Amazon has become a force to be reckoned with in the ecommerce world. Business is booming for third-party sellers on Amazon marketplace as they make up about 40 percent of Amazon’s unit sales. Amazon sellers range in size, with some enterprise level mega-sellers generating millions in Amazon sales every year.
A recent survey by Web Retailer and Feedvisor provides insights into preferences, challenges, and tools used by Amazon sellers.
Most Amazon sellers sell through multiple sales channels with at least 43 percent selling on one other channel besides Amazon. About 25 percent sell on 2-3 channels and 7 percent sell in over three channels. Among the $1 million+ sellers (larger sellers), 86 percent are multi-channel sellers and they sell through an even greater number of channels.
After Amazon, eBay is the second most popular channel for Amazon sellers. A quarter of the sellers have their own stores with Shopify and Magento being their platforms of choice. Sellers with $1 million+ in revenues generally prefer Magento over Shopify. Other ecommerce platforms used by sellers include Bigcommerce, WooCommerce, and Volusion.
Larger sellers generally sell electronics and home and kitchen products. Nearly one-third of sellers mark up prices by 25-50 percent and one-third of sellers have mark ups in the 10-25 percent range. In general, larger sellers have lower price mark ups with about half of them marking up prices in the 10-25 percent range.
Larger sellers source products based more on what is popular and are less focused on finding cheaper products. They stay current on what competitors are offering. They also generate sourcing ideas from suppliers and tradeshows.
Amazon sellers use a number of Amazon services for logistics, inventory, and listing management. Part of the strategy that successful sellers use to grow their business is Fulfillment by Amazon (FBA). Nearly 80 percent of Amazon sellers use some or all of Amazon’s FBA logistic services. FBA is quite popular with sellers because it saves time, cost, and headache that go with fulfilling orders on their own. Using FBA also gives sellers a competitive advantage on Amazon marketplace by providing greater product visibility through the Buy Box and gaining access to millions of Prime customers as these products are eligible for Prime free shipping. Due to the operational ease, FBA sellers are generally the smaller sellers.
Nearly 90 percent of the large, $1 million+ sellers use some software to manage their business. They use softwares that handle a wide range of functions: inventory management, order management, shipping, listing, repricing, product research, feedback, reporting and analytics. About 10 percent of the large sellers do not use any software. Inventory management is the most used software by sellers of all sizes. Among the larger sellers, about 60 percent of them use repricing software.
For those currently not using any software, many say they would like to use some kind of inventory management software within the next 12 months. The larger sellers indicated that they want to use software to research products. Currently, large sellers prefer to develop their inventory management and listing softwares in-house. That may change as more sellers discover that it would make better business sense to buy a powerful and agile SAAS software that can manage any or all of their back-end operations with very little start-up cost to get them up and running in a very short time.
One of the benefits of having a robust ecommerce management software is that it alleviates one of the biggest fears that all sellers have -- being banned from selling on Amazon marketplace. Amazon takes away selling privileges, either temporarily or permanently, if sellers do not comply with certain stipulations. A sophisticated multi-channel ecommerce software is built with channel-specific requirements to minimize mistakes that would lead to bans as well as negative customer reviews, which is a big concern for smaller sellers whose businesses can be significantly impacted by negative reviews.
Selling on Amazon marketplace is fiercely competitive. Are you using the right tools to manage Amazon’s evolving ecosystem to succeed?