I'm an Amazon seller and I experienced how Amazon's hidden fees and crushing requirements choke out small businesses
As a small business owner, I realized if I wanted to reach more customers, I had to do business with Amazon.
But I found my products were getting lost in the mysterious Amazon algorithm.
In order to sell more, I had to pay more in fees causing profits to prove elusive.
Rabbi Yael Buechler is the founder of Midrash Manicures.
This is an opinion column. The thoughts expressed are those of the author.
As a child I could sit for hours cranking out bows with my grandfather, known to us as "Pop." After affixing a spool of ribbon to an aqua-colored machine, I'd turn a lever to activate the bow-making arm. In and out, in and out it would swing until a bow magically took shape. Then, with one click, the fully-formed ornament would be released.
I never had the chance to visit Pop's pharmacy, the original home of this machine (gift-wrapping was complimentary with any gift purchase). From what I've heard, it was a true "Mom and Pop" pharmacy, where Pop seemed to know every customer. Then the pharmacy chains arrived. Pop's store survived alongside them for a time, but in the early '80s, he closed up shop for good.
I didn't quite understand what Pop was up against until I started to sell merchandise through Amazon. The company's labor issues have been much in the news of late. Amazon workers are paying the price for the impeccable Prime delivery service many of us enjoy. Based on my experience, sellers on the site, particularly small businesses, get short-changed too.
Algorithms and hidden fees
Almost a decade ago, I started my own small business selling Jewish fashion accessories, from Hanukkah scrunchies to High Holiday nail decals. I began the traditional way, selling products directly to consumers through my website.
As I watched Amazon grow, I realized that if I wanted to reach more customers, I needed to do business with Amazon. I myself depended on Amazon for all sorts of items, from baby diapers to K-cups. (Sorry, Pop!)
Setting up an Amazon seller account was pretty straightforward. But once my products were listed, I began to notice something curious about the search function. My accessories were literally one-of-a-kind (no one else was offering Ten Plagues nail decals!), but I couldn't find them when I searched as a customer. I would scroll through pages and pages of results before I finally landed on my creations - if I found them at all.
I knew these items were "live" and in-stock, but somehow, they were overshadowed by many other products on the platform. As a rabbi, I was well-versed in Jewish law but not in "Hilchot Amazon", or "the laws of Amazon" as I came to call them.
I learned there was a mysterious Amazon algorithm I would need to grasp in order to boost the visibility of my merchandise (and hopefully make some sales). For my products to show up on one of the initial search pages, I needed to amass enough customer reviews or purchase sponsored ads. I had no idea how to collect more reviews unless more people bought my products, so I went with the ads.
In order to purchase them, I was required to upgrade to an Amazon Professional Selling account, which added a monthly fee of $39.99 - though it did eliminate one of the per-transaction charges. The daily ads I bought helped boost my products' visibility on Amazon, but the charges were adding up.
Elusive profits
By now, Amazon Prime was becoming de rigueur. For customers, Prime meant free shipping and guaranteed delivery in a short time frame. When ordering from Amazon, I almost always chose products listed as Prime, and I wanted to give my products the same lifeline.
Becoming a Prime seller seemed simple enough; I listed my products as "Prime" and incurred the cost of priority shipping. As long as I shipped according to Amazon's guidelines, everything would be kosher.
Yet profits proved elusive. Consider, for example, the kids' dreidel leggings I sold. They were listed with a Prime badge as "on sale" for $22. Amazon took $3.74 in fees off the final sale as well as another $7, roughly, to guarantee the item would be delivered per Prime's specifications within. My business took in $10.84 for each pair of leggings - but that didn't include the advertising fees and the cost of being a professional seller. With all these fees - as well as the cost to produce the actual products - there was no way for my business to make money through Amazon.
I recently downgraded my Amazon Professional Selling account. Some of my products are still listed, but without the ads or Prime badge, and there is minimal traffic. This past Passover, for example, I received a total of two orders through Amazon - compared to 174 through my website where I do make a profit.
There are alternatives to Amazon: Etsy, for example, provides a very supportive environment for small businesses. But Etsy is no Amazon, and it is not the website people turn to for important or time-sensitive orders.
I wish there were a way for independent Amazon sellers like me to feel more "seen" and protected in their system. Couldn't Amazon find ways to offer more exposure for small businesses without sacrificing its customer-first approach? I might not be able to hand-churn a bow for your gifts or get to know you or know your family the way Pop did, but we small businesses are real, and we are human. Maybe there's an algorithm that could recognize that too.
Rabbi Yael Buechler is the founder of Midrash Manicures.
Read the original article on Business Insider
