Entrepreneurs

Small retailers gear up for Amazon Prime Day action

Amazon Prime Day may be jam-packed with deals for the e-commerce giant's customers, but for Amazon's small business sellers, it's an opportunity to expand reach in a major way.

The second annual retail event, which starts at midnight (PT) and ends at 11:59 p.m. (PT) on Tuesday, July 12, will feature more than 100,000 rolling deals for Prime members on household items, electronics, toys and more.

It is also set to be a big sales day for the thousands of small businesses that Amazon invited to participate. Of the 34 million items sold on last year's Prime Day, 14 million came from small business retailers, and Amazon expects that number to be even higher this year.

Entrepreneurs like Debbie Bean, who is participating for the first time, are hoping to turn those flash-sale customers into a new loyal following.

Bean, who lives in Los Angeles, sells stained glass home goods and jewelry online via Etsy and Handmade at Amazon, Amazon's store that features invited artisans selling handcrafted goods. Bean has been selling on Handmade since its launch in 2015, and while she hasn't seen a big boost in sales from the site, she isn't willing to give up yet. Bean plans to discount her glass trays by 20 percent on Prime Day, which is the minimum discount retailers must offer, according to Amazon.

Debbie Bean, a Los Angeles-based artisan, is planning to participate in Prime Day for the first time.
Source: Katie Wigglesworth
Debbie Bean, a Los Angeles-based artisan, is planning to participate in Prime Day for the first time.

"I think more people go to Amazon for big-box items for the ease of it," Bean said — but that's one reason why small businesses have a lot to gain by including their products on such a major stage. "We can let people know you can get other things on there as well."

And while a 20 percent discount on top of the fees Amazon charges, which average around 15 percent depending on categories, may seem steep for a small company, retail experts like Jan Kniffen say it's well worth it.

"It's not cheap to play on the internet," said Kniffen, the CEO of New York-based J. Rogers Kniffen WWE, which provides consulting services relating to retail companies. "The biggest growth for small local businesses is on Amazon, and on Amazon it's not as expensive as it would be on your own. The post-sale fees can be painful, but you can dramatically expand your ability to reach a new population."

Handmade seller Madres Jewelry, based in Petaluma, California, has seen those fees offset by major reach. The nonprofit sells jewelry handmade by low-income women as a vehicle for change in their communities in the Dominican Republic, and will be participating its first Prime Day with 20 percent discounts. "We've seen sales grow 300 percent just by selling on Amazon," said founder Kara Klinge.

That's also been the case for Damian Davis (pictured above), the owner of Seattle-based Rainier Wine. The winery has been selling on Amazon for the past three years, and initially orders were coming in at a pace the company couldn't handle. It has since built tools that have made the Amazon business more manageable and is planning to offer discounts of between 50 and 60 percent on Prime Day, after a successful run last year.

"We have a scalable solution to handle Amazon," Davis says of his team of 14 employees. "We are a very small winery, and to be able to participate and even get a small mention in an Amazon email that might go out to millions of customers is significant."

While that reach is no doubt significant, small businesses should also be aware that they are playing on a field swamped with a ton of competition.

"Prime Day attracts a tremendous amount of traction and a massive spike in traffic," said retail advisor Liz Dunn, founder and CEO at Talmage Advisors, based in New York. "If you can rise above the noise and get some attention, it's probably worth it. Summer is a really slow time and retail has been choppy — if you have extra inventory, it's a great way to clear it out and get noticed in the consumer landscape."