Amazon Prime Day will be on October 13 and 14.
These days it’s hard not to have an opinion about Amazon.
While some choose to focus on the negative, including workplace environment concerns in some of its warehouses or the impact that online retail has had on traditional brick-and-mortar retail stores, many others are extraordinarily grateful for the ability the company has provided during the pandemic to easily order most anything and receive it in a timely, reliable manner without having to step outside their homes.
What often gets lost in the shuffle of these debates is the positive impact that the company is having on small businesses, including minority-owned businesses. Amazon’s upcoming Prime Day Event (scheduled for Oct. 13-14) offers an interesting example.
For the first time ever, Prime Members who order $10 or more from any small business on Amazon between now and Prime Day, will receive $10 of credit that can be used to purchase anything (from large or small businesses) during Prime Day.
Amazon Prime Day 2020 is Oct. 13-14. (Photo: Amazon)
Given the huge traffic on Prime Day, that’s powerful incentive for consumers to purchase from small businesses – something that a lot of people may not have tried just yet.
The move also highlights some of the efforts the company is making to help small businesses across the US, which, let’s not forget, represent over 99.5% of all US businesses and employ half the country’s workforce. While many might presume that Amazon and other online retailers’ have only negatively impacted small businesses (and, no doubt, many small businesses have been hurt by the rapid shift to online shopping brought on by the pandemic), there’s a whole range of small businesses that have benefitted from being on Amazon.
Small businesses expanding to digital
Some of these are existing small businesses that have successfully transitioned to functioning in the digital world of online shopping, while others are new small businesses that have been created specifically for the online world, including app developers, content creators, and more. Toyin Kolawole, an entrepreneur who immigrated to the U.S. from Nigeria about 20 years ago, provides some fascinating insights.
“I started my company (Iya Foods – a purveyor of natural grocery staples such as flours and spices made from traditional African ingredients) with two products and would go to food shows trying to get noticed,” she said. “It was very expensive to participate and hard to make an impact.”
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While she eventually succeeded in getting some of her products into Target, she faced numerous challenges when talking to most traditional retailers. “When I would talk to grocery store chains or other retailers, they would almost always express concern about how few Africans frequented their stores,” she relates. “I would then say, well, ‘Do you sell Greek yogurt?’ Did you ask those suppliers how many Greeks might come into their stores?”
Even when she had success in some specialty stores, Iya Foods products were often placed in locations like dedicated Urban sections. “With Amazon, I could take my flour and just put it in the flour section, so it gave me the opportunity to compete fairly.”
Creating digital storefronts on Amazon
If a company meets certain requirements, Amazon also allows small businesses to create what’s called Enhanced Brand Content, or EBC, which is essentially a digital storefront. “The power of Amazon is that you get the opportunity of telling the story of a product,” Toyin notes. “Plus, you get feedback on your product, and you get to know your customers on a 1:1 level.”
As appealing as this all sounds, however, there were certainly challenges along the way Toyin admitted. Just as many large companies are going through the often-difficult process of digitally transforming themselves, small businesses that want to sell on Amazon have to learn to function in the online digital world as well. “I used Amazon Seller University quite a bit,” Toyin said, “especially early on. There were days when I felt like I was back in school.”
Iya Foods takes advantage of a service called FBA (Fulfillment by Amazon) that allows small businesses to have their products stored in and shipped from Amazon warehouses. “Fulfillment services from Amazon has been hugely beneficial. They let us compete with companies that are significantly bigger than us.” As great as that is, though, the fees for using FBA and other Amazon services, which range up to 30% of the sale “sometimes made me feel like I was working for Amazon,” Toyin acknowledged.
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Despite those concerns, however, it’s clear she’s a strong believer in the opportunities and level playing field that Amazon can offer to small businesses. “Selling on Amazon can be a real confidence booster, especially when people like what you do.” It has also allowed Iya Foods to expand well beyond what they could have done with traditional retail alone.
For those small businesses that may be considering the move to online, Toyin suggests getting as much information about whatever category they want to be in. “Learn the competitors and read the reviews,” she commented. “I read every review for every competitor and learned a great deal in the process.”
Channeling the entrepreneurial spirit she said she learned by starting to work at the age of 9 in her family’s business in Nigeria, Toyin added, “If you want to experiment, Amazon is a great place to try.”
For Prime members who want to experiment with supporting small businesses like Iya Foods and thousands of others on Amazon, they can check out the Small Business section of Amazon.
Given the challenging times many are facing, it’s a great place to start.
USA TODAY columnist Bob O’Donnell is the president and chief analyst of TECHnalysis Research, a market research and consulting firm that provides strategic consulting and market research services to the technology industry and professional financial community. His clients are major technology firms including Microsoft, HP, Dell, Samsung and Intel. You can follow him on Twitter @bobodtech.
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