How, exactly, does the Coronavirus pandemic affect the Amazon seller marketplace? It’s the question on everyone’s minds here at ZonGuru and across the FBA seller community as a whole. Inevitably, that question leads to even more questions. How are supply chains affected? Is it time to invest in launching more products? Is this even a good time to even start your own Amazon business?
We talked with other experts in the field to get their input, and found some fascinating insight. Want to know more? Read on.
More than 2/3rds of Americans are under quarantine orders, and non-essential businesses are closing up shop around the globe. With everyone staying at home with nowhere to go, it seems like online shopping would EXPLODE, right? Well, not exactly. Sales are up in some categories and down in others. But what’s the overall trend? More on that in a minute.
Let’s take a second to gain some perspective first. Traditional retail businesses are taking a beating. They can’t operate right now, yet still have massive overhead costs such as storage, rent, and payroll. Amazon Private Label businesses have it relatively easier thanks to not having the same expenses as brick and mortar stores.
So while sales may slow, they’re not slowing down as much as other businesses. Stay grateful for that. Now, let’s take a look at the numbers and see exactly where we are.
We’ve been in the Amazon Private Label seller space for quite some time now, which means we have a lot of reliable data to pore through. For this example, we grabbed random random sales data samples from Amazon sellers who have been with us since at least 2018 (thank you!). The trends we saw give us hope. The stats we look at are average sales, which is just the average of all sellers in the sample. We then calculated the median, which is a value that removes outliers (AKA: sellers who sell HUGE amounts of product and throw the curve off for everyone else). Take a look.
Amazon FBA Sales Numbers:
These numbers might be confusing at first. For example, why are we comparing December sales vs the first 4 months of the year? Simple: to understand the average drop off of sales from the holidays to the start of the year, with and without Covid-19.
The first encouraging bit of news we can glean from this data is Jan-April sales from 2019 compared to 2020. Even with Coronavirus fears, there’s an increase in sales of at least 1.3x.
That number increases with sellers who diversify by selling more products in broad categories, as evidenced by the 7.6x average! Even now, sales for big names and smaller names alike are going up.
Now, let’s look back at the sales for December 2018 vs the Jan-April sales of 2019. This gives us a better picture of typical post-holiday season sales trends. An average of 14x, and median of 2.06x. Not bad.
With that in mind, take a look at the December 2019 sales vs the Jan-April 2020 sales. A 48x average, and 1.45x median. That 48x makes sense when you think about it: sellers lucky enough to be in the right categories are making a killing right now.
You may wonder about that median 1.45x. Yes, there is about a 40% drop off in sales. Given the circumstances, this is not that bad. However, margins are still up. But, again: there is still, at the bare minimum, a 1.3x increase in sales.
After looking at the numbers, the moral of the story is this: based on trends, the majority of sellers who launched more products are better off than those who launched just a few or none at all. The impact on our industry is meaningful (up or down). Without large overhead costs like in other industries, we have a better chance of navigating this pandemic and come out on top, stronger than ever. If there ever was an indication that this is the right industry to be in (as your main gig or your side hustle), this is the proof. Now is the time to jump in, navigate the present as best as possible, and prepare your product road map to launch more products over the long-term.
With ZonGuru on your side, you can maximize this opportunity and make real money to help you and your loved ones get through this challenging time. We’re dedicated now more than ever to guiding you along your journey towards financial independence. Especially with the launch of some brand new tools in the product selection and sourcing phase! When you’re ready to give us a shot, sign up for a free 7-day trial!
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