Amazon had raised prices for ads because various small business were ready to pay the amount, which led to severe competition in advertising. Amazon took this move to display better search results and higher search results for multiple companies. This move affects many small businesses and startups as advertising on amazon is crucial for them.
So, dive in to know all the details.
What do Small Business Owners Have to say?
In a report to NBC, Bernie Thomspon said that he had witnessed a change in the cost of ads. So he started a computer-accessories company known as pluggable. He has been qualified as a small business owner since 2014 and started from a Garage.
He has been placing ads since 2014 on e-commerce sites. Then, the approximate amount he paid for an ad was 14 cents per click. Now, the average money he has to pay is $1.60. That can quickly add up to more than $100,000 a year for some small businesses.
“The common thread we hear from those brands is how difficult it is to get their products seen on Amazon,” Thompson said. “As Amazon has shifted to a pay-to-play model over the last few years, buying ads on their platform has become the most important cost of doing business.”
Amazon’s say on the Issue.
Amazon has become more focused on search result quality. The higher rates will affect small businesses in rural areas which can’t afford to pay for advertisements. Small business owners know the importance of visibility on a platform like Amazon.
This will make them go lower on the search results affecting the turnover significantly. Also, there was an increasing number of sponsored and advertised products on searching the particular product on amazon. So, amazon took this step to decrease competition and show quality search results.
Impact on Customers
Many small businesses fight multiple problems to gain visibility in the internet space. Amazon has 400 billion U.S. dollars sales per day, and advertising the product here is crucial.
So, without any choice, many business owners are paying handsome money for advertisements on amazon. Mason reads through customers’ history, uses Alexa, and shows relevant content to particular customers. This is the only option for small business owners to gain visibility, reviews, and orders.
Let’s Wrap It
Amazon said that it supports over 500,000 small businesses, but the hike in advertisement contrasts with the statement. Amazon stated its reasons for taking this step. But, it’s a bad deal for small businesses setting their foot as significant revenue expenditure goes to the Amazon ads.
However, it’s the choice of small business owners to invest or not to invest in amazon advertisements. You can always first try organic traffic and decide the need for amazon advertising later.
