A story from a seller on Amazon

This article is part of the On Tech newsletter. You can register here to receive it weekdays.

Molson Hart, who runs an educational toy company in Texas, wouldn’t be as successful as he was without Amazon bringing the shoppers of the world to his doorstep.

But he’s also frustrated that the company has to pay back too much and he’s too reliant on Amazon for its ever-changing, complex decisions.

My recent discussions with Hart have provided a glimpse into the often complex feeling of people running the companies that fill the Amazon Everything Store. It feels as if he is describing an almost loving but sometimes frantic relationship with an overbearing partner.

A business doesn’t represent millions of people selling products on Amazon, but Hart reiterates the disappointment other merchants have expressed. I find our conversation a useful insight into how a business organizes itself around Amazon and obsesses about it.

What happens to merchants like Hart’s Viahart means not only what we buy and how much we pay, but also to the health of the American economy.

Amazon’s appeal

I reached out to Hart after I read his recent blog post (and clear explanation) summarizing 2020 sales for Viahart, which started 10 years ago, mainly selling toys in stores. Hart says Viahart’s revenue has grown from $ 2,000 in the first year to $ 7.4 million in 2020, and much of its recent growth has come from Amazon. Viahart also operates its own website and sells toys on Walmart.com, eBay and elsewhere. However, 93% of Viahart’s sales last year were on Amazon, Hart said.

You know why. Amazon is by far America’s largest digital mall. By selling there, Viahart doesn’t have to find customers on her own.

Viahart’s figures also show that people on Amazon are more likely to make a purchase, not just browse, than those who shop on the toy company’s own website. Hart says he assumes that Amazon Prime members are eligible to buy, and knows that they’ll usually get their order fast with no extra shipping charges.

A complicated relationship

But even though Amazon is his lifeblood, Hart has mixed feelings.

“It’s annoying to be tied to a company that makes a decision of your choice that might be unfair or we don’t control,” Hart told me. “But I cannot complain. I mean, I do complain, but it is. “

One of the more interesting details for me is how much Viahart sells on Amazon.

According to Hart data, for every $ 100 product Viahart sold last year on Amazon, his company keeps $ 48.25 on average. He said that selling on Amazon is much more expensive than on the Walmart or eBay website. Hart says the cut Viahart pays Amazon typically increases each year, even though it has declined by 2020.

Amazon’s sales commission – about 15% – is almost the same as that of other shopping sites, like Walmart. Hart says the increased costs for additional services like paying Amazon to store toys in their warehouses and ship the product from there. The seller doesn’t have to use Amazon’s warehouse or shipping, but the company makes a big advantage for this.

Advertising on Amazon is optional, but like many merchants, Hart says he feels compelled to buy ads that increase Viahart’s chances of being seen.

When merchants like Hart pay more for Amazon or Walmart, it usually means they have to increase the price of the product for their customers.

An Amazon spokesperson said the company offers a variety of optional services to sellers, making Amazon “cheaper than the value it offers compared to other retail markets”.

An ever-changing store

Hart also says that he works to the liking of Amazon’s computer-powered recommendations, both good and bad. Around Halloween last year, Viahart experienced a huge sales surge when Amazon introduced one of its stuffed tiger toys to costume buyers related to the Netflix series “Tiger King”.

But a few days ago, Hart was disappointed when searches for Viahart’s Brain Flakes showed a “Amazon Choice” label on a similar competitor toy that Viahart sued for trademark infringement. (After him tweeted about it and I asked Amazon for comment, the trademark is gone. On Tuesday, there’s an Amazon’s Choice label on the Brain Flakes product.)

Hart said people shouldn’t feel sorry for his fast-growing toy business, but he wants to draw attention to some of the downsides of e-commerce. I asked him if he would pay anything for sale on Amazon. He said yes. “It’s the unfortunate reality of selling toys,” he said.

If you have not received this newsletter in your inbox, Please register here.

Before we go …

Hold this

Happy 4th birthday big. Fiona hippopotamus celebrated with a multilayered cake made from shaped frozen fruit.

We want to hear from you. Let us know what you think about this newsletter and what else you’d like us to explore. You can contact us at [email protected]

If you have not received this newsletter in your inbox, Please register here.