Dustin and Kris discuss the Amazon marketplace and the top 10 things Amazon sellers should know in 2020.
10 Fascinating Amazon Statistics Sellers Need To Know in 2020
1. 9 out of 10 consumers price check a product on Amazon.
2. 2% of Echo owners have purchased a product via Alexa.
3. Amazon sells more than 12 million products.
4. Amazon sells over 1.1 million home improvement products.
5. 95 million people have Amazon Prime memberships in the US.
6. $1.4K is the average spent by Amazon Prime members each year.
7. FBA gives sellers a 30-50% increase in sales.
8. Third-party sellers—most of which are small and medium-sized businesses—surpassed $3.5 billion in sales on Prime Day—a nearly 60% year-over-year increase.
9. More than 50% of all Amazon sales come from third-party sellers.
10. 80% of sellers also sell on other platforms outside of Amazon.
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– Hello everyone, and welcome to episode 20 of Two Amazon Sellers and a Microphone. I’m Dustin Kane and with me as always is Chris Gramlich. What’s happening, Chris?
– Not much. How you doing?
– Doing great. Episode 20
– We’re just plowing through this.
– This has been a lot of fun too.
– It is fun.
– And now we’ve got a lot of guests coming on in the future. So I’m really excited about that. That’s gonna be really informative stuff we’ve got going on.
– Yeah, it’s good to see this take a little bit of steam here and get people interested and now we got some guests we’re gonna bring on. So they’ll just be full of information. So it’s gonna be, I’m excited where this is headed. It’s gonna be a lot of good information coming.
– Absolutely. Most excited about today’s show. We’re gonna be discussing 10 Amazon’s statistics sellers need to know for 2020 and some of these are just absolutely mind-boggling and we’re focusing… This is the first time we’ve really focused just sort of on the marketplace as a whole, what’s happening in the Amazon world, why it’s such a good opportunity now, how fast it’s growing. So big hat tip to bigcommerce.com. I got these statistics off of an article that they wrote. Absolutely, they were able to compile these statistics and they’re absolutely just fascinating.
– And it’s gonna be fun to talk about.
– Yes. Some of these numbers and you showed it to me earlier before we started this, some of these numbers were just crazy and I’m sure in like six months from now these are gonna be even higher. But yeah, this is again, this is why private label is probably one of the most lucrative businesses out there to get started especially with Amazon FBA, and these numbers speak for themselves.
– Oh yeah. And it also refutes what I hear a lot is that the Amazon model is dead, it’s too crowded, it’s hard to get in. These numbers tell a completely different story. If this is the Primetime, this is the gold rush right now on Amazon. It’s growing like crazy. So this is gonna be really fun. And hopefully, these are eyeopening and encouraging for everyone out there listening
– For sure. For sure. Let’s get into it.
– Yeah. So let’s talk about number one. Nine out of 10 consumers price check a product on Amazon. That’s almost hard to believe.
– Yeah. I mean think about like, I don’t know, four or five years ago, it wasn’t really that common, but now when you go into a Walmart and you go into a Target, I’m guilty. First thing I did was like, “Well, let me check it out on Amazon first. Let’s see what this price is on Amazon.” Even though I can get it the same day, maybe I could save four or five bucks or maybe even more if I just wait a few days. So yeah, this is always something I do is price check on Amazon just to make sure that you’re obviously getting the best price.
– Oh yeah. There’s no doubt about this. And this was really interesting to me ’cause I do this myself like you do it but I assumed that I’m just in this world so it made sense for me to check it. But to know that that’s how the average consumer is shopping. I mean, if they’re out and about their price checking it, and if they’re checking online another thing is the majority of consumers start their shopping search on Amazon. They don’t even Google it anymore. They go to Amazon and then they start. So, I mean, it’s just amazing what this platform is taking off to be. 90% of consumers are price checking their products on Amazon. So.
– That’s why we love it.
– Oh yeah. What’s interesting about that though, is if they’re price checking something that’s a product similar to yours, there’s a good chance they see yours even if they’re looking for a different brand name. So there’s just tons of opportunities with that kind of demand.
– Yeah. This is where you can bid on your competitor’s brand name. If somebody is typing in really well-known brand on Amazon and you happen to have the similar product and you can bid on their brand name, you may be able to get that sale from a bigger brand by just kind of taking that ad space from them.
– People are looking it up. If your price is better and you’ve got good reviews and you’re able to offer a similar product good chance you might get that sale.
– Yeah. No doubt about it. That’s a great point about a product targeting on your ads as well. All right. Moving onto the next one. This one’s really interesting because it’s sort of the future of shopping, but-
– And this one seems low to me by the way. 2% is low but go ahead.
– Yeah. 2% of Echo owners have purchased a product via Alexa. So that’s just gonna open up as this number grows. You’re right. I would have expected it to be more but still, this is something that I personally haven’t done. We’ve got Alexa all over the house and I’ve not yet ordered off of one, but the ease of which somebody is gonna be able to just say, “Hey, Alexa, buy this,” and it’s shipped to them it’s gonna be the future. And there’ll be really interesting to see how Amazon opens up advertising opportunities in this as well.
– Yeah. So I’ve done this and what ends up happening is it just adds it to your cart and then you can check out later to see whatever that Amazon’s choice product is that you say. It’ll add it to your cart and then you can always decide if you wanna buy it later. But another thing I’ve seen with this is after you buy something after you buy something through Amazon, you’ll get a notification from Alexa like two months later. It says, “Two months ago you purchased turmeric. Would you like to reorder it again?” It’s like, “Sure. I guess I do need it again.” So it’s only gonna get better. And this is like 2% of only using it, so 98% of not, so there’s gonna be a lot of room here to grow and moving forward. And like you hit with the ads, that’s gonna bring up a market, for sure, especially coming out with your voice. Share voice is gonna be something there. So this has good potential to grow.
– Oh yeah. It just shows that you think something’s big and there’s just room for it to get bigger and bigger and bigger. So very, very exciting there, exciting to see how we can take advantage of that. Take advantage of those Echo people.
– How many do you have?
– I’ve got three. Yeah. So there are
– They are everywhere.
– It’s nice. They can make grocery lists for you. They can tell them to reorder stuff.
– Yeah. And we have Firesticks that have Alexa on them. I mean, yeah. So it’s crazy. It’s crazy. All right. Number three of the crazy statistics from Amazon. Amazon now sells more than 12 million products. That is a lot of products.
– Yeah. It should say something like Amazon and third-party sellers or something.
– Yeah. Which does a big-
– [Both] Yeah.
– Big misconception there.
– Yeah. This is a big, people always assume that these are all Amazon products, but it’s a marketplace. So there’s small businesses that are selling products on Amazon’s platform. So yeah, that’s totally a process. That’s a ton. So it’s only gonna get bigger. You can find anything on Amazon. If you can type it in on Amazon and you don’t find it that’s probably a potential product you could source. So if you’re doing researching, you type in something on Amazon and you’re not finding it, maybe use this as a way to maybe source your next product too.
– Absolutely. And they’re fulfilling what they set out to be and that’s everything from A to Z. If you’ve got 12 million products you’re covering everything basically. And I see that growing. This number is just gonna continue to grow and yeah, more than half of these are from people like you and me. It’s a market place. So it really interesting to see that number. All right. Moving on. Number four, this is an interesting one. Amazon sells over 1.1 million home improvement products. This just shows you the scope of categories.
– And when you’re talking about… We’ve talked in previous episodes about product research, how to find a niche inside of a niche and everyone talks about what’s super competitive. If there’s 1.1 million different home improvement products that you could sell, I think you can find an under-served niche in there.
– Yeah. Yeah. I think so too. And it feels like this is a category that probably doesn’t get a lot of attention just because it’s so unique. Like home improvement products, everybody’s usually sourcing products like baby or home goods or whatever, pets. And this is probably an area where you can potentially find a good niche to get into. But for me, I look at this as like maybe demographics of like men shopping on Amazon is growing because normally men go to Home Depot or Lowe’s to buy products from it. Maybe they’re starting to come onto the platform and buy products from Amazon. So there’s potential here to grow too and it feels like, “Oh, that’s a ton of products for a home improvement niche.”
– Well, just the other day my dryer broke and I was trying to figure out, I was researching out like I have any business trying to fix that. Yeah.
– But I was determined I was going to and it was some little small part, it’s called a thermistor. I don’t even know what that does. So I looked it up on Amazon and there was a bunch of, they were clearly private label products for that. And I was like, that’s incredible. I never would have gotten that far in my product research, but it had tons of sales. This little piece was like 12 bucks, probably cost a nickel. I mean, it was nothing. And it was, but you’d have to make your listing very specific to all the different dryer models that this works for. But it really opened my eyes into where I could be going in other areas.
– That’s funny. You just reminded me. I bought a new air filter for my furnace here. It’s been a while since I replaced it, probably three years. I’m guilty But I went on Amazon and I didn’t even think about it. I didn’t go to Home Depot or Lowe’s, I didn’t wanna mess with going down the aisle, figuring out where to find it. I just got on Amazon, typed in the model I needed and it was there. I purchased it and I was done with it.
– So it’s becoming too easy to do that.
– Oh yeah. So there is lots of opportunity on this space. All right. Moving on. This is a huge number. 95 million people have Amazon Prime memberships in the United States alone. That is-
– It’s like this is gonna increase every year. Especially with the Prime Days that they’re doing and the holiday shopping, I feel like they get so many more memberships coming on for Amazon Prime. So I feel like this number is gonna continue to grow year over year over year.
– Yup. And this represents your guaranteed customer base. I mean, these 95 million people that are paying for this subscription are doing a lot of their shopping on Amazon. And so it’s just gonna grow. You’re right.
– It’ll be interesting to see, if you’ve seen it too but Walmart’s trying to make some noise-
– Oh yeah.
– In this space with like free membership. So it’ll be interesting to see what direction this number goes, especially over the years. If these numbers continue to increase or if more people transition to more of a Walmart where it’s a free membership. So it’ll be interesting. I don’t know what’s gonna happen here but this’ll be a good number to track moving forward.
– Yeah. It’ll be interesting to see how long Walmart keeps it free.
– Yeah, for sure.
– Yeah. And then who knows down the road, maybe this is something like Netflix and Hulu. People thought well, no one’s canceling like Netflix when they get Hulu but they just have both.
– All right.
– And it’s probably gonna be something similar to that. That will be very interesting. It’s a great point. All right. Next one. Number six on the stats, $1,400 is the average spent by Amazon Prime members each year. This is actually lower than I thought.
– I feel like I’ve spent that like in three months. Yeah. This feels low to me. But again, more potential for people to obviously buy more as they get comfortable with it. I thought this number is gonna get higher each year as more people come on and they see how easy it is to buy and then they start getting familiar with it. And they’re like, “I’m just gonna continue to check Amazon.” I thought this number is gonna continue to increase. So I would look for this to get higher.
– Absolutely. And like we’ve spoken about many times before because of what’s just happened because of this pandemic, because of how people have been sort of forced early into shopping online if they weren’t doing it initially. Yeah. I bet you, this number is a lot higher next year.
– People buying everything on there. All right. Next one. Well, this is something we definitely talk about all the time.
– Yeah. For sure.
– FBA gives sellers a 30 to 50% increase in sales. This, I mean, when you get that Prime badge and you’re selling to people that are Prime members they want free shipping, that’s what they’re paying for. If you’re not, they’re gonna just skip over you. And when we preach, we’re on calls all the time people. We’re selling FBA and that’s our first recommendation. Have you tried FBA? You can make a huge difference.
– And when we talked to them, they’re doing small numbers, they don’t really put a lot of time into it, they’re focused more on their website, which is fine. But when we talk to them, say, “Just do FBA, send a few items into FBA and I promise you, you’ll double your sales.” That kinda think it’s a joke, like double my sales. They’re like, “Nah.” You really will because people when they look for a product, they want the Prime, they could turn on the Prime badge and that’s all they wanna see is products that are eligible for Prime. So yeah, this doesn’t surprise me. I mean, I would say 50% probably is more accurate because it will increase your sales just by going to FBA.
– Oh yeah. And the knock is that I hear all the time, “Oh well, there’s all these fees involved with selling on Amazon.” And I’m like, well, if your sales double or triple and there’s a little extra expense that seems to be worth it to me.
– And you can increase your price.
– Yeah, exactly. You can increase the price.
– Prime members will pay more for an item that they can get faster.
– Yeah. There’s no doubt about it. All right. Moving on. Number eight. Third-party sellers, most of which are small and medium-sized businesses, surpassed 3.5 billion in sales on Prime Day, one day, a nearly 60% year-over-year increase. That is mind-boggling.
– Yeah. What I like about this is that this came out and it was showing that it’s small and medium-sized business owners doing this. You’re seeing all the ads that Amazon is running on TV, all the commercial ads, they’re showing that they’re helping small businesses create jobs. So this is showing you that Amazon is a marketplace for small mom and pop businesses that are trying to survive during this time when everything’s closed down and you can’t go to a store. So I’m glad that stat came out ’cause this is massive. I feel like it’s only gonna get bigger. I don’t know how it’s gonna go, there’s no way to really know that. But every year it feels like Prime Day just gets bigger, bigger, and just much more sellers, there’s more buyers. So this is a great time to get in.
– Yeah. And if you’re out there and your mindset is that you like to shop local because Amazon is some big corporate behemoth that just is making millions and billions of dollars. There are local stores on Amazon.
– Change your mindset.
– The mom and pop that’s down the street from you that sells soap that you go buy from they’re probably selling on Amazon. It is a corporate behemoth, but it’s also where every small business is now existing and surviving. It’s saved them, a lot of them. Yeah. You have to shift your mindset. You can be very supportive of your local economy through Amazon. All right. Number nine. More than-
– That got ties right into that.
– More than half of all Amazon sales come from third-party sellers. And Amazon has admitted to trying to push this actually, to push this even more. So yeah. That’s something I think that your average shopper has no idea about. None. That the majority of sales are coming from people like you and me.
– Yeah. That’s true. I mean, we talk to people all the time, like, “Oh I’m gonna get basis more money. I’m not going to do all this.” It’s like, “You’re missing out first of all.”
– You’re right.
– Because if you just go FBA and you do a little bit of advertising, your sales will increase.
– It’s hard to get people to change their mindset after something like that ’cause they’re set in their ways-
– Oh yeah.
– And so it’s hard to
– That’s like saying, “I don’t wanna rent a store ’cause I don’t want to give the landlord my money.” Well, then where are you gonna sell? He’s giving you the opportunity to have a store. Amazon is giving you the opportunity to have a store. That’s a little fee for it, but it’s amazing. Where else can you sell to everybody in the world from your living room?
– It’s true.
– It’s crazy. It’s crazy. All right. Let’s talk about the last one. Number 10. 80% of sellers also sell on other platforms outside of Amazon. Interesting statistic and I do.
– Yeah, I bet 90% of these sellers, all their sales come from Amazon too.
– I do
– Yeah. I mean, sure they sell on other platforms but 90 more percent of their sales are coming from Amazon. It would be my guess. But yeah, you could do things like a Shopify store. You could make your own Shopify website or e-Commerce store, whatever you want to use. You could sell on eBay, you could sell on Etsy, you could sell on Newegg, I’ve heard that one, was kind of a newer one. You could sell on Walmart. So there’s other places you can go, Lowe’s, Target. But I would probably focus more on Amazon ’cause that’s where the traffic is at and that’s where you’re probably gonna get majority of your sales and then as you wanna scale maybe you can dabble in these other marketplaces.
– Absolutely. Yeah. And see, early on, I wanted to try to use Amazon as a platform to launch my Shopify store. I quickly realized that I was, I mean, it’s like the 80-20 rule. I was spending all this time setting up my Shopify, making it look amazing and I would get, it would be like 500 to one sales, like every 500 sales I got on Amazon I got one on my Shopify store and that really hasn’t changed much. What’s great about having these other platforms though is when my inventory goes out of stock on Amazon, I see a quick uptake on my website. It’s like, if I have repeat buyers and they’re searching that’s it’s out of stock, they will go to my store. Yes. You make more money when you sell on Shopify. Yes. You have to go like package it yourself and ship it. So I tip it and it’s not the 80-20 rule for me, it’s like the 99 from one rule I should focus everything on Amazon and that’s where I’ve shifted.
– Yeah. And if there was one to kind of look more into, it would probably be Walmart for me, just to see what’s going on but trying to make a lot of noise. They’re doing Walmart fulfillment. There’s a program out there you can get into. So that would probably be the one I would look more into. Your product may not make sense but you’d still want to check it out. But I would still maybe put all my effort into focusing on Amazon while I kinda Keep Walmart over my shoulder, just in case that I deal with to kind of pivot or have a backup plan if my product does get kicked off on Amazon or I get suspended or whatever it is, you do want to kind of something where you can kind of pivot to. But I think Walmart would be probably the biggest one I would look at. Would there be one that you would look at?
– Oh yeah. I agree. I mean, they’re probably gonna just try to match the model of Amazon going forward. So I mean, that’s the way I’m set up. I’m not set up to be a warehouse where I’m shipping everything out. So I’d rather and I think you could get some real estate right now on Walmart easier than you could on Amazon. So if it grows or as it grows, that could be valuable. You could be ranking pretty well for your products. So yeah, that would definitely be my next venture, is Walmart.
– Yeah. There’s a lot of good stuff that we covered a lot here. It’d be nice to see what happens a year from now and look at these numbers. I would imagine all these go up, especially number two, 2% of Echo owners have purchased a product via Alexa.
– That just seems really low. So we’ll see what happens.
– Yeah. I mean, I remember listening to podcasts, 2014, 2015, talking about numbers and I thought they were astronomical. Well, they are minuscule compared to these numbers. So I mean, it’s grown so much. I really hope these statistics that we wanted to bring them on, so you’re encouraged to keep going to launch a product. I mean, this is getting bigger and bigger and bigger which means there’s more pie for everyone to grab onto and there’s more space for you to exist in here with this marketplace. So yeah, be encouraged, be encouraged.
– And also if this was valuable, give us a review on our podcast, give us …
– Yeah. Let us know we did. That’d be great for us to just to kinda get some feedback.
– We’re just doing this ’cause we’d love to talk about the space. So if you feel free to leave any type of review, that’d be great. We’d love to see the feedback you guys think so far.
– Yeah. And share us with a friend. You got a friend out there who’s looking to start share us around. All right, Chris. We’ll be back at this tomorrow. Everyone have a great day.
– See yah.