Brands selling on Amazon cite new customer acquisition and increased sales volume as the top benefits of using the retail behemoth’s platform. And, with a majority of retailers making all their products that are available on their own website also available on Amazon, competition on the platform is heating up. A recent report [download page] from Jungle Scout looks at how sellers are planning to grow their businesses on Amazon this year.
First off, what does selling on Amazon look like? Among this survey’s respondent sample, more than two-fifths are either self-employed (18%) or exclusively earn income through their Amazon business (26%). The majority of sellers have a private label business model (60%), while about one-quarter (26%) have a wholesale business model.
For SMB sellers on Amazon, the top three product categories are Home & Kitchen (32%), Beauty & Personal Care (23%) and Toys & Games (20%). Per the report, SMB sellers on Amazon are expected to see higher profit margins compared to other small businesses, with two-thirds earning profit margins higher than 10%.
In order to grow their Amazon businesses this year, sellers cite several tactics. Most commonly, sellers intend to launch new products (unrelated to current products or brands; 45%), optimize current product listings (43%), and expand existing brand lines with new products (43%). Others plan to get more ratings and reviews for products (39%), grow a brand through social media, influencer marketing or other off-Amazon marketing efforts (39%), and try new marketing tactics (38%).
While Amazon sellers are making efforts to grow their business on the retail platform, they are aware that the competition for sales goes beyond other sellers on Amazon. For many, Walmart also poses a threat, with close to half (45%) of respondents believing that Walmart.com will compete strongly with Amazon this year, and more than one-third (35%) expressing concern that this competition will impact their Amazon business.
The full report can be found here.
About the Data: Findings are based on a survey of 3,500 entrepreneurs, brands and businesses of all sizes that use the global retail platform of Amazon, including prospective and former sellers and respondents representing agencies that offer services to Amazon sellers and their businesses.