Let’s debunk some myths.
Online there is a lot of speculation that selling on Amazon in 2020 will ultimately lead to failure. A big reason behind this is the idea that the Amazon platform is too saturated with sellers, therefore there is too much competition to successfully launch a product.
While it is true that the Amazon platform is growing at a crazy rate, the implications of this growth does not necessarily mean that it is too late to jump into the Amazon FBA game. Actually, this may mean the exact opposite. The growing user base of Amazon.com can be used to directly find buyers for your products.
So many people are looking to start online businesses these days and reinvent the wheel. Instead, the idea of getting into Amazon FBA is getting a slice of and already huge pie. You aren't digging out your own unique path, but you are looking to latch yourself onto a horse that is already winning.
People can sit here and argue over whether it is worth it or not to start, but they can't argue against facts. Nine University founders, Kale and Taylor dive into some hard facts about selling on Amazon found on SellerLabs.com.
Can’t argue with facts!
Let's take a look at some facts from sellerlabs.com.
1. As of 2017, there were more than 300 million active accounts on Amazon
2. As of 2017, there were more than 100 million Amazon Prime subscribers.
3. As of 2017, non-members spend $600/year.
4. Prime members spend more than twice as much (over $1200).
Looking at these facts, it's obvious that an insane amount of people use Amazon. I'm sure this doesn't come as a surprise to anybody. Some people may choose to look at this data and see this as a statement that says “too much competition.” Other people may look at this and think to themselves “I want to get a piece of this!” Realistically, every single business venture is going to have competition. You can't escape that. Finding demand is one of the biggest obstacles to overcome when starting a small business. Based on these numbers, it is clear that the demand on Amazon is there.
Still not convinced? Let's take a look at some more facts.
5. 145.2 million mobile users accessed Amazon in JUST March 2019.
6. 89% of buyers admit that they are more likely to buy on Amazon than other ecommerce sites.
7. Amazon has a total of over 119,928,851 products as of April 2019.
8. Amazon has a total of over 1,761,784 sellers as of April 2019.
As you can see, the business being done on Amazon just keeps growing and shows no sign of slowing down. The number of products on Amazon is over 100 million while the number of sellers on Amazon is under 2 million. This averages out to around 70 products per seller. Obviously this breakdown is very general, it does show how much room there is for more sellers to come in and start selling these same products.
Do you still think that it's too late? Do you still think that there is no opportunity to make money on Amazon? You think that the 2 million Amazon sellers as of April 2019 think the same? Probably not.
In case you need some more convincing so, you're in luck! there is even more astounding facts to further this case. Pay close attention to the last one.
9. 100 million purchases on Prime Day in 2018.
10. On average, small/medium sized businesses sell more than 4000 items per minute.
11. 23% of online shoppers go to Amazon first for inspiration when they don’t have a specific product in mind. (just looking to spend money!)
Did you see that? The last fact… Not only are people coming to Amazon to look for products that they need. People are actually coming to Amazon to find things to spend money on! So 23% of people are on Amazon looking for an excuse to spend their money. That is simply amazing. People are literally looking to give sellers their money. And people still think that there's no room to succeed on Amazon? Preposterous!
To say that there is no competition is simply false, but to say that there is no opportunity to succeed anymore is flat-out wrong. There are so many people out there looking to start small businesses that have so much trouble finding a customer base. They launch a product or a service, invest a bunch of time and money, and then come to realize that they have no means to find customers. These facts should make it obvious to you that a great place to find customers is through Amazon.
But don’t you want to see some more facts? Not to beat a dead horse but… c’mon look at these numbers now.
12. Each month 197 Million visitors (more than the entire Russian population).
13. In 2018 Amazon’s share of US ecommerce market hit 49% which is 5% of ALL retail in the US… more than Amazon’s top 3 competitors combined (apple, walmart, eBay).
You see that? Amazon takes up almost half of the entire e-commerce market share! How do you not want to get a slice of that pie? I know a lot of e-commerce business owners preach about Shopify and starting your own store, but in the beginning the biggest obstacle is finding customers. The Amazon platform basically owns half of all people that shop online.
If you are a street performer, do you want to go perform in Central Park in New York City? Or do you want to perform in a custodian’s closet? Sure a custodian's closet has very little competition but are you going to reach anyone?
When it comes to selling things online, it doesn't really matter how many people reject you. It matters how many people convert. It may sound great to be able to say that your product has a 50% conversion rate, but if only two people saw your product that means you only had 1 sale which is not too great. Maybe instead you have a 1% conversion rate which may seem a lot worse, but what if your products reached 100, 000 customers? That means 1,000 sales! The average conversion rate on Amazon is 9.47% which is astronomical for e-commerce. So imagine the kinds of numbers you can do.
Why all the nay-sayers?
So you may almost be convinced but are wondering to yourself why there are so many negative stories about selling on Amazon. Well think about it. There are almost 2 million sellers, as we said before. Do you think every single seller does their fair share a product research in order to enter the market in a knowledgeable position? You think they truly understand what they're getting into before they start? Of course not!
In every single type of business there are always going to be people that blame their lack of preparation and their failure on the game itself. That's just the way it goes. there is always a big chance that you will fail in any sort of business venture. But if you want to enter something like Amazon FBA then it is so easy to get access to resources that can help you do it in the right way. It’s the people that don't believe in investing into themselves that fail and don't understand why.