Tuesday, October 16, 2012

Blindsided by Amazon

Do you have items for sale on Amazon.com?


As a small business owner I’ve had to learn how things work from scratch. I don’t have someone to lead me through the muck and mire of solving business problems or helping to make the correct business decisions. I’ve had to pick and choose who to do business with as suppliers, sub-contractors and various helpers. Not all of my picks have been good. Some have been eye opening, some have been scary and some are so questionable I wondered if their maneuver was even legal.

 

We sell a few items that are really general in their appeal, e.g. iPhone cases and decorator items. Not super high end, but are good sellers where we can make a little extra money. While not fancy, the products are innovative and practical. This is probably why they sell so well. The items are a little trendy which lead me to believe they might have a finite shelf life. This means they won’t be top sellers forever. What is interesting to see is when a big retailer takes interest in your product.


Amazon.com took an interest in our iLids when we began selling them on their site. They even ran a google.com search ad which directed people to our item on their site. We were selling quite a few and all of a sudden sales slowed. Amazon then put a hold on our money, not our ability to continue to sell the item, just our ability to draw money from our account. Before that problem was resolved they put a hold on our entire account. We couldn’t sell any items. They wanted tax payer identification information. What I thought was wrong was to hold our account and suspend sales for information they could have simply asked for and would have received. We did send over the required information within the hour.

 

I read a Wall Street Journal article a while back that discussed how Amazon sometimes went into competition with its retailers. Amazon sometime test markets a product using the retailers on their own site. They figure out what sells good, what is the minimum pricing and where buyers come from before they go into direct competition with a retailer. They use your own sales information to become your competition. Now I’m a little afraid after the entire hubbub, even though our account is released and back up and running. I wondered what Amazon was doing and why. I guess it remains to be seen and only time will tell.

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