Is Amazon a threat to your business?

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SLI Systems have published a report revealing that 36% of online business view Amazon as more of a threat than last year and 35% consider it to be just as much a threat as a year ago.

Only 6% of the SLI study respondents feel Amazon poses less of a competitive threat. Thirty-two percent of U.S. respondents and 38% of those in the UK report that Amazon is more of a competitive threat compared to the same quarter last year.
– SLI Systems

A total of 71% of online businesses considering Amazon to be a threat to their future is pretty big, but it might not tell the whole story. Digging deeper into the report reveals that only 39% of the businesses surveyed actually sell on Amazon. That could mean one of two things – either most businesses not selling on Amazon consider them to be a significant threat (hardly surprising) or a lot of business that do sell on Amazon are worried.

To balance Amazon being a threat to business, 84% of businesses surveyed are expanding their product lines, 56% are taking on new staff and 61% are investing in new technology. Importantly, 93% of online businesses expect revenue/profit to increase or stay the same – only 5% expect a decrease in revenues/profits and amazingly 2% of companies don’t measure their year on year performance.

There is very little doubt that Amazon are turning the online industry on it’s head, and not just traditional ecommerce – they touch everything from food, groceries and house hold pantry supplies to website hosting and streaming media. The one thing that we do know is that anecdotally sellers who trade on eBay roughly double their business overnight when they start selling on Amazon.

Amazon may be a threat to online (and in fact off-line) businesses, it may well be a threat to businesses that sell on Amazon, but for those who embrace the marketplace selling on Amazon and being aware that Amazon Retail competes with you is still better than throwing in the towel and not selling on Amazon.

Do you feel that overall Amazon is a threat to your business, or do the benefits outweigh any downsides?


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