Why Small Start-Ups Make Money on Amazon than Large Businesses, Lessons Learned

Bigger may be considered better in many circles, but when it comes to business, small isn’t necessarily a pushover. In fact, large businesses can learn a thing or two about their smaller brethren. Here are some of those lessons that they could benefit from.

Forget Multi-Channels, Focus on Selling at one Channel: Amazon

Amazon is now the biggest online E-commerce market place. It has already surpassed eBay, Google Shopping, Walmart, Rakuten. Since April 2020, over 80% of the online shoppers go directly to Amazon to buy products.

Focus is the key, there is no need to waste your time on listing your products at eBay, Google Shopping, or Rakuten. Just put all your efforts at the biggest online market place. That is Amazon.

Why is Amazon is so popular? Because consumers love free shipping, easy returns, and have many different choices.

No wonder Millions of Amazon sellers are now at this marketplace promoting their products. Lots of sellers are making Millions of dollars in sales through this platform. It also means the competition is getting stronger.

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Make the most out of every dollar

Having too much money isn’t always a good thing. Large companies, which have deeper pockets, don’t always use their budgets wisely. For instance, many today still resort to spending large amounts of resources on inefficient advertising efforts like direct mail marketing (i.e. unsolicited snail mail), flash mobs, telemarketing, and other outdated techniques.

Start-ups, on the other hand, are usually strapped for cash, so they try to make the most out of every dollar in their budget. To make up for the lack of funds, small businesses try to be more creative in whatever they do. Some make low-cost viral videos that generate buzz for their products, while others develop an active online presence through social networks. Whatever their approach, start-ups squeeze more out of the resources available and get great results.

Don’t put too much money into the inventory. Cash is king!

The product turnover rate must be high. Sell your products at Amazon and sometimes you need to lower the price and just get the product cost back.

Move quickly, because the world is changing fast

Large corporations are known for their red tape. It takes forever to get anything authorized or done, thanks to voluminous paperwork, required licenses, committee approvals, enforcement practices, and countless other bureaucratic layers. Granted, many of these processes in place are there to protect the company but more often than not, they cause delays and missed opportunities.

Start-ups act more independently not only because of their size but also because many–if not all–know what needs to be done; everyone wears many hats; more people are trusted to make decisions; and the lack of resources pushes people to maximize the time. This gives people more discretion to act.

Not all these structures would apply to other businesses (particularly the large ones), but there’s something to be learned with how many small businesses are able to do more.

Foster a creative work environment

Creativity in the workplace helps companies deal with many difficult organizational problems. It improves teamwork, boosts productivity, increases employee engagement, and makes it easier to recruit and retain top talent. However, you can’t just tell your employees to be creative; it’s something that is cultivated.

Large companies, however, usually don’t have an environment that promotes creativity. Some aren’t open to experimentation; others insist on impossibly difficult deadlines; and most encourage hard work but no play, all of which stifle imagination.

Small companies, in contrast, are generally more open to innovation and new ideas. Many allow flexible work schedules, provide a more relaxed and creative work environment, hire people with diverse skills, and encourage their people to think laterally.

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More open communication

Communication can sometimes be a problem in larger companies. Consider that the fall of many major corporations like Enron, BP, and Nokia could be attributed to poor communication.

Admittedly, it’s also possible for start-ups to fail because of communication, but because of their size (and proximity), it’s easier for small business owners to be more transparent with their employees. Remember: open communication with leadership and the workforce increases cooperation within the company, fosters employee trust in management, and boosts productivity, all of which lead to a better bottom line.

Allow flexible work schedules

A great number of start-ups allow their employees some flexibility in work hours and the option to telecommute. This doesn’t mean that all workers would permanently be working from their homes or show up only when they feel like it–the flexibility comes with certain limits (e.g. twice per month for telecommuting and fixed core hours for flexitime) that regulate employee schedules.

When used properly, having a flexible work schedule boosts employee morale and commitment to the company; reduces tardiness, absenteeism, and employee turnover; lets staff work when they’re most productive; improves customer service due to longer operation hours, and reduces overhead.

Get in touch with their origins

Since they’ve grown so much, many large corporations–especially the old ones–have already lost their connection to their roots. Since the original founder is no longer there, this sometimes causes the company to lose its original identity and focus.

Small companies, conversely, still have their original vision and passion because its founder and many of its pioneers are still there; this gives them the edge because they still have their identity and they believe in what they’re selling.