By Greg Mercer, Founder & CEO of Jungle Scout, the leading all-in-one platform for selling on Amazon
I often get asked “When is the best time to start selling on Amazon?” My answer will always be: now! Ideally, it would have been yesterday.
During these unprecedented times, you may have more time on your hands and you’re looking for another source of revenue. Maybe you’ve always wanted to sell on Amazon and haven’t yet made the leap. Whatever your situation, I recommend prioritizing selling on Amazon because, now more than ever, shoppers are choosing screens over stores.
Let’s explore the reasons why it’s a great time to start selling on Amazon and how to capitalize on today’s consumers’ shopping preferences.
Business is booming.
Over the course of the pandemic, those of us in e-commerce have seen staggering changes in how consumers buy. Much of that evolution can be attributed to the accessibility of purchasing online.
Let’s take a look at Amazon’s market capitalization. At the outset of Covid-19’s influence in mid-March, Amazon was sitting around $900 billion. With the acceleration of e-commerce trends, Amazon looked poised to solidify its position above the $1 trillion market cap line.
Fast forward to September and the company has surpassed its trillion-dollar goal. At time of writing, it has hit over $1.75 trillion, its highest peak to date. That’s almost a 200% jump.
More people are turning online to buy.
In this age of new shopping habits, contactless convenience is a clear winner, as well as an unstated expectation. Of course, speed and reliability are also important to today’s shoppers. Other consumer considerations are the variety of product offerings available and the ease of price comparison.
While I’m curious how “sticky” these habits will be post-Covid-19, I do know that this experience will alter the way consumers interact with physical stores and, thus, the brick-and-mortar landscape. Some retailers, such as Harry & David, have already announced they won’t be reopening their physical stores at all.
In my company’s survey of more than 1,000 consumers, “69% say they will maintain or increase their online spending even after/as physical stores reopen” and “39% say they’d be fine if they never had to shop in a physical store again.” Additionally, 48% of consumers say they are shopping on Amazon more frequently now than they did prior to the Covid-19 pandemic.
McKinsey’s survey of U.S. consumer sentiment during the pandemic also reflects that there has been an accelerated shift in the intent of consumers to continue online shopping post-Covid-19, with more people expecting to make at least a portion of their purchases online across all surveyed categories, including books, apparel, at-home entertainment, groceries and more, after the pandemic ends.
So, what does this mean for sellers? To get a piece of the pie, you need to know what consumers want today.
Consumer preferences are changing.
The sooner you dive into Amazon, the sooner you can find out exactly what consumers are looking for, and how to build a successful business around that sustainable product opportunity.
From observing the Amazon playing field at large, I have noticed a push toward “essentialism.” Categories like “Grocery & Gourmet Food,” “Baby,” “Health, Household & Baby Care,” “Beauty & Personal Care” and “Pet Supplies” are dominating in popularity — this is a reflection of how consumers are exhibiting restraint when spending overall is down.
In alignment with cutting back, there has been a noticeable decline in clothing and electronic purchases, as more and more people are transitioning into a virtual work space and cutting non-essential spending. McKinsey data reflects that consumers in the U.S. are spending more on groceries and household supplies overall, and less on categories such as apparel and electronics.
While this change in spending habits may be temporary, as an Amazon seller, it’s crucial to understand consumers’ motivations. That means doing your research into product demand, learning from your mistakes and tweaking your strategy as you move forward.
Success begins by saying yes.
Now is the time to capitalize on Amazon’s popularity, and make no mistake — there is still ample space to enter the market.
Granted, as an entrepreneur, one of the hardest things to do is to say “yes” and make a commitment. But making a choice and sticking to it is the only way you can make progress. Plus, the earlier you enter the Amazon space, the quicker you can learn from first-timer mistakes, giving you the advantage over new competitors in the future.
Unique opportunities are always cropping up for sellers — it’s just up to you to take full advantage of the marketplace. In my eyes, Amazon continues to be the most promising platform to sell products and make money online. Others think so, too. I know I’ve mentioned it before, but it bears repeating: More than half (52%) of the U.S. consumers we surveyed say that if they were only able to buy products from a single store, it would be Amazon.
With Amazon’s strong consumer affinity and success, it’s prime time to start your own business.