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Small Businesses and Amazon: Friend or Foe?

Updated: Jan 4

Products made by small, family-owned, locally-owned businesses should NOT be purchased on Amazon. Please buy them directly from the website (or storefront) of the small business. Here's why.


Consumers love Amazon, right? Huge selection, convenient and easy-to-use app, free and quick shipping delivering all of your favorite must-haves directly to your door step in as little as a couple of hours - what's not to love? Amazon provides a really good experience for consumers and I suspect it's great for you too!


However, the story from the small-business owner's perspective couldn't be more different! I know from personal experience by being a seller on Amazon for nearly 2.5 years that Amazon is absolutely bad for small business sellers. I have a few friends who also own small businesses and have previously sold on Amazon or currently sell on the smiley-logoed, ubiquitous platform.


What I hope to explain with this blog post is that when you choose to support a small business by buying their cool products, PLEASE resist the urge to buy that product from Amazon. Instead, buy that product directly from the webpage of the small business. Doing so will help that small business MUCH, MUCH more so than if you make your purchase on Amazon.


One of my friends stopped selling on Amazon over a year ago because of how much effort was required to deal with the company that has shown time and time again that they truly don't care about small, family-owned businesses.


Another friend who sells a product, that he invented and patented, on Amazon, but, just like me, he has had countless struggles with how Amazon handles Seller-side customer service.


If you want just a taste of how bad Amazon Seller Support is, just google this phrase: "Amazon seller support is bad" and you'll find countless links supporting my argument. What makes this all so frustrating, at least from my perspective, is that Amazon has proven time and time again that they KNOW how to provide GOOD customer service...they do it everyday for millions and millions of buyers all around the world. This huge company knows how to make a customer happy (it's literally in their logo) so how they can be SO BAD at providing support for sellers is beyond my ability to comprehend. My theory is that that bad service for sellers is intentional.


Here are a few bullet points to help me explain my perspective.

  • No phone number for Seller Support.

  • No email address for Seller Support.

  • Nearly all online Seller Support seems to be a (bad) AI-based software system that doesn't actually provide any useful help.

  • Advertising: It's virtually impossible to get a product in front of customers eyes without spending LOTS of money on Amazon Ads.

  • Vague and capricious product listing rules and requirements that are difficult to follow and nearly impossible to consistently understand.

  • The seller owner doesn't 'own the customer' with Amazon.

  • Fees.


No Phone Number/Email address to Seller Support: This is no exaggeration. There literally is not a single phone number or email address that a seller can use to contact Amazon Seller Support in the event that a seller needs help. When I first discovered this, it truly blew my mind. Can you imagine any other business that does not have a phone number or email address for their customers (the "customer" being the small-business seller, in this case) to reach out for help? There is a phone number and several different email addresses (depending on the problem) for BUYERS to call Amazon, but not a single one for SELLERS. Nadda...Zilch...Nothing!


Nearly All online Seller Support Seems to be a (bad) AI-based computer: There are only two methods (both are worse than bad!) for a seller to get any kind of support from Amazon: 1) The online Seller Support (Caselog) Messaging System, 2) The seller can enter their phone number into a webform and request that Amazon call them back. Both of these methods are severely ineffective for different reasons.


As for the Caselog System, a seller can submit a ticket describing the issue they are having. The expectation is that an Amazon staff member will get your message and do their best to work through the issue and suggest a solution. The reality is that nearly all of the replies that come back from this system seem to be a bad and severely unhelpful AI-based computer system. Earlier this year I had a problem with one of the Texas Challenge Coins listings on Amazon. The listing was disabled for some unknown reason. I sent a message through the caselog system and within a few hours, I received a message that told me that my product violated Amazon Rules. (Keep in mind, I had already been selling this product for many months prior). I replied back asking what specific aspect of the listing violated a rule. The reply I got back was something very similar to: "Thank you for submitting your query. I understand that you are asking why ASIN: xxxx has been delisted. We have determined that your listing violates our product guidelines". So I replied again and I asked my same question: "what specific detail about my listing violated which rule". I got the exact same word-for-word reply. I asked again with slightly different verbiage. Soon I received the exact same message. Without even an ounce of exaggeration, this went on for 3 weeks and well over 150 messages back-and-forth through the Amazon Seller Support Caselog System. I capitulated. This was worse than banging my head against the wall. I then removed my supposedly policy-violating listing, deleted it and then went on to make a brand new listing (with the exact same information, description, pictures and part numbers as my previous one) and it was accepted and sales of that item continued. I have no clue what part of my previous listing triggered their software to delist it. I'm sure I will never know. This is the exact experience that I have come to expect from the online Seller Support Caselog System. It's very consistently bad...every time...without fail. It is quite a miserable system that provides no useful help.



A few months later I had a different issue with one of my listings and received the exact same type of non-solution through the case log system. After a week of dozens of back-and-forth unhelpful replies, I decided I would enter my phone number into the "please call me back" webform. Surprisingly, my phone rang within about 5 seconds (it truly was that quick!). Soon I was talking to a nice person with a strong Pilipino accent. I explained my problem. After a few minutes of this staff member typing and tapping on his keyboard, he finally confessed: "This is a problem that I'm not able to help you with, but our (fill in the blank) Department can help you. Let me transfer you." And so it goes, the first time on the phone with this system I was transferred to four different departments with four different accents and four different reasons why their department couldn't help me. After 75 minutes on the phone, I hung up because of other schedule obligations on my end. I tried solving this problem many more times through their phone system during the following month. After the second frustrating phone-call-hoop-jumping experience I started recording how many hours I had spent on the phone with this single problem. Once the total eclipsed 15 hours over a period of 1 month, I capitulated once more! All of the people I spoke to on the phone were nice and really trying to be helpful, but they just didn't have the tools and account-access to be helpful. At this point I was quite frustrated and I didn't quite know what else to try...but then.....epiphany! I remembered that a few years earlier I watched Jeff Bezos in an interview on TV. During the interview, he said that ever since he founded the company he has always left his email address (Jeff@amazon.com) open to the public so that a customer can reach out to him. It allows him to keep a pulse on the customer. Soon, I was writing a personal email to one of the richest people on the planet. This email contained a brief summary of my problem and my caselog number. Within an hour, I received the following message (directly copied/pasted from the email, except the redacted name): "My name is (redacted), and I’m a member of the Amazon.com Executive Brand Relations Team. Jeff Bezos received your email and requested that I research this issue and respond on his behalf." WOW! a real person! I explained to (redacted) more details about my problem. THE PROBLEM WAS FIXED WITHIN 12 HOURS! Amazing! In spite of my spending countless hours on the phone and dozens upon dozens of messages in the caselog system during the last month, my problem wasn't impossible or even difficult, it's just that the Amazon Seller Support is hideously unhelpful! It's rather remarkable that emailing a billionaire is the most direct method to solve a customer service issue with a listing problem on Amazon.


Advertising: It's not always obvious to the average Amazon buyer just how much revenue Amazon gets from sellers who buy ads for their products on the Amazon website/app. The next time you search for a product on Amazon, look closely and you'll see some of the search results have a small "SPONSORED" marker above the listing. It's virtually impossible to get your products noticed on Amazon unless you also buy ads on Amazon. There's a bit of 'the fox guarding the henhouse' kind of thing going on with this arrangement, don't you think? As an example, Puzzometry is a word that I have trademarked. I own that word. There can not be any other product sold with the name "Puzzometry". But if you search Amazon for "Puzzometry", it is rare that my listings are the top results. There are usually many other Sponsored listings before you see my puzzles. Yes, I do pay for ads on Amazon, but apparently, I don't pay enough to allow a user who searches for my EXACT product name to easily find my products. Unless the seller applies a huge advertising budget, it is very difficult for a small business to get noticed on Amazon.


Vague and Capricious Product Listing Rules: There are countless examples of this problem. Here's one: The Texas Challenge Coins that I sell are, of course, not legal tender. They are not currency. They are Challenge Coins...aka: Souvenir Coins..trinkets. There are hundreds and hundreds of different designs for Challenge Coins all over Amazon. These products are very popular with veterans (mostly), law enforcement and motorcycle clubs and many other groups, including proud Texans! However, there is not a product category on Amazon specifically for Challenge/Souvenir Coins. There are a few categories for collectible coins and other currency categories. Many challenge coins that are currently on Amazon are listed under those categories. I figured that I should list my coins in some of those same categories. One of my listings was initially accepted for such a category and then randomly disallowed a few weeks later. My products are not 'legal currency' so they can't be listed in that category, Mr Amazon Help System tells me. "There are tons of Challenge coins listed in the same category", I replied. I think we all know how that response landed, right? After way-too-many-back-and-forth messages and a few phone calls, the friendly voice on the phone suggested that "toys" was the category for these non-currency coins. "Toys?", I said. I was exhausted by this point. So even though many other Challenge Coins are being sold in other categories that are a better match, some of my coins are listed in the "Toys" category! I suggested that they introduce a category specifically for Challenge Coins/Souvenir Coins. I was promised that my suggestion was forwarded on to the appropriate department. Uggh!


The Seller Doesn't 'Own The Customer' on Amazon: This point is a much harder sell to make what with spam and identity theft and such that is prevalent in todays high tech world, but hear me out with this if you can. Can you imagine a doctor not having access to his "rolodex" of patients? Can you imagine a banker not knowing the mailing address or phone number of the customer? What if there's a problem with your account? Sorry, but the banker will have no way to reach out to you to let you know about it. So it goes with Amazon. The sellers on Amazon are not allowed to "own the customer". "Owning the customer" is the phrase used in business to describe the concept of being able to keep in touch with people who patronize your business. It's a very important part of building a business with recurring sales from loyal customers.


There are two ways in which a product that you buy on Amazon ends up on your doorstep: Fulfillment by Amazon (FBA) and Seller Fulfillment (SF). Most items on Amazon are shipped directly to the customer from an Amazon Warehouse. This is called Fulfillment By Amazon (FBA). My puzzles are shipped directly by me here at Puzzometry HQ. The puzzles are never inside of an Amazon Warehouse; they go from my storage shelf, into my hands, into a package and then directly to the USPS until it shows up on your doorstep. This process is called Seller Fulfillment.


In the case of FBA, the seller never sees any contact information except a first name and a zip code. In the case of Seller Fulfillment, the sellers get the customers name, mailing address, but no email address or phone number. (Again, I can definitely understand the reasons for this policy: spam, identity theft, etc). The result of this that it is very difficult (aka: impossible) to build a customer base and to build a brand when there is no way to directly reach out to the customer to ask: Did you have any problems with the product? Is there anything I can do to make your experience better? Do I need to send a replacement? Would you like a promocode for our holiday sales? (click here to get Puzzometry promo codes!) Can I send you a newsletter letting you know about our new products? With Amazon, there is no way for the small business to keep in touch with the customer in order to assure great customer service. Puzzle and Coin fans who purchase from www.Puzzometry.com will always get an email DIRECTLY from me thanking them for their purchase. Never fail! I always do that! This helps the customer associate a person (me!) with my small business and it helps me to keep a pulse on my customers. This personal interaction is impossible when the purchases come through Amazon.


It's extremely challenging/impossible for a company to build a brand image and a reputation when Amazon, not the small business, owns the customer. Even large companies like Nike and Birkenstock have taken note of this aspect of Amazon and have pulled their listings from the site.


Fees: As you might imagine, profit margins for most small businesses are very slim and sometimes even negative! Even small fees can add up to make a huge difference in profit margins for small businesses. Fees on Amazon are multi-layered. Generally, the seller fees are 8-15% (which, to be honest, isn't really all that high.) However, thats not the end of it. There are a few different options for Selling Plans (basically the fee you pay to have the opportunity have a Sellers Account). The Seller Fee can be either $0.99 for every single item sold, or about $40 per month no matter how many items are sold. If a small business sells a couple of dozen (a large business might sell hundreds or thousands) items per month, those fees starts to really dig into profit. Also, if the seller is using FBA, they also have to literally rent shelf space at the Amazon Warehouse. The rent amount is based on the size of the item being stored, the quantity being store and how long these items sit in the warehouse (rent for large items that sell slowly is more expensive than small items that sell quickly). Additionally, there are the above-mentioned advertising costs and shipping costs. All of this is to say that it's not unusual for a small-business seller to be paying Amazon 30-50% or more of the purchase price of an item. In this example, if you buy something from Amazon for $20, the seller might only be getting $10-14 in their account. Maybe the item costs $8-9 to manufacture and you can see that there isn't much left for the small business. If the buyer were to make the purchase directly through the small-biz webpage, then all of these fees (except shipping) would be eliminated. This would likely allow the small business to lower the price for the consumer while simultaneously making more profit! The consumer wins and the small business wins in that example.


Another issue related to fees and money is the amount of time it takes to get payment from Amazon for items that were sold. Simply put, it can, and often does, take weeks to get sales revenue from Amazon deposited into your bank account. Amazon uses an arcane system of "Reserve Funds" to ensure that the seller doesn't get paid in a timely manner for sales that occur. To be clear, I'm not suggesting that Amazon doesn't pay sellers the correct amount, but I am saying that the system to do so is nearly as difficult to understand as Puzzometry Puzzles are to solve!


Yes, Amazon is one of the largest marketplaces in the world. A small business listing their products on Amazon gives a ton of exposure that they might not otherwise get on their own, BUT, it is not without much hassle, frustration, costs and customer service issues.


I suspect that Amazon Seller Support customer service is much better for large corporations...its GOT to be, right?...but as for us small, locally-owned, family-owned businesses we are left with only an empty shell of a customer service department.


PLEASE CONSIDER MAKING PURCHASES DIRECTLY FROM THE SMALL BUSINESS IF GIVEN THE CHANCE.


Support Local, Buy Local


Thank you!

Jim

Owner, Puzzometry, LLC

Puzzometry @ gmail.com



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