By If you are considering selling on Amazon in 2021, or you’re already in the process of doing so and you’re wondering if it’s the right choice for you, this blog may clear some things up. Selling on Amazon can be seen as a daunting task, but it won’t look that way if you have done your research and are informed about the process. In this blog, I’ll take you through some facts, and we can see if selling on Amazon in 2021 is really right for you.
Now let’s dive in.
Quick History of E-Commerce of Recent Years
In 2014 e-commerce sales reached 1.3 trillion, a number most could not have ever fathomed. Jump forward six years to 2020, and we find that the e-commerce sales total has more than tripled that 1.3 trillion-dollar number, coming in at 4.2 trillion dollars. In 2020 47% of all US e-commerce sales were on Amazon.
Those are some pretty massive numbers, but what’s even more impressive is that these sales numbers are forecasted to continue growing at an exponential rate. E-commerce sales are expected to reach 6.5 trillion dollars by 2023. To put 6.5 trillion dollars in perspective, only China and the US have a higher dollar amount in GDP. No other singular country in the world has a GDP higher than 6.5 trillion dollars.
So take a guess as to who’s going to capture 50% of all US e-commerce sales in 2021.
Yep, you got it, Amazon. This means for every two e-commerce purchases in the US, one of those purchases will be from Amazon. This market capture is something we’ll want to consider when deciding whether or not selling on Amazon in 2021 will be a good idea or not.
Covid-19’s Impact on E-commerce Sales
Covid’s impact on the entire world has changed how many of us now shop. Instead of going to Walmart to get diapers, you went online and ordered them to the house. Instead of going to the pet store to buy your dog its food, you ordered it online. Instead of going out and getting groceries, you ordered through Amazon.
People who were already ordering these things online continued to do so even more, but that’s not what caused such a surge in e-commerce sales. It was the massive influx of people who had never online shopped until the pandemic hit. People had to learn fast, as, at the height of the pandemic, many weren’t allowed to or too scared to go out.
The pandemic changed the flow of business as we know it. People had no other option but to shop online. Business owners who had established their business online could survive, if not flourish, but unfortunately, we saw tons of brick-and-mortar stores close.
Going forward, a lot of people have found that shopping online for many of their essentials is simply easier than going out to buy them. With all of these new shoppers entering the e-commerce space, it is not hard to see why there are projections for that 6.5 trillion dollar sales mark for e-commerce in 2023.
Again this is another point to consider. Although you may think the market is already saturated with sellers, we’ve already seen a massive increase in buyers.
Online E-commerce Options
Let’s quickly clarify something. There are two ways of selling your products online. Selling on Amazon is not the same as selling on your own website.
1.Your Own Website
Pros: You control exactly what is on the site. Most websites will use a plug-in like BigCommerce, WooCommerce, or Shopify. They act as your store liaison in the online purchasing process.
Cons: You’re liable for everything associated with selling online. That includes packaging, shipping, and having infrastructure set up to efficiently deliver the products to the consumer. You’re also the person solely responsible for marketing your site to potential customers.
I don’t mean to make it sound like selling directly from your website is a bad idea because it works out really well for many people. Again, you have to weigh out the pros and cons.
2.Marketplaces
Marketplaces are sites like Amazon, eBay, and now even Walmart.com. Think of these places like farmers’ markets. There will be many people at the market every Sunday; you don’t have to convince people to be there. If good word of mouth gets around the farmers’ market, you may find a line up at your stall.
Maybe that’s not the best analogy, but basically, you get exposure and lots of potential customers just by being somewhere (and in this case, it’d be being on Amazon).
Pros: A network of customers are regularly on the sites and maybe recommended your product via the marketplace site without you having to spend any money on customer acquisition. The payment process and the shipping and handling process are handled by the site, not you. These sites have customer service departments so they can handle returns and complaints.
Cons: You are now competing with everyone on that marketplace. You have to figure out a way to differentiate yourself from the competition. Unless someone has specifically searched for your product by name, they will see many similar products on the same page. You need yours to pop out and say, “look at me!”. You also have to be very conscious of reviews as that can determine if someone will even look at your product; first impressions are everything.
Now that you understand the most common ways of selling your product online let’s look at what Amazon specifically can do for you.
How Amazon Helps Sellers
As you may have guessed, Amazon has an immensely efficient worldwide infrastructure. This is how they have grown to their size and why they will be virtually capturing 50% of the US’s e-commerce market in 2021. So let’s look at some of the infrastructures in place.
• When you start selling on Amazon, you are instantly exposed to a network of customers. People trust Amazon, so just being on there can add some credibility to your product and brand.
• They package and deliver the product. You can send your product directly from your manufacturer to Amazon, and they will handle all packaging and delivery.
• They handle payment and offer customer support. You won’t have to worry about refunds or dealing with angry customers over the phone.
• Amazon even has an advertising platform; you can set up sponsored ads to drive even more traffic to your store.
• Selling on Amazon also minimizes the risk of starting a business. Back in the day there were extremely high barriers to entry and a high amount of risk involved in starting a business. Amazon has knocked down that barrier to entry and made selling online accessible for many more with a lower initial investment and less risk.
Conclusion
Let’s finally answer the question ‘Is it a good idea to start selling on Amazon in 2021?’ In my opinion, the answer would be yes. If you are looking to start selling your product online in 2021, I would absolutely have my products on Amazon.
As we talked about before, Amazon has just really nailed down and streamlined the online shopping experience for buyers and sellers. They have made it so that you, the seller, have all of the tools you could possibly need to be successful.
So yes, I think you should be selling on Amazon. The tools are there for you to utilize. Of course, your success will really come down to how good your product is and how committed you are to its success.
Find your competitive advantage, become as knowledgeable as you can, and in 2021, your business may just be the next best thing. Amazon is only too saturated and too competitive if you don’t know what you’re doing, so stay informed.
If you would like to stay up to date on other pieces for Amazon sellers that may help you on your selling journey, feel free to connect with me on LinkedIn or find me on Twitter @nolanswriting.
