Since its founding in 1994, online retail company Amazon has become a tech giant with a market cap of $1.7 trillion. Amazon’s stock has risen by 225,233% since its IPO, and its founder, Jeff Bezos, now has a net worth of $195 billion.
As an Amazon seller, your business may not be quite as big. However, you can still learn to grow your business like Amazon, expand your profits, and reach new markets in the enormous audience that Amazon provides for your products.
- The average Amazon seller today is able to start an Amazon business quickly, with a minimal upfront investment, and begin profiting within 3 months
- Key lessons from Amazon’s business model can help you increase your revenues as an Amazon seller
- Market education and networking allow you to grow your Amazon business and work toward being your own boss
By the Numbers: What is it Like Being an Amazon Seller Today?
A recent study by Jungle Scout gives a clear picture of how online retailers thrive in the Amazon marketplace. Some of their most important findings include:
- 2.4 million currently active sellers: Forecasts estimate that 1.5 million new sellers could join Amazon in 2021. However, there’s enough room for everyone, as the platform serves 300 million customers across the globe.
- 42% of sellers dream of financial freedom: “Be my own boss” is the primary motivation cited by Amazon Marketplace sellers exploring a new career path. About 47% of sellers are self-employed and live off their retail businesses.
- 62% of sellers saw their profits grow compared to the previous year: Despite the COVID-19 pandemic, 44% of Amazon sellers said their businesses performed better than expected.
- 64% of Amazon sellers profit within their first year of selling: New sellers in the marketplace can be raking in up to $42,000 in profits annually.
- 39 years old is the median age of an Amazon seller: Most sellers are between 25 and 44 years old, while 36% are over 45.
- 67% sell private label products: Other popular Amazon business models include wholesale (26%), retail arbitrage (19%), online arbitrage (17%), and dropshipping (9%).
- 54% of sellers are able to launch a business on Amazon within 3 months: About 31% of sellers are able to do it in 6 weeks, 23% in 6 weeks to 3 months, and 20% in 3 to 6 months.
- $5,000: This is the average spending of sellers to start their business on Amazon. Half of Amazon sellers earn this much per month, while 25% sell over $25,000 a month.
- 66% invest in Amazon pay-per-click ads to market their products: Other popular marketing methods include Facebook ads (23%), Instagram ads (13%), and Google ads (10%).
While the numbers above show the profitable side of things as an Amazon seller, it’s not easy to soar like an eagle in the ecommerce business. In fact, in the same report, over a third of aspiring Amazon sellers revealed that they need more training and education or are overwhelmed by the selling process. One in four retailers say they are concerned about the competition, and that they are confused about how Amazon works.
7 Things You Need to Do to Grow Your Business Like Amazon
If you are aiming to succeed as an Amazon seller, the following tips will help you expand your reach:
1. Have the Right Mindset
As an online entrepreneur, you will be the captain of your own ship. This means you need to have the right mindset in order to succeed.
Experts compare mindsets to mental lenses that will help you sift through reams of information and enable you to navigate any situation you encounter. Your mindset can determine your ability to engage with others, manage change, and perform your roles effectively.
As an Amazon seller, you need to have a good balance between learning and growing, implementing decisions, and prioritizing progress toward your goals.
Leadership expert Roselinde Torres offers three basic questions you need to ask yourself if you want to be an effective leader in the future:
Video suggestion: https://www.youtube.com/watch?v=aUYSDEYdmzw
2. Your Vision is Your Anchor and Compass
In an interview, Amazon founder Jeff Bezos emphasized the need for vision. He encourages people to hold tight to their vision and not let anyone move you away from it. Your vision serves as an anchor point that defines your purpose as a retailer.
Bezos reminds everyone that when things get confusing, you can go back to your vision and regain your bearing. He also reiterates the importance of looking ahead by developing a plan that extends two to three years out. This will allow you to stay relevant in the fast-paced online retail business.
3. Narrow Your Niche
While it is tempting to follow the footsteps of Amazon sellers raking in profits in the high-demand segments, it is important to know your market and address your customers’ pain points. Focus on one or two niches and see what products will sell well. Then, improve your products or add more variations to address the needs of your buyers.
4. Focus on Customers
Customer-centric companies are 60% more profitable than businesses that don’t focus on their customers.
If there’s one thing online entrepreneurs need to learn from Amazon, it is the online retail giant’s customer-centric approach. Bezos’ management style did not focus on staying ahead of competitors, but rather staying a step ahead of Amazon’s customers. Using this strategy, products and services are developed in advance of when customers need them.
5. Experiment, Experiment, Experiment
To improve your products and customer experience, do not be afraid to experiment. Understand your market and watch for trends that may affect your business. Then, see how these developments will affect your customer base.
As Bezos puts it, you need to be firm with your vision but flexible on the details. When you experiment and try things, you push yourself to innovate. Experimentation should be part of your team’s culture. When ideas pop up, see if you can measure them before implementing them.
6. Be Agile
As you grow your business, remember to be agile. You should be willing to disrupt even your own business for the sake of expansion. You need to be ready for scenarios that disturb the status quo or put you out of business. Fast execution is the key to making the most of opportunities that come your way.
7. Network and Harness the Power of Community
Attending trade conferences perfectly complements your online marketing efforts. At these events, you will learn more from experts, network with other Amazon sellers, discover new solutions and service providers, and see what your competitors are doing.
During trade shows, you will be able to connect with fellow Marketplace sellers, as well as spot trends that can inspire you to improve your products and services. Likewise, you will strengthen your understanding of the shared identity, vision, and struggles that help you push for improvements in the industry.
Grow Your Amazon Business – Join Us at the Prosper Show
The Prosper Show is the industry’s leading conference and trade show for Amazon sellers, customized to meet the needs of sellers who want to expand their businesses further.