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| Small Business Owners Leaving Amazon |
Aaron Kearson left Amazon in 2015, after working in the company's business development department, after which he began using his expertise in selling algorithms to create his own company with his wife, Pacific Northwest Components.
Kerson specializes in selling handlebars, control arms, and general bicycle parts. Especially mountain bikes. Before the Covid-19 pandemic, which affected almost all industries, his business had an acceptable success.
According to Kirson, Amazon has caused a lot of problems in this area. There are also many other industries. This is mainly due to companies like Nike, IKEA, and Brickenstock pulling their products from the platform, and of course his company.
Amazon and the bike market
Kearson has decided to remove all of her company's PNW products from Amazon's e-commerce platform. He wants to start distributing these products to local bike stores.
He knew that removing his product from the platform would cause sales to drop by 30%. This is the platform sales. Instead, his work makes use of more than one means, including direct supervision of customer service, returns, and more.
With the emergence of the Covid-19 virus, almost all industries are affected. Including bicycles, most bicycle component manufacturers are generally located in Asia. It takes about 45 days for PNW goods from Taiwan to arrive, now it takes about 200 days.
Overall, the PNW platform posed significant customer service challenges. Since the procurement of high-quality parts and components is a difficult process and requires some experience, the company's employees do not have enough experience to meet customer requirements.
The company is also facing the problem of incorrect return. Amazon gave him a return box with defective products and Kearson joined the seller's Prime program. It requires sellers to ship the goods within one day with a 99% success rate.
Over time, due to all these problems, PNW and dozens of other companies began to withdraw. It also didn't work with other bike parts sellers. Perhaps the only reason they stayed there was to increase sales.
The negative impact
These companies have lost a lot of money working with Amazon, especially on cheap products that cost a few dollars. It also encourages customers to buy directly from the store next time instead of ordering from Amazon.
Not only people working in the bicycle industry were affected, but also examples of people working in different fields.
An example is Sarah Ford, who owns a luxury shoe brand. After three years of sales on the platform, Ford pulled out entirely from Amazon in 2019.
In fact, selling on Amazon is costly for them, from losing the final income to marketing expenses to paying for advertising on the platform to reach more users.
The Amazon platform guarantees Ford up to 50% of its sales. As she said, it took a full two years after coming off the podium to make up the difference. She also said she has no regrets.
During the pandemic, many small business owners suffered losses from the platform, but saw massive sales growth of $386 billion. There is no doubt that this situation will continue as most sellers have no alternative.