Amazon not a ‘money spigot’ for small businesses, expert says

Amazon, which has come under fire recently for its impact on brick-and-mortar retail, revealed on Thursday that more than 1 million small- and medium-sized U.S. businesses sell goods on its website.

While the e-commerce giant offers small businesses a greater market and opportunity to reach new customers, small business expert Susan Solovic warned companies to not expect a sudden influx of cash after listing items for sale on Amazon.com.

“The hurdle here for small businesses is, a lot of them think, ‘I’m on Amazon, I’m turning on the money spigot,’” Solovic told FOX Business’ Liz Claman during an interview on Thursday. “Well it doesn’t quite work that way.”

Companies, Solovic said, need to operate like any other store by promoting the product and letting potential customers know it’s available on Amazon. The more sales they get, the higher they’ll move in Amazon’s rankings.

Business pay a professional fee of $40 per month. If they want to avoid it, they can choose to sell as individuals -- but thereby limit how much they can sell, she said.

“It was brilliant for Amazon to do this,” she said. “A lot of people criticize Amazon for this, but you know, Amazon gives small businesses a greater market and opportunity to reach new customers.”