Surrey entrepreneur Oliver Bleicher is excited about Amazon.com Inc.’s (Nasdaq:AMZN) Prime Day on July 11, not because he is an avid shopper but because this is the first year that his small business is selling discounted products as part of the Seattle e-commerce giant’s annual Prime Day promotion.
Bleicher's HappyGrün generates about $150,000 in annual revenue by selling plants, fertilizer and a soil-free system of growing indoor plants. Much of that is from sales on Amazon.ca.
Although Bleicher has been selling on Amazon.ca for about two years, he did not take part in the company’s Prime Day promotion last year because he did not think his five-employee company was ready.
This year, he plans to offer Amazon.ca shoppers a 30% discount on merchandise and he expects that sales will soar, compared with what he would do on an average day.
That sales bump is not only because of the discounted price but also because taking part in Amazon’s Prime Day enables Bleicher to get his products in front of tens of millions of people who will be on Amazon’s websites searching for deals.
“The main thing for us is to get our product out and have people buy it, test it and write reviews,” Bleicher told Business in Vancouver on July 10.
“The more reviews you have, the more traction you actually get. So we’re not taking part just for sales and profit. It’s really about getting the product out because the more you sell, the more Amazon pushes [products to be more visible on the site.]”
This is the third year that Amazon has held its annual gigantic sale on its Amazon.com and Amazon.ca websites on a designated summer day, which it calls Prime Day.
In addition to leasing 156,000 square feet on seven floors of the Telus Garden office tower on West Georgia Street, Amazon also operates two fulfillment centres in Metro Vancouver: a 200,000-square-foot facility on Annacis Island, in Delta; and a 550,000-square-foot facility in New Westminster. Both those facilities enable Amazon to offer free same-day shipping to Prime members who order before noon, buy something from a selected range of products and live in most of Metro Vancouver.
People who do not buy Prime memberships can also buy products on the site and get same-day shipping where it is offered but they have to pay a $11.99 shipping fee.
Small business advocates, such as SOHO Business Group CEO Moe Somani, say Amazon is a great place for small businesses to sell products because adds a valuable sales channel and provides product exposure.
“Amazon boasts 184 million visitors per month,” said Somani. “That can deliver a lot of eyeballs for small businesses.”
He pointed to a survey that Internet marketing firm BloomReach Inc. released last year, which found that more than 50% of shoppers start their searches for products by going to Amazon websites.
Despite the value that he sees Amazon providing, Somani warns against relying exclusively on its websites for sales.
“Small businesses should not look at Amazon, or other marketplaces, such as eBay, NewEgg or Rakuten to be their primary source of revenue,” he said. “Amazon should be one of a multi-channel of ways to sell products. You could be taking a big risk in your business by putting all your eggs in one basket.”
Analysts estimated that Amazon generated more than US$500 million in sales on Prime Day in 2016. The company does not reveal its Prime Day sales, much less break out the value of its Prime Day sales in Canada.
Amazon executives, however, expect that this year’s Prime Day will set records and be the biggest ever because Amazon has more Prime members and more products for sale than last year.
The company’s public relations lead for Canada, Kaan Yalkin, told Business in Vancouver on July 7 that number of people who have purchased Amazon Prime memberships increased 80% during the 2016 calendar year.
Those annual memberships cost $79 plus tax and give members perks such as free shipping, free cloud space for data and access to the Amazon Prime Video streaming video service.