A lot of like-minded Amazon or Ebay business owners stock the same products from the same drop shipping facilities and suppliers, creating price competition amongst themselves on the same platform.
This is a quick route to bare bones profits. Add to that the hefty fees you need to pay and you could easily go broke.
Lack of Control
Amazon will shut your store down if they decide to for any reason and this happens a lot.
An example of this is if Amazon see that a particular product is earning a lot of revenue, they will sell the same product themselves and shut down all the competitors on their platform selling this product.
Expect to pay anywhere from 6 to 15% in fees on all sales.
Amazon charge a percentage of your sales (6 – 15%) plus ongoing monthly fees if you use their FBA program.
eBay charge their sellers between 10% to 12% commissions for all sales you make on their platform.
No Customer Data
Your customers are not your customers, they are Amazons customers. You don’t get access to this data and therefore you are missing out on the bread and butter of most businesses = repeat customers.
It is against Amazon policies for the seller to market directly to customers through email marketing or other methods. If you do, they’ll immediately shut down your store.
Since the average ROI (return on investment) of email marketing is 4300%, you are literally losing thousands of customers and potential repeat sales.
If you are wanting to scale and sell your business, the lack of customer data will go against you as a healthy database of customers is what increases a businesses value.