What will 2024 look like for a company selling on Amazon? What challenges and opportunities will Amazon sellers face in the future?
Jungle Scout’s State of the Amazon Seller 2024 study helps us understand what 2024 will look like for the Amazon seller and what changes we are likely to see during the year. These include a number of interesting changes from multichannel e-commerce to social media and rising costs.
Expansion of e-commerce
More and more brands and retailers have adopted an omnichannel retail strategy in recent years. In 2023, around 60% of Amazon sellers will sell their products in at least one other channel. These alternative platforms are seen as clear winners, particularly on social media platforms and among companies’ own Shopify and online stores. Among social media platforms, TikTok Shop and Instagram have sparked renewed interest in social media sales channels.
20% of Amazon sellers and brands plan to expand to TikTok Shop in 2024
Long-established brick and mortar retail leaders have strengthened their e-commerce platforms, attracting a large number of Amazon sellers. Walmart has so far remained the undisputed market leader in US brick-and-mortar retailing, but has recently turned its attention more broadly to e-commerce.
Walmart Marketplace, launched by Walmart, is an online shopping platform that operates in North America in a very similar way to Amazon. Walmart also has big shoulders to stand on to challenge the giant Amazon. In 2023, Walmart’s turnover grew to €648 billion, overshadowing even the growing e-commerce giant Amazon, whose turnover grew to €574 billion in the same year. We will continue to follow the development of Walmart Marketplace with interest.
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Suuri osa Amazon-myyjistä harkitsee laajentumista Walmartin lisäksi myös muihin verkkokauppapaikkoihin, kuten eBayhin, Etsyyn, tai jopa kiinalaisiin kilpailijoihin Alibabaan tai SHEINiin. Tämä kertoo yhä enenevissä määrin verkkokaupan monikanavaistumisesta Amazonin nykyisestä johtaja-asemasta huolimatta. Siinä, missä tutkimukseen osallistuneet yhdysvaltalaiset pk-yritykset olivat kiinnostuneempia omasta Shopify -verkkokaupasta (36%), olivat suuremmat myyjät kiinnostuneempia muista verkkokauppapaikoista, mukaan lukien Alibabasta (29%) ja SHEINistä (22%). Tämä povaa mielenkiintoista tulevaisuutta myös kiinalaisten verkkokauppapaikkojen osalta, jotka ovat saavuttaneet räjähdysmäistä kasvua länsimaissa ja alkaneet houkutella alustalleen myös länsimaisia myyjiä.
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60% of Amazon sellers will sell their products on at least one other channel in 2023
Challenges of selling on Amazon
The new year also brings its own challenges for Amazon sellers of all sizes. The nature of the challenges varies according to the size of the seller in the survey. In the study, Amazon Sellers & SMBs refers to small Amazon sellers with less than 2 million annual turnover. These sellers include not only SMEs but also sole traders and individuals. Enterprise Brands, shown on the right, refers to Amazon sellers with more than 2 million turnover, especially enterprise brands.
In these challenges, it is easy to see the impact of size on business. For corporate brands, the biggest challenge is perceived to be more long-term and strategic branding & product development, while for smaller vendors the challenge is much more tactical aspects such as gathering reviews and finding new product ideas. Regardless of size, many sellers are concerned with the challenges that are very typical of online retailing, such as collecting reviews, inventory management, advertising, and financial management. An experienced Amazon partner can help with all of these challenges, enabling you to conquer a large e-commerce jungle with a greater chance of success.
45% of Amazon sellers said they would consider an Amazon partner to support their online store
In addition to internal challenges, vendors will have to deal with many external challenges. In 2024, Amazon sellers, brands and businesses will face ever-increasing costs. More than a third admit to being concerned about rising costs for advertising, shipping and merchandise. This concern may lead some businesses to reconsider their investment in external resources. Rising costs are a major concern that will influence companies’ decisions and strategies in the future.
Read also: How will buying on Amazon evolve in 2024?
Amazon sales targets
The year 2024 also includes new targets for companies selling on Amazon. The most common goal among the Amazon sellers surveyed is to increase sales volume. This goal is clear in itself and reflects the challenges of rapidly rising costs, to which a large proportion want to respond with higher sales. In addition, the objectives include brand building, product offering development, and international growth.
In addition to the goals, Amazon business sellers identified key areas of focus for 2024, the biggest of which was product research, for which Amazon is an excellent tool. From the wealth of data available on Amazon, a variety of tools can be used to quickly explore large amounts of data, which is valuable information for marketing and product development. Let’s say we are developing a new kettle primarily for the US market. How valuable would a summary of the most common complaints and praise for the same product category be, combining data from tens of thousands of competitor reviews? If you are interested in Amazon as a support for product development – contact the experts at YAP.
46% of Amazon sellers in the US market also operate in at least one other international market.
Getting started on Amazon is quick and relatively inexpensive, but success requires an understanding of the e-commerce giant’s business logic. Getting to the top of Amazon’s search results requires a careful strategy and continuous optimisation. Our knowledgeable journey leaders will be happy to discuss your business’s potential in the ecommerce jungle with you – feel free to contact us!
