Between rising fees, regular re-verification processes, and an influx of new competition, you might be wondering if selling on Amazon is really worth it.
If the latest Amazon Small Business Empowerment Report is anything to go by, the answer is probably yes.
In May 2023, Amazon released its 2022 Amazon Small Business Empowerment Report, highlighting the ways growing e-commerce businesses are succeeding on the platform. Because while the mega-marketplace does come with its challenges, Amazon remains a major engine for small business success.
Here are some of the top highlights from the latest Amazon Small Business Empowerment Report, plus a few tips to help you scale your business on Amazon.
Amazon Small Business Empowerment Report: 8 Top Takeaways for Growing Merchants
- 60% of sales on Amazon are from independent sellers.
- Brand owners grew sales more than 20% year over year.
- Sellers who used A+ Content Manager saw 25% more customer interest.
- Health, personal care, home, beauty, grocery, and apparel lead the way.
- Shipping with FBA costs 30% less.
- Amazon sellers exported over 260 million products globally.
- Amazon’s Black Business Accelerator fuels innovation.
- Selling with Amazon can also mean giving back.
1. 60% of sales on Amazon are from independent sellers.
You know Amazon is a go-to platform for budding entrepreneurs. But did you know that independent sellers actually defined Amazon’s existence as a marketplace?
In 2000, Amazon opened up its platform to third-party sellers. Seven years later, independent sellers claimed the majority share of sales on Amazon — turning the company into a full-fledged marketplace, rather than just a retailer.
Decades on, independent sellers have continued to grow, accounting for 60% of Amazon sales in 2022.
While a more crowded marketplace may mean increased competition and a higher risk of issues like counterfeiting and organized retail crime, Amazon’s enormous and still-growing customer base also means more opportunities for fast-growing businesses.
Merchants who focus their efforts on landing the right niche and optimizing their listings for the customer journey can still see increased traffic and sales.
2. Brand owners grew sales more than 20% year-over-year.
The stats look even better for brand owners and private-label products.
Sellers with their own unique products are eligible to register their brands with Amazon, which brings advanced protection against counterfeiting, patent disputes, and black hat competition tactics.
Registered brands on Amazon also get access to special benefits, like Sponsored Brands ads, and branded Amazon storefronts, with the ability to attractively showcase multiple products at once.
Brand Store pages can also boost your business’s organic rankings, making it even easier to outpace competitors.
3. Sellers who used A+ Content Manager saw 25% more customer interest.
Amazon A+ Content, previously called Enhanced Brand Content, is one of the perks available only to registered brands on the platform.
The feature allows sellers to create content for product descriptions and product detail pages with rich text, image carousels, and video. A+ Content also includes a tool for testing different versions of each page, to see which attracts more customers and conversions.
According to JungleScout, using A+ Content for your product description can increase your brand’s conversion rate by an average of 5.6%. By using more detailed product descriptions, branded imagery, and other features available with A+ Content, you can also increase customer satisfaction, reduce your rate of returns, and boost your chances of getting good product reviews.
In addition to quality content and bespoke storefronts, sellers with an Amazon Small Business badge can get listed on Amazon’s curated Support Small page, making their stores and products more discoverable for conscious shoppers.
4. Health, personal care, home, beauty, grocery, and apparel lead the way.
According to Amazon, customers “love” health and personal care products. However, the popularity of these categories is more likely linked to convenience and necessity.
Amid an ailing drugstore market, an increasing number of lock-up products, and regular stockout and supply chain issues, regular purchases of key necessities are often easier on Amazon.
Brands that fill the gaps where brick-and-mortar has failed to meet customer needs stand to make major gains in the coming years — especially those that can offer a more inclusive experience for shoppers from historically underrepresented groups.
After decades of contending with segregated product shelves, Amazon shoppers can now get their haircare from a plethora of growing Black- and women-owned brands. For example, Locsanity specializes in plant-based hair and body care products that founder Charmaine James created herself, after not being able to find them on retail shelves.
Sellers like James — who aren’t afraid to reinvent, redefine, or reposition staple items — will see an even bigger sales lift as these products continue to shift online.
5. Shipping with FBA costs 30% less.
With UPS struggling to catch up after labor negotiations with the Teamsters union, Amazon’s fulfillment network continues to deliver advantages to growing sellers.
Amazon customers are also far more likely to buy a product labeled “Shipped by Amazon” — even if it’s from a company they’ve never heard of before.
Edgar Diaz, Head of Business Development for family-owned Lucy’s Inc., says the company struggled to break into brick-and-mortar retail. Thanks to FBA, Lucy’s has doubled in size. With the success they’ve seen on Amazon, the company is planning to launch a new organic product line.
“Our goal is to source ingredients from our family ranch in Mexico,” Diaz told Amazon. “That way, we’ll have full control, from seed to juice to finished product.”
Shipping via Amazon can help you save money, win new customers, and expand your business. However, ongoing changes to Amazon seller fees can make it challenging to maintain your margins.
To reap the benefits of FBA, keep close tabs on your inventory and think strategically about how to maintain working capital as you scale.
6. Amazon sellers exported over 260 million products globally.
Becoming a cross-border business no longer requires making connections, mastering a new language, or tackling complex logistics and red tape (in said language 😬).
Amazon’s global selling channels build the infrastructure for you, while you focus on catering to your customers with quality products.
Selling internationally on Amazon does have a learning curve, but it’s all spelled out for you with Amazon Global Selling. As long as you follow Amazon’s guidelines and pay close attention to tax laws, selling internationally can help you take advantage of peak shopping seasons in other countries and the larger growth potential of international markets.
Amazon sellers who already sell internationally are optimistic about the future of global expansion via Amazon. An impressive 50% of current global sellers surveyed said they planned to explore selling in new international markets in 2023 — up from 25% who said the same in 2022.
7. Amazon’s Black Business Accelerator fuels innovation.
In June 2021, Amazon committed $150 million over four years to support Black entrepreneurs.
In late 2022, the company appointed Danyel Surrency Jones to run its Black Business Accelerator. Jones is co-founder and former CEO of Powerhandz — a small business that scaled rapidly with Amazon’s help.
Since starting the Accelerator, Amazon has also launched the Impact Accelerator and committed an additional $150 million to support underrepresented tech founders. Through a partnership between the Accelerator and the Fearless Fund in 2023, 75 women of color founders were enrolled in the Accelerator and awarded grants of up to $20,000.
Through the Accelerator, qualified sellers can access resources like financial assistance, education and coaching, and marketing and advertising support for free.
8. Selling with Amazon can also mean giving back.
Nearly 100 million products were donated through the FBA Donations program in 2022.
The program helps sellers manage FBA overstock and eligible returns by donating them to Amazon’s charity, Good360, which redistributes products through its network of nonprofits.
All FBA sellers are opted into the program automatically but have the option to add additional donations if they choose. Sellers who donate also get access to a certificate that shows how much they donated, for tax purposes.
This is great news for sellers who struggle with managing their inventory. As you work to avoid stockouts while minimizing storage fees, know that any extra Amazon inventory you wind up with can still go to a good cause — and earn you some helpful deductions in the process.
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If you’re a growing business, Amazon can still help you get ahead. But with a strict seller payment schedule and evolving seller guidelines, it helps to have a friend in your corner.
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