In sea of cyber sales, sellers navigate Amazon

A young Springfield-based coffee distributor has secured a presence on Amazon.com, highlighting a trend of attracting a larger customer base through online retail.

Axumite Trading Co., which sells Ethiopian coffee in the United States through an agreement for exclusive distribution rights of To.Mo.Ca. Coffee, of Addis Ababa, Ethiopia, earned product placement on Amazon.com in early December.

The company began selling coffee through EthiopiaJoe.com earlier this year after business partners Roger Wasson and Chris Estes raised nearly $11,000 on Springfield-based crowdfunding site CrowdIt.com. In its first month on Amazon, sales are exceeding those of the company’s own website.

“(Amazon) currently has the coffee in three of its warehouses across the nation and is shipping and fulfilling our orders,” Wasson said.

With product shipped directly from Ethiopia sans UPC codes, Wasson said getting started with Amazon was longer than expected – about four to six weeks for labeling compliance.

“If you want your product to be seen, you’ve go to go there,” Wasson said.

Matthew Turner, an author based in England who offers tips on getting published online through his blog, Turndog Millionaire, said connecting with Amazon is a must for any writer or small business.

“When a giant marketplace with millions of users provides a simple process for you to get involved, why would you not use it? True, it takes its cut, but it’s pretty darn reasonable, especially when you compare it to the traditional model where authors often only receive 10 to 15 percent of royalties,” Turner said via email.

Amazon spokesman Erik Fairleigh said the retailer secures 6 to 25 percent of sales transactions by the more than 2 million companies worldwide that sell on its site. Amazon also collects monthly fees, as well as a 15 percent referral fee for books and a $1.35 closing fee for each book sold.

Turner, author of novel “Beyond Parallel,” as well as several short stories and a nonfiction guide, said his pieces have been offered for free up to $3.99.

“I place my books on several online stores, but more than 90 percent of sales come via Amazon. In my experience, most authors see these types of results, so to not be on Amazon is slightly crazy in my opinion,” Turner said, acknowledging sales at his price points haven’t generated a lot of dough. “It has allowed people like myself to pursue their passion. It’s hard to hate that.”

Seattle-based Amazon.com Inc. (Nasdaq: AMZN) is reaping the benefits, as third-quarter revenue is up 24 percent to $17 billion. Other online purveyors eBay Inc. (Nasdaq: EBAY) hit revenue of $3.9 billion in the quarter, a 14 percent increase compared to the same quarter in 2012. According to IBM Corp., Cyber Monday Web sales rose 21 percent in 2013 compared to last year, and online sales now account for 14 percent of all retail sales, according to the National Retail Federation.  

Colleen Sundlie, owner of Springfield-based organic fruit wholesaler Date Lady, said getting set up on Amazon was easy and worthwhile. She said her dates were placed on Amazon.com about a year ago, earning about $2,000 per month in sales.

“They have the process set up to where it is easy to be merchants, so it wasn’t hard at all,” Sundlie said. “We really haven’t put effort into it, and our sales just keep increasing.”

While the main goal of Date Lady is to get its dates into retail stores, she said Amazon sales are supplemental and provide a level of marketing.

“It is a great way to get some visibility with people all over the United States,” she said.

Fairleigh said Amazon has 200 million active customers around the globe and 100 million in North America. In Amazon’s most recent earnings report, the company disclosed that 40 percent of units purchased on Amazon come from third-party merchants such as Axumite.

“Not only are these merchants thriving on Amazon, but they are an important part of our ecosystem,” Fairleigh said.

Downtown Springfield T-shirt retailer Swagbot has dabbled in e-commerce platforms since its launch six years ago, owner Juli Matthews said.

Matthews said she has seen barriers to entry lowered, helping the company build a sustainable online presence. Swagbot is among Springfield companies selling its wares on Etsy.com.

“We chose Etsy because it had a large customer base of people who would be interested in our products. There is no special technical expertise needed, so my staff can update and implement new products easily,” Matthews said via email, noting she likes Etsy’s internal marketing tools, such as keyword advertising.

Online sales typically only represent around 14 percent of revenue, she said, but in the run up to Christmas, they accounted for about 33 percent of sales.

To further its online presence, Matthews said Swagbot is developing a new online store for the Shopify.com platform. She also has secured Wikipedia as a client, and she now manages sales of Wikipedia merchandise at Shop.Wikimedia.org.

Sales for To.Mo.Ca. Coffee also took a swing upward in December, when Wasson said Amazon shipped out 45 units, which amounts to roughly $800 in gross sales. The product sells on the site for $18 a bag.

“We’re pleased because other than Facebook and Twitter, we haven’t done anything to let people know it’s on there,” Wasson said.