If you’re in the ecommerce business, you know the impact Amazon has on online sales.
After all, almost 50¢ out of every US ecommerce dollar is spent at Amazon
Internationally, 206 million people visit Amazon sites every month! That’s the population of Russia, Kazakhstan, and the Ukraine combined!
Amazon continues to grow at a breakneck pace. Up more than 20% in 2019. In fact, every Amazon category grew 15-30% in 2019
But there are two Amazon trends even the savviest ecommerce insiders may not know …
First, most of Amazon’s growth comes from third-party sellers.
In June of 2019, Jeff Bezos reported to Amazon shareholders that third-party sellers now represent 58% of Amazon’s sales. Up from 31% just 10 years ago.
What does Bezos think about this trend?
To put it bluntly, he writes …
Third party sellers are kicking our first party butt. Badly!
(His words, not mine)
To put these numbers into context. Over the last four years, sales from third party sellers have increased by more than $95 billion.
That means that third party seller growth is higher than the total annual sales on eBay
This explains the second little known fact …
Many well-known brands grossly underperform on Amazon.
To make matters worse, many brands don’t even know they’re underperforming. Because many brand’s year-over-year growth is higher on Amazon than in other channels, they assume they’re doing well.
The truth of the matter is that aggressive third-party sellers are — if I can quote Jeff Bezos — kicking their butts … and stealing their market share!
So, what steps should an established brand take to combat these trends?
- Recognize that Amazon is a competitive marketplace
- Calculate your brand’s Amazon market share and use market share as a primary KPI
- Identify the competitors who are stealing your market share
- Start competing
If you need help getting on track, we chip in with a FREE Amazon Competitive Analysis. This data-driven analysis gives you a customized overview of the competitive landscape in your brand’s category. Best of all, it’s complementary.
Just click on the link below to request your FREE Amazon Competitive Analysis
And remember, you can’t win if you don’t compete!
