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Small and Medium-Sized Businesses in Canada See Rapid Growth by Selling on Amazon During the Pandemic: Interviews

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A lot has changed within and around the retail industry since March 2020 and the first wave of lockdowns that were to set a tone for the 16 months that followed. Social distancing protocols and other public health restrictions quickly led to the cocooning of families and individuals across the country and a subsequent shift in consumer purchasing behaviour toward digital channels. The increased online activity displayed by Canadian consumers has no doubt benefitted perennial ecommerce giant Amazon. However, as much as the company has prospered as a result of the pandemic-induced transformation of shopping preferences, it’s also served a critical role in ensuring that the product needs of Canadians everywhere have been met while providing small businesses throughout the country with a platform and the reach necessary to succeed during these challenging times.

Small and medium-sized business boom

According to the 2020 Amazon Canada SMB Impact Report, which focuses attention on the performance of small and medium-sized Canadian businesses (SMB) selling on the Amazon marketplace, 30,000 Canadian-based third-party sellers from all 13 provinces and territories were active selling on Amazon.ca in 2019, grossing more than $1 billion. It’s a staggering number that represented a growth of 40 percent year-over-year, adding to the more than $2 billion that Canadian sellers sold on Amazon stores around the world. And, the numbers are only getting better. For the 12-month period ending October 3, 2020, Canadian SMBs enjoyed an average of $110,000 in sales, up from $65,000 the previous year, while the number of Canadian SMBs that surpassed $1 million in sales grew by more than 80 percent. Kristin Gable, Senior Manager, Corporate Communications at Amazon Canada, recognizes the influence that the pandemic has had on shopping behaviour, but believes that the success of its sellers is simply a continuation of the recent positive trajectory of sales on its stores, supported by the company’s commitment to help its partners grow.

Kristin Gable

“There’s no doubt that as Canadians have been forced to stay home during the pandemic, Amazon has played an increased role in supporting a lot of their shopping habits,” she says. “We’re very proud to have been able to get Canadians the products they’ve needed quickly and safely, while also protecting the health and safety of our employees. And we’re just as proud to have been able to create even more opportunities for our many selling partners during this time, whether they’re partners that have been with us prior to the pandemic or new sellers that have been looking for a new retail channel in the changing climate that’s been created by COVID-19. Our commitment is always toward helping them and supporting their continued growth. It’s a fundamental part of our approach and an extension of our dedication to maintain our focus on the customer.”

Flexibility and variety of selling plans

A sizeable amount of Amazon’s customer focus shows up in the selling plans that it makes available for its merchant partners, which are developed through the selection of a number of flexible service options. An Individual plan, for those who are perhaps just testing the ecommerce waters, costs sellers CDN $1.49 per unit sale, while the Professional plan, meant for businesses that sell a minimum of 30 products in a four-week period, costs CDN $29.99 per month. In addition to the cost of a merchant’s selling plan, Amazon charges a referral fee for each item sold which, for most of the product categories on the marketplace, ranges between 8 and 15 percent. Merchants also have the option to ship their own orders or, for a fee, leverage Fulfilment by Amazon (FBA) and allow it to handle shipping, customer service, and returns. Some sellers may incur additional fees, such as long-term storage fees, or choose to pay for optional programs like advertising or premium account services depending on the volume of product that they sell and their desire to grow. 

It’s an impressive suite of services that the company has steadily built and refined since it first made its virtual shelf space on Amazon.ca available to sellers back in 2003. It’s allowed many Canadian businesses, despite their size and presence, to complement their existing offering and channels or to grow exclusively on the Amazon platform. The virtual marketplace, as Gable points out, has also served a significant and pivotal role in helping SMBs in the country not only endure a turbulent and uncertain time, but to thrive as well. But, most importantly, she says, the platform is providing an opportunity for innovative entrepreneurs to showcase their wares, increase their exposure and convey the personalities of their brands.

“The fact that there is such a significant number of Canadian small businesses selling on Amazon.ca speaks to how broad and robust the Canadian small business community is,” she asserts. “It highlights a very entrepreneurial spirit within the country. Many have conceived their idea and launched their business in the past year and have built their selling strategy exclusively around Amazon’s services. And there are also a lot of sellers who have a much more diverse retail strategy with a brick-and-mortar store and their own ecommerce storefront, but selling on Amazon helps them reach customers outside of their community, province or even country. Despite the business, however, Amazon’s Storefront marketplace provides them with the platform and opportunity to really express the uniqueness of their brand.”

Focus on Canadian entrepreneurs

Image: Drizzle Honey Products

To help increase exposure to entrepreneurs in the country, just last year Amazon launched its first ever Storefront aimed at spotlighting Canadian small businesses. The SMB Shop Small Storefront, found within Amazon.ca, is a dedicated space where products and specific offers are themed. Its objective is simple: to provide Canadian SMBs with a tailored portion of the marketplace to help support them in their efforts to meet the needs of their customers and to promote the importance of ‘shopping small’. 

Aja Horsley

One such entrepreneur who’s benefitted from the Amazon.ca Shop Small Storefront is Calgary’s Aja Horsley, CEO and Queen Bee at Drizzle Honey Products – a purveyor of all-natural, raw, bee-friendly honey. The 100 percent Canadian-made product, produced with the support of local farmers, recently received an investment from Dragon’s Den investor Arlene Dickinson, allowing Horsley and her small team to execute on its vision to promote the responsible manufacturing of honey and the positive changes that are required within the food production industry. However, she’s quick to point out the fact that much of that execution would not be possible if it were not for the Amazon.ca marketplace, which she launched her product on in April of last year.

“When you’re selling on Amazon, there are a lot of eyes on your product,” she says. “Everybody shops on Amazon today, even some people who may not have shopped online prior to the pandemic. We were fortunate in that we had already been building our storefront before COVID hit and were able to launch at a good time, exposing our brand to a huge population of customers that would not have otherwise been aware of Drizzle Honey. We leverage Amazon’s fulfillment expertise, which removes a lot of the shipping and delivery challenges for us. But, from a business and revenue perspective, the biggest benefit for us has been the marketing capabilities that the platform provides. Our sales have been great and continue to ramp up on both Amazon.ca and .com. And I also believe that our presence on Amazon is also helping to drive traffic to the Drizzle Honey website. People often start their shopping journey on Amazon but end up purchasing on our site. It’s a really big benefit and result of the exposure that we receive.”

Global expansion

The Cocktail Box Co
Image: The Cocktail Box Co

Another Canadian small business owner finding a significant amount of success by virtue of its partnership with Amazon is Chris Yee, Co-Founder of Brew Your Bucha and The Cocktail Box Co. The company’s, similar in vision, are dedicated to providing everything someone needs in order to brew kombucha and to make premium cocktails like a pro in the comfort of their home. The companies, each founded in 2016, are available on Amazon’s marketplaces in Canada, the United States, the United Kingdom and Singapore, and have performed extremely well. Yee echoes Horsley’s sentiments concerning the exposure that the brands have received as a result of selling on Amazon’s marketplace, adding that it serves as the perfect platform on which to launch prospective products.

Image: Christopher Yee

“For our businesses, Amazon has always been an amazing testing ground to introduce new products to the marketplace and get them in front of as many people as possible,” he says. “It really helps us generate the real-time feedback that we need to continue developing our products and offering our customers what they’re looking for. In addition, to help support what we’re doing as a business, the overall logistics benefits offered by Amazon are immense. When my business partner and I first started, we were preparing and shipping packages and performing customer service all from our apartment. It’s all very time-consuming, almost like running a separate business. Amazon has been able to take that portion of the work off of our plate. We use them not only from a fulfillment and warehousing perspective, but they provide all of the customer service elements related to shopping as well. The services they make available takes pressure and legwork off of the backend, allowing us to deliver product on a timely basis and focus on the other aspects of our business.”

Partnering for success

Considering the variety of services and offering that Amazon provides for its merchant partners, it’s no wonder that many of them are enjoying the success that they’re experiencing with the ecommerce leader. The combination of flexibility within its plans and the full scope of support that it offers business owners across the country is not only helping SMBs withstand the adversity of these challenging times, but to continue growing in spite of them as well. And, according to Gable, Amazon doesn’t have any intentions to divert its focus from cultivating and nurturing partnerships with the country’s entrepreneurs any time soon.

“Amazon is a company that is truly customer-obsessed and focused on innovation. We are incredibly proud of the partnerships that we’ve built with sellers and look forward to continuing to help small and medium-sized businesses in the country grow and extend their reach even further. It’ll be really interesting, as we approach a post-pandemic world when stores start to reopen, to see how the Canadian consumer continues to adapt their behaviour. And, as we enter that new normal, whatever it might be, Amazon will be maintaining its commitment to small and medium-sized businesses and continuing to develop ways by which we can help support Canadian entrepreneurs and ensure that their businesses have the opportunity to thrive going forward.”  

Article Author

Sean Tarry
Sean Tarry is an experienced writer who leverages his unique storytelling abilities to bring retail industry news and analysis to life. With 25 years of learning, including over a decade as Editor-In-Chief of Canadian Retailer magazine, he’s equipped with a deep understanding of the unique world of retail and the issues, trends, and innovators that continue to influence its evolution and shape its landscape.

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