Top Choice of Amazon Sellers Looking to Expand

Nearly half of merchants selling goods on said in a recent survey that the marketplace makes up 80% or more of their sales, while home and kitchen goods was the most popular category, reported by 18% of respondents.

The highest number of respondents to the January survey by Feedvisor – 29% – said they planned to expand their sales to in 2017, an indication of growing interest in the channel. However the survey also found that just 9% of those currently selling on Amazon are also using, compared to 65% who said they also sell on eBay.

Ohad Hagai, vice president of marketing for Feedvisor, said Walmart’s investments in ecommerce properties, plus the fact that participation in its marketplace is no longer by invitation only, have made it a more popular choice for merchants.

“Amazon is leading by far, but Walmart is the one that from an infrastructure standpoint is most likely to compete if anyone can,” Hagai said. “They realized the potential of their marketplace, which is why they’ve put so much money into it. When it was invite only they were just going after the big sellers, and now they’re opening it up. With the requirements now less strict, more sellers are going there.”

[Interested in this topic? Attend our free webinar, “A Marketplace Guide to 2017 Holiday Success” on Thursday, June 22 at 2 p.m. EDT]

Another interesting finding from the survey was the fact that nearly all Amazon businesses run on a skeleton crew. Feedvisor found that 84% of Amazon sellers have just one to five employees. This is not surprising as many of them use Fulfillment by Amazon (FBA). Only 2% of respondents reported they had more than 50 employees.

The biggest concern among sellers, according to the survey, was Amazon taking away their privileges, cited by 52% of respondents. This was followed by high fees (50%) and competition from Amazon itself (45%).

On the last point, Hagai said he had not seen any hard evidence that Amazon – as is often rumored – used its algorithms to identify top-selling items and offer them itself at a discount, undercutting the merchant. “I know some people say they’ve experienced that, but I’ve never seen proof of it,” he said.

Other findings from the survey:

  • Nearly one-third of respondents sell at least some private label items, and 18% sell private label items exclusively. “More sellers are figuring, why compete on price with other sellers offering the same thing,” Hagai said. “They go out and find a product no one else has, and not one can compete. But that guy has different challenges, especially getting traffic to his page.”
  • Using Amazon Sponsored Products was the top promotion method used according to the survey, identified by 60% of respondents, followed by social media (42%) and product listings (36%).
  • Nearly three-fourths of sellers (72%) earn less than $250,000 per year on Amazon. Only 2% see above $6 million per year in revenue.
  • The South and the West each have 33% of Amazon sellers, followed by 18% in the Northeast and 15% in the Midwest.
  • More than half of sellers (58%) have been using Amazon for less than two years.

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