- In 2013, Amazon's total net revenue was $74 billion.
And in 2020, their total revenue was $286 billion.
They were able to increase sales by five times.
However, this massive growth led
to 2.7 million active sellers
and a total of 8.1 million sellers.
And that's what makes most people question,
is Amazon FBA still worth it in 2022
despite all this competition?
To start quite easy,
here are top five crazy facts about Amazon.
Amazon has over 300 million Prime customers worldwide.
That's twice the entire population of Russia.
Number two, amazon.com receives
nearly 3 billion visits per month.
Number three, nearly 2/3 of Americans
have bought something from Amazon.
That's more than 90% of US online shoppers.
Number four, Amazon owns more than 90%
of market share in five product categories.
And number five, the most visited retail site
in the US is Amazon.
And here's a bonus stat.
Liking this video can 10 times support this channel
so I can continue making these useful videos for you guys.
These stats prove why selling on Amazon
has been very beneficial
and it has a lot of traffic and trust.
But where is the situation today?
Has it become more challenging to sell products on Amazon?
Are the cost for promotions higher than in the past years?
Also, with Amazon Prime customers no longer
have to pay for shipping, which leads to more fees
and less money for sellers.
So is it still worth doing Amazon FBA
or are the profit margins already too low
that it no longer makes sense to sell products on Amazon?
To find out, let's take a look at the situation in the past.
Product research and sourcing were easier in the past
because, number one, less Amazon sellers.
Number two, fewer products listed on Amazon.
Number three, various products with bad listings.
Number four, less work for manufacturers in China.
Number five, low quality articles.
And number six, no free shipping.
This meant anyone can jump on Amazon
and start selling any products they want
without even doing any SEO
or taking any good pictures for the products.
They will still make sales.
However, today, the situation on Amazon
is more challenging, and here's why.
Number one, an increasing numbers of Amazon sellers
leading to increasing competition.
Number two, a growing number of products
on Amazon marketplace,
which also indicates increasing competition.
Number three, excellent products with good listings.
Number four, Chinese manufacturers have more work
and are not dependent on individual sellers.
Number five, Amazon sellers offer high quality product.
And number six, shipping is free because of Amazon Prime.
Now, looking at these facts, the current situation
seems to be more competitive than past ones.
And as a seller, I can hundred percent say
it is more competitive than when I started in 2020.
Some of the products I sold
used to have 3 to 5 sellers, which now has 10 to 15 sellers,
which means I have to share my sales with them.
And some sellers may even take down the price,
which lowers my profit margin.
Amazon also recently increased the FBA fees,
which affected every seller's profit margins.
And some new sellers had to stop selling some products
because they probably got the products
at a very high price from the manufacturer.
Also, when selling on Amazon, you are relying on Amazon,
which means if Amazon is down, which is highly unlikely,
then you are not making any money.
Whereas if you sold your own product on your own website,
you have control over that.
Now, after hearing this, most of you guys must be like,
"Jatz, I think it is no longer worth selling on Amazon."
But here's the thing, selling on Amazon
has merely become more complicated,
but this does not mean that it's impossible
to start a successful business on Amazon.
There are great tools and resources
that can help you double your chances of success.
If you know the right methods to beat your competition
and find the right products,
then you still can make money with Amazon FBA.
I'm going to plug my eight weeks live zoom calls,
Amazon FBA Mentoring Program here,
because my students are still making over £1,000 in sales
in their first month after the mentoring.
And that too, with all this competition.
The reason why I'm not worried about having 3 to 5 sellers
to now 10 to 15 sellers on products I sell
is because I have built relationships
with my suppliers for a long time.
And I can get a product at the cheapest price,
so hardly anyone can undercut me
because if they do so, they'll literally make a loss.
Amazon's recent increase in fees affected my profit margins
for just three to four weeks because every seller
on the listing had to increase their prices
to maintain the profit they made previously.
Now, if you're wondering how I knew my profit
was affected for only three to four weeks,
well, it's because of a platform I use called Osome.
They provide me with reports on how my business is doing
to help me make better decisions for my Amazon FBA business.
They also do my Amazon FBA taxes
as they're a dedicated E-commerce accounting company.
So having them helps me not stress
about doing all this admin work
and just focus on building my Amazon FBA business.
And if you wanna use Osome, you can get £110 off
when signing up using the link in the description.
Thank me later.
Moving on, despite the increase in competition,
76% of Amazon sellers are still profitable in 2022.
And it is worth mentioning that nearly 65%
of third party sellers have reported earning profit margins
higher than 10%, and 32% reported earning profit margins
about 20%.
And that's still in 2022, by the way.
This is mainly due to the low capital startup needed
for Amazon FBA.
Unlike a traditional business,
you don't need to invest tens of thousands of pounds
in rent, bills, and equipment.
You can start Amazon FBA from your couch at home
with as little as $250,
depending on which business model you wanna start with.
And starting a brand on Amazon is more likely
to be successful and less costly
than making your own website and promoting it
because you'll first need to pay thousands in advertising
to bring customers to your own website,
then turn them into loyal customers,
which can take you years.
Whereas on Amazon, there are already millions
of active loyal Prime customers who are growing day-by-day
as numbers of people who shop online is increasing rapidly.
And customer service is a huge hassle for any business.
You have to spend too much time dealing
with all your customers
because just one bad review going viral
is enough to tank your business.
Plus, packaging, shipping, and posting problems
are another major hurdle when starting
and scaling up a business.
If you're wearing several hats,
you can't afford customer service and postage
unless you have got Amazon FBA.
When Amazon does your customer service and postage,
you don't have to worry about returns
or customer complaints.
If Amazon messes up, they will pay for it.
In my opinion, you can still build
a profitable Amazon FBA business
as long as you give your a hundred percent focus and time.
Don't expect to start making five figures just in a week
because that's not happening,
unless you get lucky and find a sick product.
There will always be new product opportunities
arising every day
and Amazon is not going anywhere anytime soon
because Mr. Bezos knows what he's doing.
So overall, there are far more upsides
of selling on Amazon than downsides.
And if you're looking to start Amazon FBA,
then go watch this or actually this video,
which is a 45 minute in-depth tutorial
of how to start on Amazon.
And if you enjoyed this video,
then don't forget to leave a like, subscribe.
And I'll see in the next video.
Peace.