Amazon Studies and Statistics for Sellers – All Relevant Developments of Recent Years
Online shopping has become an integral part of the daily lives of many people over the past two years. This is evidenced by Amazon studies and statistics created after 2020, which is also reflected in the success of companies like Amazon, OTTO, eBay, Walmart, etc. However, Amazon stands out as the clear winner in direct comparison with other e-commerce giants. In this blog post, we want to take a closer look at the development of Amazon, of course also from the perspective of Amazon sellers. Because such rapid growth – especially in such a short time – typically cannot have only positive aspects.
Customer Orientation Prevails – The Rise of Amazon
There are numerous Amazon studies and articles that discuss the company’s rise from a garage bookstore to the largest marketplace in the world, and all studies come to the same conclusion: Amazon is growing unstoppable.
The exponential growth of the online giant is particularly evident in the growth curve of the last 10 years. In 2010, the retailer generated revenue of $34.2 billion. Ten years later (2020), it was more than ten times that amount, with $386.1 billion.
One of the reasons for this is the company’s management, which focuses on customer orientation and reinvesting profits back into the business to promote growth.
Among other factors, these two elements have significantly increased revenue at Amazon over the past six years, as the statistics show. In particular, the year 2020 – fueled by the global e-commerce boom due to the pandemic – was very lucrative for Amazon. Revenue increased by 33% compared to the previous year. Germany was one of the most successful markets for Amazon, with $29.6 billion in revenue.
In 2010, Amazon generated $34.2 billion in revenue. Ten years later (2020), it was more than ten times that amount, with $386.1 billion.
Such a trend cannot continue indefinitely, of course. According to Marketplace Pulse, a company that specializes in analyzing data from the e-commerce sector, the curve (at least in the U.S. market) has stabilized, and now only “regular” growth is being observed.
More Customers = More Competition
But what does this growth mean for marketplace sellers? Generally, it is a good sign when the platform on which you sell products generates more revenue than ever before. Sellers directly benefit from the increase in customers.
There are now 1.9 million active Amazon sellers. 240,000 sell on Amazon.de.
It also means that individual sellers must compete against much more competition. Worldwide, there are now about 9.7 million Amazon sellers, with 1.9 million actively selling on the platform and 240,000 based in Germany. And this is just the direct competition on Amazon. The e-commerce boom has naturally extended to other platforms as well. While these may not be as successful as the market leader, they offer customers different advantages.
For example, the platform Etsy attracts its customers with a specialization in handmade, creative products. This tactic has proven successful, allowing the company to increase its revenue from $818 million (2019) to $1.72 billion (2020).
How do you stand out against such strong competition?
Selling on Amazon has never been easy and has actually become more difficult in the last two years due to high competition – according to Oberlo, 283,000 new sellers joined in the first quarter of 2021.
One way to stand out in such a competitive marketplace is to use intelligent software that allows for the automation of tedious (but necessary) processes. Fun fact: Amazon does the same at the end of the day, as this graphic shows us.
Price Optimization
The final price is the most important metric for winning the Buy Box and thus achieving very high visibility for your products on the product detail page. However, the final price of products on Amazon is constantly changing, making manual adjustments nearly impossible.
The repricer from SELLERLOGIC not only ensures a high Buy Box share but also helps you sell your products at the highest possible price. More information can be found here.
Refund Claims from FBA Errors
Although Amazon now employs more robots than human employees, people are still the decision-makers in the warehouses. And people make mistakes. This is not a problem. It is simply unacceptable for you as a seller to have to pay for the mistakes that occur in the warehouse with your products.
SELLERLOGIC’s Lost & Found software identifies FBA errors up to 18 months in the past. These errors are then processed by our Customer Success Team, who will work with you to contact Amazon and enforce your refund claim. More information can be found here.
Disrupted Supply Chains
What had already been noticeable throughout the year became particularly evident during Christmas 2021: the international supply chains could not keep up with the high demand, resulting in very high prices and extremely slow logistics. In addition to the aforementioned imbalance, other factors such as labor shortages, unfavorable navigation maneuvers in the Suez Canal, port closures, and typhoons played a significant role. This was especially noticeable on the routes from Asia to Europe and/or America, leading to increased prices and slower logistics.
In the last 18 months, shipping prices from Asia to Europe increased by 700 percent. In the USA, they rose by 900 percent last year.
For the route from Asia to Europe, prices currently stand at $16,000 per 40-foot container (as of January 2022). Eighteen months ago, the same container cost around $2,000. For the logistics industry and shipping companies, this is, of course, a dream come true – at least financially. However, as a business owner, one must first be able to afford these high prices.
The same situation occurred in the USA; in 2021, shipping prices for goods from China increased fivefold. Compared to pre-pandemic prices, the rates are ten times higher. Freight rates for containers rose from $1,500 (early 2020) to over $20,000 (September 2021). By the end of 2021, prices decreased again and are now at $15,000.
Producing in Europe?
The question that sellers have been asking themselves for some time, even before the pandemic, has become more relevant than ever due to these supply chain issues: Is it worth producing in Europe?
The manufacturing costs in Europe are much higher than in Asia; however, shipping costs are significantly lower, and the quality is usually higher. Another advantage of “local” production is that a trip to a European country (e.g., to inspect the goods or meet the manufacturers in person) is cheaper and less time-consuming than a trip to Asia. Furthermore, producing in Europe is also more sustainable from an ecological perspective due to the shorter delivery routes – another factor that can be converted into more sales with the right marketing.
And what are the vendors doing?
This question is answered by a recent Amazon study by Pattern and Profitero, the EMEA Amazon Vendor Survey, in which 56 brands were surveyed about the challenges and opportunities in Europe and the Middle East.
It is noteworthy that many brands sell through multiple channels, for example, through other e-commerce platforms (48.2 percent). Among these platforms, eBay is the most popular (39.3 percent), but Cdiscount is also performing well (25.2 percent).
Also interesting is the level of satisfaction among vendors with the online giant. Less than half (45 percent) of all respondents indicated that their relationship with Amazon is “somewhat positive.” 25 percent reported a neutral relationship, and 25 percent described their relationship as “somewhat negative.”
The reasons for this modest result include issues with price erosion (59 percent), expensive and complicated logistics on Amazon’s part (85.2 percent), insufficient space in warehouses (66.1 percent), and disruptions in the supply chain (50 percent).
It is likely that in the coming years, some vendors will consider adopting a hybrid strategy and selling both as sellers and as vendors.
Amazon Studies and Statistics – Conclusion
As an e-commerce giant, Amazon has gained many customers in recent years. As a seller, you directly benefit from the continuously growing customer base. However, this rapid growth also means that you must compete against much more competition. Many Amazon sellers rely on software in such cases.
The bottlenecks in the supply chains (especially from Asia to the West) have also been noticeable since the beginning of the pandemic, but they reached a peak at the end of 2021 that has not yet subsided, at least in Europe. A sustainable alternative that is becoming increasingly attractive for German e-commerce sellers is to have products manufactured locally.
Amazon vendors are currently also facing similar problems, notably the complicated and expensive logistics of Amazon, lack of warehouse space, supply chain bottlenecks, and price erosion.
Image credits in the order of the images: Fig. 1, 2, 3 & 6 @ marketplacepulse.com / Fig. 4 @ cbinsights.com / Fig. 5 @ fbx.freightos.com / Fig. 7 @ pattern.com; profitero.com
