to decide between selling on Amazon and your own website

Choosing the right platform for an online business depends on your goals, requirements and budget. These factors will help you decide if it’s worth selling on Amazon or your own website:

• Business goals: What are your business goals? If you want to sell products and generate revenue, then selling on Amazon is a great choice.

But if you want to build an independent brand, selling on your own website is a better option.

• Profit: Calculate all the costs associated with Amazon vs. your own website. If the total cost for selling through your website is less than selling on Amazon, then it might be better to set up your own eCommerce website.
• Product types: Certain products are better to sell on an independent website than through an online marketplace like Amazon.

For example, customized art pieces can’t be made and stored in large quantities. So it’s better to sell them on your own eCommerce website.

However, mass-produced products might be better suited for Amazon.

Final thoughts

Is selling on Amazon worth it? Absolutely — especially for small business owners who want to reach a global audience quickly. However, before deciding, carefully consider the pros and cons of selling on Amazon vs. your own website to find the best fit for your business goals.

While it’s good to sell on Amazon, factors like Amazon FBA fees, fulfillment fees, and business license requirements can influence your profit margins. On the other hand, running your own website offers more control and brand flexibility.

But you can enjoy the benefits of selling on Amazon and the freedom of your own platform by doing both. Selling on your website and the Amazon marketplace helps you build a consistent income stream while growing brand recognition. Many Amazon sellers use this hybrid approach to balance convenience and profitability..

Bluehost’s WooCommerce hosting plans can help you build an online store while also selling on the best online marketplaces.

Ready to take your business to the next level? Check out WooCommerce hosting by Bluehost.

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