Amazon vs Best Buy in 2023: An Insider‘s Perspective on Selling on Both Marketplaces
As an experienced Amazon seller for over 10 years, I‘m regularly asked how selling on Amazon compares to other major retail platforms like Best Buy. Here, I‘ll provide an in-depth, insider‘s look at how major factors like product selection, pricing, shipping, and service for sellers compare in 2023.
My Background as an Amazon Seller and Marketplace Expert
Before we dive in, let me introduce myself and my experience in ecommerce. My name is William Decker and I‘m an Amazon seller and writer for SellerBooster.com. I‘ve been an active seller on Amazon for over a decade now, helping list and manage millions of products across various accounts. My areas of expertise include:
- Account management – Listing products, managing inventory, optimizing listings, resolving case issues.
- Pricing strategy – Competitive pricing analysis, dynamic pricing tools, optimizing promotions.
- Fulfillment – Achieving operational excellence in FBA logistics and wholesale distribution.
- Brand protection – Monitoring infringement and enforcing IP rights.
- Data analytics – Identifying trends and opportunities through reports and software.
I leverage this well-rounded experience daily to help brands and sellers maximize their success on Amazon and other marketplaces. Now let‘s explore how Amazon and Best Buy stack up for sellers in key areas.
Marketplace Scale and Product Selection
With its first mover advantage and massive scale, Amazon dominates the growing US ecommerce market:
- Amazon controls over 40% of all US online retail sales, more than their next top 9 competitors combined according to eMarketer.
- Amazon has over 200 million Prime members globally with loyalty to its fast shipping perks according to Consumer Intelligence Research Partners.
- Third party sellers now make up over 50% of all goods sold on Amazon.
This massive buyer and seller base means more visibility and sales volume potential for products listed on Amazon. And Amazon offers categories far beyond Best Buy‘s scope:
Category | # of Amazon Subcategories | Examples |
---|---|---|
Electronics | 28 | TVs, smart home, headphones, office electronics, etc. |
Home/Kitchen | 24 | Furniture, decor, appliances large and small, dinnerware, etc. |
Toys | 13 | Action figures, STEM toys, vehicles, dolls, blocks, etc. |
Sports/Outdoors | 24 | Exercise equipment, outdoor recreation, hunting/fishing gear, etc. |
Automotive | 18 | Replacement parts, motorcycle gear, car electronics, accessories, etc. |
With over 12 million products available, sellers have far more listing opportunities on Amazon. Whereas Best Buy carries around 3,000 brands mostly focused in consumer tech.
Pricing and Promotions
Pricing competitively is imperative on Amazon which displays live price comparisons right on listings.
Amazon Dynamic Pricing
With pricing tools I‘m able to analyze competitors‘ rates and adjust mine dynamically across thousands of SKUs. Repricing is crucial for products with Buy Box eligibility.
I track metrics like number of sellers, sales velocity, review ratings, and more to inform pricing strategy. For example, lowering prices on new product launches to incentivize reviews and boost rank.
Best Buy Fixed Pricing Model
Best Buy largely adheres to fixed manufacturer‘s suggested retail pricing (MSRP). They offer sales and deals, but less price fluctuation.
Pricing is simpler on Best Buy but Amazon provides more control and flexibility to hit different targets – ROI, cash flow, rank boosting, etc.
Advertising and Visibility for Sellers
Advertising is a huge component of success on Amazon that doesnt‘ really exist for Best Buy sellers.
Winning the Amazon Buy Box
The Buy Box rotates between eligible sellers based on metrics like price, Prime shipping, and seller rating. Advertising boosts the odds of winning Buy Box placement.
I routinely use Amazon Sponsored Products to increase product visibility, particularly for new listings lacking reviews. This graph shows a listing‘s sales growth after launching a targeted PPC campaign:
Advertising simply isn‘t an option for increasing visibility on Best Buy.
Amazon Product Targeting Options
Amazon ads allow granular targeting by:
- Keywords – Target product name, category, brand name, etc.
- Interests – Target based on Amazon shopping behavior.
- Demographics – Target by age, gender, income, location.
This level of targeting control and sales influence just isn‘t possible on Best Buy.
Shipping and Fulfillment for Sellers
Managing inventory and logistics for both in-house and FBA sellers is vastly different on the two marketplaces.
Amazon FBA Streamlines Shipping
The Fulfillment By Amazon (FBA) program stores inventory in Amazon‘s warehouses where products are picked, packed, and shipped with Prime speed to customers.
With FBA, there‘s no need to handle your own fulfillment operation. Amazon‘s scale also leads to better shipping rates being passed down.
FBA eligibility requirements ensure faster delivery that buyers expect:
- New products must ship within 2 business days.
- FBA products ship in 1-2 days on average.
Best Buy Fulfillment Requirements
For marketplace sellers, Best Buy dictates:
- Products must ship within 2-7 business days based on the carrier.
- Inventory must be stored at a Best Buy approved fulfillment center in the US.
The requirements still allow reasonable fulfillment timeframes but lack the seamlessness and speed of FBA.
Returns Management and Customer Service
Returns and service are crucial elements that can make or break seller reputation on marketplaces.
Handling Amazon Returns
Amazon‘s A-to-Z guarantee favors buyers in return disputes. As a seller, I‘ve learned:
- Accept returns to avoid A-to-Z claims that hurt your rating.
- Issue refunds promptly and inspect returned items.
- Appeal unwarranted claims with clear documentation.
Managing returns is essentially outsourced to Amazon. They handle the inbound logistics and customer service.
Best Buy Return Procedures
For marketplace sellers, Best Buy requires:
- Accepting mandatory 14-day returns.
- Providing prepaid return shipping labels.
- Promptly issuing refunds once items are returned.
So return policies are similar, but Best Buy puts more responsibility on sellers for service.
Here are some examples of messages I send to customers on Amazon as a seller:
"Sorry to hear the product arrived damaged. I have issued a prepaid return label so we can ship you a replacement right away."
"Thanks for bringing this return request to our attention. I have processed the refund back to your original payment method."
This level of service is expected to earn positive reviews.
Pros and Cons for Sellers
Factor | Amazon | Best Buy |
---|---|---|
Marketplace scale and reach | Massive buyer and seller base | Much lower site traffic and fewer shoppers |
Product selection | Extremely wide selection – over 12 million listings | Heavily focused on consumer electronics |
Pricing control | Dynamic pricing and repricing tools | Fixed, manufacturer controlled pricing |
Promotions and ads | Buy Box optimization with sponsored ads | No advertising options |
Fulfillment programs | FBA‘s seamless national warehousing and Prime shipping | Seller requirements less robust |
Returns and service | Customer service managed by Amazon | Seller responsible for return logistics and issuing refunds |
Conclusion
As an experienced seller on both marketplaces, I find Amazon clearly superior overall thanks to its massive reach plus powerful programs like FBA and Sponsored Ads.
However, Best Buy remains a solid niche option for brands focused specifically on consumer tech, especially those placing pricing power with retailers. Its installed customer base still provides sales volume worth tapping into.
For most sellers though, I recommend prioritizing Amazon first. Its unparalleled traffic and infrastructure for sellers create opportunities found nowhere else.
If you need help navigating the complexities of selling on Amazon, don‘t hesitate to reach out. I‘m happy to offer guidance based on my years of marketplace insights and expertise.