Amazon Prime Day 2019 is behind us now, but it saw merchants' sales exceed £1.61 billion in sales worldwide. This made it the biggest Amazon shopping event ever for third-party sellers when comparing two-day periods.
There's little doubt that Amazon is a superb marketing and sales machine and the flywheel keeps on turning, but there are a couple of changes coming down the line this year worth noting. They may well impact how you sell on Amazon to get the maximum return for your investment in the marketplace.
Amazon Advertising revenue is still growing at a healthy pace with 37% year on year growth in the last quarter which comes on top of the 129% growth for the same period last year. This means that if you're not spending on Amazon Sponsored Products and Amazon Sponsored Brands your competitors are and they will be hoovering up sales that could be yours.
Whilst it's an additional cost, research by Merkle reveals that sales revenue growth has continued to outpace spend growth, up 102% for Sponsored Products and 53% for Sponsored Brands.
In other words - if you get your Amazon Advertising right, your sales growth will be bigger than the increase in what you pay.
Invest in more inventory for one-day shipping
Amazon merchants selling in the US may want to consider increasing their inventory levels if they don't want to miss out on sales. Amazon are rapidly rolling out one-day shipping and latest news shows this has hit their profits as they have had to invest in more stock to spread around warehouses across the continental US. They need stock to be nearer the customer and this means holding it closer to where the customer lives.
If you use FBA in the US, then at some point you may also need to increase inventory levels to enable Amazon to hold your stock in multiple warehouses. As consumers become accustomed to one-day shipping, there's no point having all your stock in a West Coast warehouse if customers on the East Coast are buying. You'll need your stock spread across the US.
Amazon Vendor vs Amazon Merchant
News has been out for some time that Amazon have stopped placing orders with some Amazon Vendors and instructed them to become Amazon merchants to continue selling on Amazon. This means that rather than Amazon purchasing stock and acting as a retailer, Amazon want the Vendor to list the stock themselves as a merchant.
Amazon's Brian Olsavsky has stated that they are agnostic as to 1st party and 3rd party sales and all they care about is price convenience and selection. However the more Amazon grow it would appear the less inclined they will be to act as a retailer, especially for smaller brands, if they consider that brand could do just as good a job managing their own sales.
Keep up to date with Amazon News
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