For those considering leaping into e-commerce by starting their own Amazon business, recent trends and forecasts for the industry indicate the e-commerce gold rush is far from over.
Online retail has continued to roar in 2020, with Business Insider reporting that e-commerce sales for consumer packaged goods grew 83% during the April to early July period compared to 2019.
Industry projections suggest the shift in consumer spending is more of a flash point than a temporary flash-in-the-pan.
With so many encouraging signs and a promising trajectory, it’s no wonder starting your own online business continually ranks among the top ways for aspiring entrepreneurs to start their empire and design their own path to financial freedom.
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The outlook for e-commerce is already bullish, but don’t be surprised if 2020 outpaces projections as a result of the COVID-19 pandemic. The ongoing pandemic has wreaked havoc on many industries, and traditional retail has been one of the sectors hit the hardest.
Retailers and department stores reliant on brick-and-mortar retail such as Neiman Marcus and JCPenney have filed for bankruptcy, while many others in the sector also find themselves on the ropes. For in-person retail, it’s just the latest blow for an industry running out of margin for error.
Does this mean people have stopped spending? Not at all. The pandemic hasn’t shifted if people will spend their money, but how they will spend it. Instead of heading out to stores and malls, consumers are staying inside and buying online.
How do we know this to be true? Look no further than Amazon, the leader in e-commerce who recently released their Q2 2020 earnings report.
Amazon is responsible for 50 percent of all e-commerce trade, so their earnings are an incredibly powerful indicator on the overall health and direction of e-commerce.
On July 30th, Amazon reported $88.9 billion in revenue, up from $63.4 billion in Q2 2019. The e-commerce behemoth is only growing more powerful as e-commerce continues to pick up momentum making FBA (Fulfillment by Amazon) selling an extremely profitable business opportunity with the right resources and strategy.
As retailers who have relied upon traditional retail flock to Amazon, e-commerce will only strengthen their advantages and continue to take a larger piece of the retail pie. But will the arrival of major first-party sellers take a chunk away from third-party sellers?
So far, the answer has been an overwhelming no, as sales from 3P sellers continue to grow year-after-year.
“Third-party sales again grew faster this quarter than Amazon’s first-party sales,” confirmed Jeff Bezos, CEO of Amazon. Amazon’s first-party sales were up 49%.
“Our 3P sellers, who are largely comprised of small and medium-sized businesses, also stepped up to help make more selection available for customers. And as a result, these small and medium-sized businesses have seen significant growth in their sales. Our third-party seller services revenue grew faster than online stores revenue in Q2, with strong growth in both fulfillment by Amazon and merchant fulfilled or MFN seller sales. Third-party units continue to represent more than half of overall unit volume, helped by improved quarter-over-quarter growth in active sellers.” — Brian Olsavsky, CFO of Amazon
The demand from customers on Amazon has never been higher, with over 150 million Amazon Prime subscribers built into the customer base. For years, the biggest barrier for an e-commerce breakthrough was product availability and customer convenience.
Amazon has grown to an international powerhouse thanks to its platform designed to make the process of buying and selling online easy for those on both sides. On the seller side, Amazon has opened the doors for aspiring entrepreneurs by leveling the playing field with massive warehouses for storage and their state-of-the-art two-day Prime shipping logistical program.
These assets are enormous advantages that have simplified or entirely erased areas of concern for those with entrepreneurial ambitions, allowing them to spend their time and energy on finding the right product and maximizing their opportunities for success in the marketplace.
While the light to jump into the e-commerce game is as green as ever, it won’t stay green forever.
Every day, hour, and minute of experience you have on Amazon is valuable for growing your brand and maximizing your profits, and others will surely be entering the marketplace as the industry continues to grow.
Fortune favors the bold and the informed
At Viral Launch, we understand starting your online business can be an exciting, but intimidating leap. That’s why we at Viral Launch have made it our goal to provide everything you need to have the data and strategy to succeed. If you haven’t already, sign up for a Viral Launch account today and gain access to your free trial to see all the powerful insights you can glean from our vast amount of Amazon data. With Viral Launch’s Product Discovery and Market Intelligence tools, you can scout the market to find winning products that align with your resources and goals.
Follow our step-by-step guide to Amazon product research to help you find the perfect product for you! Be sure to join our Facebook community of sellers from all walks of experience and don’t be shy to join in the conversation.
There’s likely to be no better time than right now to get your online business off the ground and be your own boss! Amazon’s seller-friendly platform, Viral Launch’s powerful data and invaluable insights, and an emerging market are the perfect storm for your entrepreneurial success!