As the e-commerce platform with the highest market penetration rate and fastest growth rate, Amazon provides very rich customer resources and sufficient room for growth for third-party sellers. At the same time, however, sellers are also facing extremely fierce market competition.
To stand out from the fierce competition, sellers must not only understand the development direction of the Amazon platform itself, but also keep track of the specific performance of competitors.
This article will use more than 1,200 Amazon professional sellers’ operating data to help sellers understand their own competition, competitors’ performance, market trends and the development direction and existing “pain points” of the Amazon platform from a more macro perspective. The development strategy to achieve business upgrades and sales breakthroughs.
Sellers expand team size
With the increasing demand for business distribution and the increase in sales thresholds, Amazon Big Sales is realizing that they need to hire more staff to follow up the business. In 2017, 84% of Amazon’s sellers were between 1 and 5 employees. In 2018, this ratio dropped by 10% to 74%, while the number of sellers with 50 or more employees increased by 5%.
Amazon sellers in various states of the United States, but sellers in some areas are relatively concentrated
California has the largest number of Amazon sellers, 13% of respondents in this survey come from the state, followed by Florida, New York, Texas, and New Jersey. Of course Amazon sellers are not limited to these States and Amazon states have Amazon sellers. In addition, nearly one-fifth of Amazon sellers surveyed are from outside the United States, which also reveals the positioning of the Amazon global platform.
The distribution of Amazon sellers in US states:
Successful sellers “hearted” the global market
Nearly 37% of the sellers surveyed have expanded to other countries. Another 26% are planning to expand their business to countries outside the United States in 2018. A large number of e-commerce sellers have put their business scale and reputation on the top list.
Amazon’s dominant position in the e-commerce market continues to improve
In the survey, nearly 50% of the sellers surveyed only sold products on the Amazon e-commerce platform, and e-commerce revenue accounted for 81% to 100% of their sales.
Amazon sales revenue accounted for the percentage of corporate revenue:
Amazon sellers are also selling on other platforms
Of the Amazon sellers surveyed, 52% are also selling on eBay, which is a 13% drop from 65% in 2017; the percentage of sales on Wal-Mart has increased from 17% to 25%.
In addition, the data shows that the proportion of surveyed sellers who own their own websites has dropped from 39% in 2017 to 35%, and more Amazon sellers have begun to abandon self-built stations and focus on Amazon.
Amazon sellers other sales channel usage:
Sellers are willing to try to sell on Walmart.com
With an efficient distribution network and a large and dense physical distribution, Wal-Mart has made remarkable progress since 2017. 36% of the surveyed sellers (only 29% in 2017) indicated that they plan to launch the Wal-Mart platform in 2018. channel. In addition, respondents also plan to expand to eBay, Shopify and other sites, of course, there are sellers intend to build their own website.
Amazon seller plans to expand the platform:
Home and kitchen supplies are most popular with Amazon buyers
According to the survey, household and kitchen items (bedding, bathroom items, furniture, wall decorations, cleaning products, etc.) are among the most popular among the various categories. Nearly one-fifth of the surveyed sellers sell this category of products. The health care and personal care categories, apparel and accessories category ranked second, followed by books and movies, and nearly 9% of the sellers surveyed had sales-related products.
Distribution of sellers by category:
Increased profits attract sellers to Amazon
According to research, Amazon’s “selling team” is rapidly increasing. The percentage of Amazon sellers earning more than 250,000 in 2018 has risen to 40%. In 2017, this proportion was only 28%. Sellers with annual sales of more than US$1 million increased by 9% to 19%, and 3% of Amazon’s sellers’ income exceeded US$10 million, which is higher than 1% in 2017. Although the Amazon platform is constantly changing, the increase in profits is also attracting more sellers.
Amazon sellers’ annual income ratio:
Sellers can achieve greater profit growth through FBA services
According to the division of the survey, sellers with FBA shipments of 60-100% of total shipments are FBA sellers, and sellers with FBA shipments of 0-59% of total shipments are FBM sellers.
The number of FBA sellers is higher than that of FBM sellers in the surveyed sellers whose profit margin is higher than 11%. Of the sellers with a profit margin of 21-30%, 25% are FBM sellers and 30% are FBA sellers. Nearly one-fifth of FBA sellers’ profit margins ranged from 31% to 50%.
FBA seller profit space:
Private brand e-commerce sellers are increasing
At present, Amazon has launched more than 70 private brands, mainly clothing, shoes and jewelry. With the rapid expansion of Amazon, sellers have found that private label brands are very popular with millennial consumers who are concerned about product quality and price. In 2017, 68% of sellers did not establish their own brands. In 2018, this figure dropped to 44%. It can be seen that retailers and brands are winning the favor of millennial consumers by creating their own brands. It is reported that the establishment of own brand is one of the commercial goals that many sellers (38%) will achieve in 2018.
The ratio of income earned by sellers through private brands:
Sellers are reluctant to increase price-constrained product inventory
20% of respondents said that less than 20% of their catalogs are subject to the Minimum Advertised Price, and they are reluctant to increase their inventory. For products with the lowest advertising price, once the seller’s pricing is lower than the lowest price set by the manufacturer, the manufacturer has the right to recover the product sent to the seller.
The proportion of products whose prices are subject to MAP:
SFP delivery plan is an opportunity for Amazon sellers to achieve profitable growth
Currently, Amazon has more than 100 million Prime members. Prime members are twice as likely to purchase online every day as non-Prime members, and sellers are eager to contact this large and high-quality customer base. Currently, one-third of the sellers surveyed use Amazon’s SFP (Seller-Fulfilled Prime) to ship Prime members. The number is expected to increase in 2019 as more and more sellers want to attract more quality customers. .
The percentage of products sold by sellers through SFP:
Direct competition with Amazon
In 2017, Amazon sellers were most worried about their sales rights being withdrawn by Amazon. In 2018, only 28% of Amazon’s sellers had this concern. More sellers (40%) were worried about competing with Amazon. In addition, the seller also has concerns about increased platform fees and storage costs, as well as customer evaluations.
The seller’s primary concern:
Seller’s selection method
The way sellers today research and mine new products varies according to their size. A significant number of interviewed sellers stated that they would look for products that are unique and uncompetitive, which will enable them to obtain a “golden shopping cart” from the outset. More than $2 million in sales of the surveyed sellers will be more specific products in the market more popular, of course, prior to the selection of market trends will be analyzed first, and understand the competitors’ sales. Sales with less than $250,000 sellers will mainly look for cheap products that they think are hot, hot products for specific markets, or products that they think will be hot.
The focus of selection for sellers of different income levels:
Product listing is becoming more and more important
Although more than half of the respondents chose Amazon Sponsored Ads as their primary advertising medium, in 2018 many sellers (38%) were committed to building product listing as their second advertising medium. The interviewed sellers stated that it is more important to create accurate, vivid, and attractive product copy than to promote products on social media.
The promotion method selected by the seller:
According to research, Amazon paid ads are particularly popular with private label sellers. Ninety-two percent of the surveyed sellers stated that 80% of their income comes from private label products, and the sales of the products rely heavily on paid advertising.
Self-owned brand sellers choose promotion methods:
High-selling sellers find investment in Amazon’s “sweetness”
According to the data, 12% of the sellers with annual revenues of more than US$2 million have an annual advertising expenditure of more than US$1 million, an increase of 5% over 2017. High-selling sellers have realized that advertising is a key point in Amazon’s development and learning how to effectively manage marketing campaigns and promotions is very profitable.
In addition, 55% of sellers with annual revenues below $250,000 have less than $1,000 in advertising spend per year. Revenues range from $250,000 to $2 million in sellers, with 3/4 of the annual advertising spending less than $500,000.
Advertising investment status of sellers of all levels:
Sellers use software to succeed on Amazon
In 2018, regardless of whether Amazon is selling or selling, various software is used to improve and improve its own products and services.
It is reported that in 2018, 3/4 of the interviewed high-selling sellers (with annual sales of more than 2 million US dollars) used inventory management software, in addition to the same number of sellers using order management and transportation software. A heavy workload seller is more willing to spend money on software to automate certain businesses.
In addition, the selection software is very popular among sellers of all grades. In particular, sellers with annual sales of more than 250,000 have significantly increased the number of people who use such software compared to 2017, and they are still concerned about rapid conversion. Popular products.
In addition to the selection software, re-rating software is also popular among three-level sellers, especially among sellers earning between $250,000 and $2 million a year, and the number of users has increased by 15% compared to 2017.
The sellers with annual sales of less than 250,000 have more analysis software and review review software, and the number of users has also increased by 27% and 45% respectively.
Software usage by sellers at all levels:
Increasing product catalog is the key to improving profitability
Nearly half of the surveyed sellers stated that selling new products is their main means of providing Amazon’s income. A suitable new product will drive their annual performance, which is why they attach so much importance to the selection. Other sellers also pointed out that optimizing campaigns, understanding the market and their competitors can also help them increase their revenue.
Sellers offer sales strategies:
Participating in webinars is the first choice for sellers to understand industry knowledge
More than half of sellers said that participating in webinars is their first choice for understanding industry knowledge. Through such meetings, sellers can learn a variety of ways to attract customers and effective content marketing strategies.
In addition to the webinar, in 2018 many sellers used blogs and various meetings as a second choice for understanding industry knowledge (Blog and Facebook in 2017), indicating that service providers can use blogs, conferences, and other channels to keep in touch with sellers, of course. The blog needs to pay attention to industry-related updates on news, operations, and dry goods.
Ways for sellers to obtain industry knowledge:
In 2018, although 38% of e-commerce sellers hope to sell on more platforms, this proportion has fallen by 21% compared to 2017. Many sellers expressed the hope that 2018 will be able to focus on Amazon’s sales. In addition, 32% of the sellers surveyed aim to create their own brand, and 30% hope to sell products through Amazon on a global scale. Only 14% of sellers plan to hire more people because most companies prefer to hire temporary workers during peak season.
The 2018 goal of the seller: