What Does It Take To Sell on Amazon? Key Findings From Jungle Scout’s 2023 State of the Amazon Seller Report
Jungle Scout released its 2023 State of the Amazon Seller Report revealing key trends, challenges and opportunities in ecommerce.
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More than 2,000 Amazon sellers, ranging from entrepreneurs to major brands, were surveyed about their Amazon business and plans for 2023.
Let’s take a look at some key insights from the report:
Despite inflation resulting in rising operational costs, 89% of Amazon sellers said they were profitable, up four percentage points from last when 85% reported they ran a successful business.
Over one-third (37%) of Amazon sellers reported that their profits even increased in 2022.
But while Amazon continues to drive significant sales for these entrepreneurs and major brands, 61% of Amazon sellers are already diversified on at least one other ecommerce platform, leading with eBay, Shopify, and the Walmart.com Marketplace.
Yet, sales channel expansion seems to be at the top of the list for many Amazon sellers with 52% reporting they plan to expand to additional platforms this year.
That is more than double of sellers that looked at expansion last year when only 25% were considering sales channel diversification.
International sales and expansion are further becoming important for Amazon sellers. 45% of Amazon sellers operating on the U.S. marketplace are selling on at least one other international Amazon marketplace.
And half (50%) of global Amazon sellers are exploring further international expansion, with Brazil, Turkey, and Japan being the top three growth markets for global Amazon sellers.
This metric is also up significantly over last year when only 25% of Amazon sellers were considering more international expansion.
As much as Amazon has been growing its digital advertising business enabling sellers to drive sales to their listings on the Amazon platform, ads on TikTok, YouTube and Snapchat are trending up for bringing traffic to their product pages, while advertising spent on Facebook and Instagram is slowing.
Still, Facebook (67%) and Instagram (49%) reign supreme in overall social media advertising over the other platforms. However, sellers are shifting their advertising spent with YouTube up 86%, TikTok up 65%, and Snapchat up 41%, year-over-year (YoY),
Overall, social media advertising continues to grow as a significant source of ad spending, with 41% of respondents saying they used social media platforms last year, up 15% YoY.
It seems everybody is an influencer now or strives to be one. It used to be that choosing an influencer with millions of followers was the most popular strategy. However, niche influencers may bring a greater Return on Investment (ROI) to online businesses and brands.
While deciding on the best influencer strategy is more difficult today, nearly half of Amazon sellers (49%) plan to engage with influencers to promote their products this year.
These findings on marketing clearly suggest that to be successful on Amazon, sellers must have a diversified promotional strategy.
The weird economy we find ourselves in still concerns Amazon sellers. And according to the Jungle Scout report, sellers continue to battle fluctuating shipping, storage, and material or supplier costs.
While fewer sellers report having lost sales due to supply chain disruptions last year (46% in 2022 vs. 74% in 2021), 35% of Amazon sellers are concerned about how inflation will impact their business in 2023.
Amazon claimed that over the 2022 holiday season, nearly half a billion products were sold by U.S. small business Amazon sellers, and third-party sellers globally were responsible for nearly 60% of all units sold on the platform.
In many ways, this was a surprisingly good season, considering the global inflationary economic environment. But will this continue in 2023?
Amazon Sellers Need To Be Nimble
This report underscores that even on a mature marketplace platform like Amazon, sellers have to be nimble and identify trends that drive sales.
“Amazon is constantly evolving, and ecommerce is constantly optimizing. Still, Amazon sellers continue to prove that they know how to pivot in 2023,” said Mike Scheschuk, President of Small & Medium Business at Jungle Scout.
“This year, we expect to see Amazon sellers exploring new strategies to help them stay ahead of the curve, including expanding into international markets, bringing their brand to new ecommerce platforms like Shopify or Walmart, or promoting their brand on TikTok to drive awareness and sales.”
In short, listing it and waiting for the cash to roll in is not a viable business strategy to be successful on Amazon today. Forget those YouTube videos selling easy-to-launch Amazon businesses and brands with minimal effort and investment.
Starting on one country marketplace, with Amazon.com (U.S.) being the largest marketplace, and supporting the launch of your products or brand with a diverse marketing strategy is a major factor in achieving success.
Your competitors on Amazon are doing just that, and this is why fully understanding how the Amazon opportunity can work for you requires good insights to work with.
The free 2023 Jungle Scout State of the Amazon Seller Report is full of great insights that can help new entrepreneurs and current Amazon sellers understand the marketplace better.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.