The State of the Amazon Seller in 2022

By  //  July 7, 2022

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The 2022 State of Amazon Sellers Study revealed some interesting insights into the strategies used by 3,500 sellers on amazon. The survey was conducted within a diverse demographic of young entrepreneurs to major brands who drive $470 billion in revenue annually through their businesses. This blog post outlines some of the key findings that were uncovered due to this study.

■ Amazon Agencies Supporting Retailers:

According to the report, Amazon agencies are integral to selling successfully on Amazon. The major aspects where Amazon retailers need professional help from experts are as follows:

■ Advertisement Model Setups like PPC and SEO

■ Amazon Account Setup

■ Amazon Listing Management

■ Amazon Product Photography

■ Amazon Product Videography

■ Competitor Analysis

■ Data Analytics

■ Inventory Management

■ Keyword And Category Research

■ Product Launches

■ Product Research

■ Growth Plans on Amazon:

The majority of Amazon sellers are looking to grow their businesses in the near future. This year, over half, approximately 58%, have ambitious growth plans for 2022 and will be expanding onto other eCommerce platforms.

It is, therefore, no surprise that sellers are exploring new opportunities. With the growth of eCommerce, it’s important to remain on top of your game and seek out potential competitors before they can get a head start. Currently, 32% of sellers operate in more than one Amazon marketplace.

■ Profitability on Amazon in 2022:

The recent COVID-19 pandemic is undoubtedly a severe challenge to many businesses, but it seems that there’s no stopping the unbeatable power of sellers. In fact, according to the 2022 report estimates, 76% of Amazon sellers are profitable in 2022 despite the pandemic.

In an era where many people are shopping digitally, it is interesting to note that 45% of Amazon sellers say their profits increased from 2020 to 2021 and will continue to increase over the current year, 2022.

■ FBA vs. FBM Users in 2022:

Amazon FBA Service Providers are also at all-time high demand, with 89% of sellers preferring the use of FBA fulfillment services over FBM. Although some merchants, approximately 21%, have used both FBA and FBM wherever necessary. 

■ Selling Amazon Businesses:

According to the research, it was found that 25% of entrepreneurs are exploring new ways to make money through Amazon. One in four recent sellers plans on selling their business.

■ Supply Chain Issues:

It’s hard enough to turn a profit these days, but the last thing you need is an obstructive supply chain. The losses caused by supply chain issues are impacting Amazon sellers financially. In 2021, 30% of Amazon retailers reported losing around $10k or more in sales due to various supply chain issues like the following:

■ Being unable to order new inventory from the supplier.

■ Current inventory is damaged or unavailable due to some reason.

■ Delay in inventory orders.

■ Losing the buy box due to running out of stock.

■ Not being able to contact the supplier or the supplier going out of business.

Thankfully, about 67% of sellers were able to address these issues by taking a few approaches as follows:

■ Launching new products.

■ Reducing PPC bids for slowing down sales in case of short inventory.

■ Pivoting from FBA to FBM or vice versa.

■ Discontinuing a product that the supplier cannot supply any more.

■ Getting more space for inventory.

■ Launching their products on other retail platforms in addition to Amazon.

■ High Earners on Amazon:

The statistics showed that 63% of sellers could become profitable within one year after launching their business on Amazon. Make note that the longer you’ve been selling on Amazon, the more money you are likely to make. In fact, 60% of retailers having 3+ yrs under their belt and 25% of sellers with 2 years on the platform earn over $100k annually on Amazon. This means that as a new seller on Amazon, you will see your earnings increase gradually over time as you gain eCommerce experience.

■ Business Expansion Plans of Amazon Sellers in 2022:

The future of eCommerce on Amazon is bright, with 95% planning to expand their businesses in 2022 in the following ways:

■ By launching new products and growing their product lines:

The top Amazon product categories for sellers in 2022 include Beauty & Personal Care, Clothing, Shoes & Jewelry, Health, Household & Baby Care, Home & Kitchen, and lastly, Toys & Games.

■ By investing in advertisements and trying a variety of new marketing strategies:

32% of sellers plan to increase their advertising budget in 2022, while around 38% want to dabble in trying new marketing tactics. The most common marketing strategies are PPC campaigns like Amazon Sponsored Brands ads or Amazon Sponsored Products ads, Facebook ads, Google Ads, and lastly, Instagram ads.

■ By selling on a variety of new eCommerce platforms/marketplaces:

The top global marketplace sellers are most likely to expand to include the countries of Canada, the European Union, Mexico, the United Kingdom, and lastly, the United States.

Conclusion:

In 2022, Amazon sellers can expect to see continued growth in sales and profitability. Sellers who can successfully invest in their businesses and continue to innovate will be the most successful. Those looking to sell their Amazon businesses should do so while the market is still hot, as prospects for business expansion on Amazon remain uncertain.

Finally, if you’re looking for high-quality Amazon product photography to make your products stand out on the platform, we are happy to help!