Since I stopped using Amazon in August 2020, I must admit I can't really say I miss it. Sure, shopping online for a brand new carpet cleaner may take a bit longer now but it's totally worth it (financially and morally). Over the last six months each of my would-have-been-Amazon purchases was made mostly locally and online. And better yet, I was able to actually save money by using promotions or sometimes simply coming across a better deal using seller's own online stores instead going through Amazon.
I decided to give up the convenience of Amazon since I don't agree with a business model where one man is able to quickly accumulate such obscene amounts of money. A visual representation here: https://mkorostoff.github.io/1-pixel-wealth/
The reason I'm writing about Amazon is that as one of many independent small business owners, we see more and more corporations exploit our talents and skills, by constant fee hikes and questionable marketing practices.
If I told you a marketplace I sell my designs on often leaves me (and many other designers, crafters and independent makers) with just over half of the amount you paid for the service, you probably wouldn't believe it. Yet it's true. There is the sale fee, the VAT on sale fee, the mandatory google advertisement fee of 12%, the VAT on the mandatory advertisement fee, the payment processing fee and (yes you guessed right) the VAT on the payment processing fee. (Businesses that make below £85k a year usually pay VAT).
On top of that we pay regular taxes so deduct another 20-23% from that amount which leaves us with 40% (Here is a simple example to illustrate this concept: you pay $100, we get $40). This is one of the reasons you probably should't buy a logo design that costs $10.
Running your own online shop instead of selling solely via a marketplace helps a bit. As an example a client who buys directly from this shop will pay around 20% less than if they ordered my design via a marketplace. I'm able to offer a discount and still make 5%-10% more than if selling elsewhere so it's a win-win situation.
I'm often asked how much money one can make doing what I do and the honest question is: it's a lot less than you think. A better question would be: how much money does a corporation/marketplace make by profiting from online sellers like me and you? Billions.
I will always do my best to make my services as affordable as possible. Some people will tell me my prices are extortionate, some will say I should be charging more. But running a small independent business is not just about making money.
In 2019 I ran a "Pay it forward" scheme where struggling businesses could get me to do a basic logo for just $0.20. It was highly successful and very rewarding however certain marketplace regulations have successfully prevented me from continuing with the scheme. Obviously the issue wasn't me not making any money from my charitable products, but the marketplace not profiting enough.
The best way we can fight corporation greed? There probably isn't one straightforward answer. I guess sticking together, being open about our costs, educating clients and each other as much as possible helps.
I realise after reading this article you may not necessary declare a war on Silicon Valley and become the next Mark Boyle or Jaron Lanier. However I hope it inspired you to shop more local, more ethical and support small, independent businesses as much as possible. Don't be another Jeff Bezos, be Dan Price.
Since my company started a $70k min wage in 2015:— Dan Price (@DanPriceSeattle) August 23, 2020
*Our business tripled
*Staff who own homes grew 10x
*401(k) contributions doubled
*70% of employees paid off debt
*Staff having kids soared 10x
*Turnover dropped in half
*76% of staff are engaged at work, 2x the national average