Beware the mighty Amazon
Filed in archive Entrepreneurship on May 21, 2007
CONTINUED FROM PREVIOUS POST
In a previous comment, Harry, one skeptical reader, also mentions Amazon.com.
In fact, those worried about the percentage fees charged by PayPal should know that one of the world's biggest online sellers also charges a .99 cent per transaction fee plus a percentage commission dependent on the type of item sold for anyone participating in it's Marketplace program.
For those who wish to do volume selling, Amazon's Pro Merchant services cost a subscription fee of $39.99 per month with half off for the first two months. This means you will be paying out before you make a single sale.
Again, hopefully by the time you're ready to list on Amazon.com you'll already have a defined market and a workable business model insuring a revenue flow to offset that cost.
For now, forget Amazon and make sure you've actually got a business before you start paying for one.
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Tags: small business startup advice amazon beware+mighty mighty+amazon visa+part
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Mr Wong
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Response from:
Harry Goldberg
(05/21/07 10:34am)
While I appreciate the information about Amazon, I can't believe how you've spun this. My point about Amazon was that it didn't accept Paypal, which was meant to show yet another limitation of its' service. I wasn't attacking Amazon. Yet, by mentioning me at the beginning of this post, you couch this information as if it's proving a point and somehow proving me wrong. Also, you're instructing people NOT to sign up for Amazon? Seriously? It cost nothing to do so and yes, they take a percentage, but they also make your product appear global simply by being on their site! If you choose the forst option (paying .99 cents a sale, plus fees), you don't pay a dime intil you sell something. And since you set the price, you can add .99 cents to the final cost of offset what they take out. Can you please justify what businesses you've ever run so I can understand where you're getting this misinformed business advice from? You're telling people to accept Paypal but don't use Amazon? How in the world are people finding your business?
Response from:
Shawn A. Hessinger
(05/21/07 11:42am)
Harry,
I'll be answering both your and Dave's earlier comments later today. Haven't had the time yet. No, I'm not telling people to avoid Amazon any more than I was telling them to avoid VISA. You made the point that Amazon doesn't accept PayPal. I am simply pointing out that if a beginning entrepreneur finds it to cumbersome to deal with Amazon.com FOR ANY REASON there are always other options until it becomes viable. No one in their right mind would suggest that any of these options--selling on Amazon, using VISA for payments, registering for patents and trademarks, incorporating or opening a million separate business accounts to keep finances neatly separate--would not be ideal. The fact is that many entrepreneurs simply don't have the resources to take advantage of them from day one. The answer to this given by many financial advisors is that entrepreneurs should simply borrow the money or leverage the resources of a deep pocketed investor even if it means loosing control of all or part of the product or business they have created. There are a number of entrepreneurs who suggest that this is not advisable even if you can accomplish it, but that is not the position I am advocating here. I have been self employed for half my adult life in one enterprise or another and have never put out much money to start new ventures but always reinvested as they began to make money. The alternative in most cases, as it is with many start-up entrepreneurs, would have been to make no money at all and never start a business because I couldn't afford all the bells and whistles. I am quite sure you are not advocating that to do nothing would have been a better choice.
I'll be answering both your and Dave's earlier comments later today. Haven't had the time yet. No, I'm not telling people to avoid Amazon any more than I was telling them to avoid VISA. You made the point that Amazon doesn't accept PayPal. I am simply pointing out that if a beginning entrepreneur finds it to cumbersome to deal with Amazon.com FOR ANY REASON there are always other options until it becomes viable. No one in their right mind would suggest that any of these options--selling on Amazon, using VISA for payments, registering for patents and trademarks, incorporating or opening a million separate business accounts to keep finances neatly separate--would not be ideal. The fact is that many entrepreneurs simply don't have the resources to take advantage of them from day one. The answer to this given by many financial advisors is that entrepreneurs should simply borrow the money or leverage the resources of a deep pocketed investor even if it means loosing control of all or part of the product or business they have created. There are a number of entrepreneurs who suggest that this is not advisable even if you can accomplish it, but that is not the position I am advocating here. I have been self employed for half my adult life in one enterprise or another and have never put out much money to start new ventures but always reinvested as they began to make money. The alternative in most cases, as it is with many start-up entrepreneurs, would have been to make no money at all and never start a business because I couldn't afford all the bells and whistles. I am quite sure you are not advocating that to do nothing would have been a better choice.
Response from:
Harry Goldberg
(05/21/07 4:27pm)
I can answer your reply with a simple statement: And I quote..."I have never put out much money to start new ventures but always reinvested as they began to make money." Mr. Hessinger, If your approach to business has worked so successfully, then can you mention ONE business that you've run? You mention new ventures as if there are many...I would like you to give me ONE that I've heard of.
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