Founders often frame Amazon and their own website as competing choices. In practice, they perform different jobs. The better question is not “Which one is best?” but “Which channel is best for this product, at this stage, for this customer and at this margin?”
What Amazon can give a young business
Amazon brings a large pool of shoppers already prepared to transact. For products that fit marketplace search behaviour, that can remove some of the burden of persuading a customer to trust an unknown standalone website.
It can also provide a useful environment for validating demand, pricing, product content and customer feedback.
What Amazon takes away
The marketplace charges for access and controls much of the customer experience. Competition is visible, policies can change, advertising can become important and the brand has less freedom over merchandising and customer relationships.
A product that looks profitable on a direct website may have different economics after commission, fulfilment and marketplace advertising.
What your own website provides
A direct-to-consumer site gives greater control over brand, range, merchandising, bundles, content, customer journeys and first-party relationships. It also creates an asset that is not entirely dependent on a third-party marketplace.
The trade-off is that the business must create its own traffic and trust. A beautiful website with no reliable acquisition channel can remain invisible.
Think at SKU level, not just business level
Some products may be excellent marketplace products because customers search for a known need and compare options. Others may require education, bundles, configuration or storytelling that works better on a direct site.
The correct channel mix can therefore differ across the range.
A sensible early-stage approach
- Understand unit economics by channel. Include all relevant commissions, fulfilment and advertising.
- Identify how customers discover the category. Search-led demand behaves differently from discovery-led demand.
- Make product data reusable. Strong titles, attributes, images and identifiers make multi-channel expansion easier.
- Synchronise inventory. Overselling because two channels do not share stock is not a growth strategy.
- Measure incremental value. Do not assume a marketplace sale would otherwise have happened on the website.
Do not let channel ideology replace commercial judgement
Some founders want every customer on their own website because it feels more valuable. Others become dependent on Amazon because sales arrive more easily. Both extremes can create unnecessary risk.
A resilient business uses channels for what they are good at and understands the economics of each one.
Your website and marketplaces do not have to compete. They can form a portfolio of routes to the same customer opportunity — provided stock, data and profitability are managed together.
Marketplace expansion is one of the operating capabilities described in what Midori Partnerships brings.
This article is general business information only. It is not legal, tax, investment or financial advice. Any equity, funding or shareholder arrangement should be considered with appropriately qualified advisers.