A testament to their success, the company still managed to rake in huge profits at the height of the Coronavirus pandemic and its aftermath. As of the second quarter of 2023, it was reported that Amazon net sales increased by 11%, from  $121.2 billion in Q2 of 2022 to $134.4 billion in Q2 of 2023. 

The success of Amazon is mainly because of the resources they allocated for the improvement of processes and policies. By spending over $4 billion for “incremental COVID-19 related costs,” the company managed to make a successful adjustment to their services.         

Along with the eCommerce company’s success, the accusation of Amazon killing small business has surfaced. Many ask, is Amazon killing small businesses, is Amazon killing the retail industry?

Amazon Killing Retail Small to Medium Enterprises  

Despite the success of Amazon and its offering of a safer avenue for shoppers to buy essential goods during the pandemic, some groups remain wary of its dominance. In particular, some people believe that Amazon’s success is actually causing more harm to small and medium-sized retail businesses. In unison, the concerned group asks, is Amazon killing small businesses?

This issue of Amazon apparently destroying the retail industry ecosystem is not something new. It can be remembered that in 2019, even the United States Treasury Secretary Steven Mnuchin believed that Amazon is adversely impacting the retail industry.

“I think if you look at Amazon, although there are certain benefits to it, they’ve destroyed the retail industry across the United States so there’s no question they’ve limited competition,” Mnuchin told CNBC.

The Impact of Amazon to Small to Medium Businesses

Amazon itself is not deaf to such allegations regarding their company and its practices. However, despite the accusations, Amazon remains to be one of the trusted eCommerce companies both in the USA and abroad. 

In contrast to the accusations of their critics, Amazon firmly believes that they are not killing small businesses, but rather helping them to reach more audiences while providing growth in the process. This was further emphasized by Jeff Wilke, Amazon’s CEO Worldwide Consumer, during one of the Amazon Accelerate virtual conferences. 

In the interview, Wilke highlighted the existence of a mutually beneficial relationship that Amazon has with its sellers, a greater portion of which is composed of small to medium business owners. It is estimated that nearly 2 million small and medium-sized businesses are operating on Amazon. 

With the growing members of third-party sellers, like those small and medium business owners, Amazon remains unthreatened by this growing population. 

According to Wilke, Amazon’s goal is to help sellers thrive, for if they thrive they will bring more selection that will in turn, lower item prices. Hence, benefiting more customers in the process. 

Innovations Amazon Introduced to Empower Small and Medium Enterprises

In order to empower small and medium businesses, Amazon introduced new seller tools and updated some platform features intended to drive success for small and medium enterprises. These Amazon seller tools and features help sellers facilitate better product launching, optimization, marketing, and customer service.  

Some of the tools launched and features improved by Amazon that offer powerful and cost-effective capabilities include:

Local Selling: Local selling empowers small businesses to provide the option of “online purchase, in-store pickup,” thereby expanding their reach to a more extensive local customer base.

Product Opportunity Explorer: This Amazon seller tool helps business owners determine new and high-potential products to sell online based on unmet customer demand. It gives sellers insight into what consumers search for, click on, and purchase online. 

Global Selling: In order to facilitate the expansion of small businesses’ international sales, Amazon has enhanced its global selling capabilities. This enhancement permits small businesses based in the United States to pinpoint opportunities for selling their products internationally. Moreover, sellers who handle order fulfillment independently can access Amazon’s Customer Service at no cost.

Search Analytics Dashboard: Amazon also introduced the Search Analytics Dashboard to help business owners better understand customers’ interests and shopping choices. It helps small businesses optimize their online store listings and develop effective inventory planning and product development roadmaps to grow their business on and off Amazon. 

Brand-Building Innovations: Amazon also introduced brand-building innovations to help businesses develop their brand, grow their customers, and increase sales. Some of the programs for brand-building that Amazon introduced include the Amazon Brand Referral Bonus, Amazon Customer Engagement, and A+ Story Cards.

Amazon Small Business Academy: To demonstrate its commitment to aiding business owners in their business growth endeavors, Amazon initiated and has been consistently updating the Amazon Small Business Academy (ASBA). This platform serves as a comprehensive digital resource hub catering to both aspiring and established business owners and online entrepreneurs.

Amazon’s Impact on Small Businesses In Numbers 

Last May of 2023, Amazon released its annual U.S. Small Business Empowerment Report, detailing that their investments and innovations to support business owners and entrepreneurs increased sales of U.S. independent sellers—most of which are small and medium-sized businesses.

Based on the report, the top categories by sales for independent dealers in Amazon’s stores include the following:

Top 1 – Health and Personal Care

Top 2 – Home

Top 3 – Beauty

Top 4 – Grocery

Top 5 – Apparel

In 2021, Amazon allocated $1.4 billion to foster the expansion of small and medium-sized enterprises. Consequently, independent sellers in the United States managed to sell over 4.1 billion products, which equates to an average of 7,800 products sold every minute.

The Vice President of Worldwide Selling Partner Services at Amazon, Dharmesh Mehta, emphasized that “Small businesses are the lifeblood of our local communities and the foundation of the U.S. economy. Amazon dedicates billions of dollars each year to offer entrepreneurs an ever-enhancing array of valuable tools and resources…”

Amazon serves as an effective platform for small businesses to make their online stores more visible to shoppers and ultimately grow their online sales. It is estimated that over 60% of Amazon’s store sales are generated by independent sellers, the majority of which are small and medium-sized businesses. 

Amazon’s support for small businesses extends beyond the borders of the United States, offering improved opportunities for small enterprises globally. Amazon EU also dedicated more than €20 billion to support logistics, tools, services, programs, and training for the success of Small and Medium Enterprises (SMEs) on its platform.  

Through these initiatives, Amazon enabled small businesses to actively engage in the European Single Market and international export arenas, leading to SMEs generating over €14.5 billion in exports and generating 100,000 new jobs.

Additionally, being in business with Amazon also means access to their advanced Amazon seller tools, including FBA calculator, repricers, and so much more. Therefore, allowing small business owners a seamless transition from traditional retail business to eCommerce. 

Embracing Change For Business Success 

Undeniably, Amazon has changed the retail and consumer landscape. However, it cannot be denied that with the entry of Amazon into the retail industry, it has become easier for sellers to reach more customers and suppliers alike. This is in direct contradiction to the claim that Amazon killing retail. 

From a performance standpoint, Amazon has somehow leveled the playing field. Independent brands and small businesses are now able to compete with huge corporations and their firmly established brands. 

As the digital marketing landscape continues to develop and global consumers are increasingly becoming more open to online shopping, small and medium businesses should likewise embrace the digital transformation and the ever-growing popularity of eCommerce.

Borrowing the words of the famous naturalist, Charles Darwin, “it is not the strongest or the most intelligent who will survive but those who can best manage change.

2021 will serve as an adjustment period for most businesses as they continue to redesign, adapt, and modify their business models and platforms in consonance with the new normal and the ever-changing demands of consumers worldwide.

The eCommerce Explosion in 2021

The COVID-19 pandemic has brought the global economy to a standstill with its implementation of lockdowns and quarantine periods. However, despite the strict government protocols, eCommerce businesses managed to rise above the challenges.          

Top eCommerce platform, Amazon, doubled its profit during the pandemic. Based on current industry growth and recorded sales of multiple eCommerce platforms, the future of eCommerce is indeed promising. Thus, enticing more entrepreneurs and investors to join the industry boom. 

In view of the increasing success of eCommerce amidst COVID-19 and diminishing quarantine restrictions in major countries, states, and cities, some brick and mortar stores have started to modify their services in order to adapt to the current shopping behavior of consumers.   

Although there is no conclusive data on how many new eCommerce businesses were started during the pandemic, it is safe to assume that this global health crisis produced and will continue to produce an influx of online businesses.

Furthermore, an increase in unemployment worldwide also influenced the rise of eCommerce. As an increasing number of retrenched employees turned to online selling as a source of income, eCommerce activity has become more active than it was before.                         

It is estimated that the “global eCommerce market will reach $66,932.1 billion by 2030, growing by 13.5% annually over 2020-2030,” according to a press release published by MarketWatch. 

eCommerce Emerging Markets for 2021

The future of eCommerce depends not only on the current strong marketplaces. The continuous success of the eCommerce industry in 2021 also depends on new and emerging markets.

Currently, the majority of eCommerce revenues are coming from the Americas and European countries. However, emerging marketplaces such as China, South Africa, Brazil, Russia, and India are gradually becoming a stronghold for eCommerce businesses.                                            

The sales growth of the eCommerce industry from emerging marketplaces is expected to reach 20% of all retail sales in 2022. Such an increase is likely influenced by the on-going improvement of internet access in the aforementioned countries.    

2021 eCommerce Trends to Consider      

The future of eCommerce is indeed bright, especially that e-retail revenues are projected to grow up to 6.54 trillion US dollars in 2022. By carefully identifying the eCommerce trend in 2021, sellers will have a better chance of becoming successful with their online ventures. 

To give sellers insight into specific updates, here are some eCommerce trends worth considering for 2021.                                                            

Omnichannel Experience

Even before COVID-19, shoppers have been turning to online retail stores to fulfill their shopping needs. However, what separates successful online retail stores from their competition is a seamless and consistent experience across all channels and devices.      

Omnichannel should be prioritized this 2021 as more and more consumers use numerous channels for their shopping ventures. In a study of 46,000 shoppers, 73% of shoppers used multiple channels when shopping online.                  

Apart from the traditional website shopping experience, sellers should introduce other channels such as a mobile app for a convenient shopping experience.     

Voice Commerce

The increasing reliance of consumers on technological advancement has pushed buyers to utilize voice assistance for their eCommerce experience. 

Voice assistant devices, such as Amazon Echo with Alexa and Google Home with Google Assistant, have been widely used by households to do almost everything including online product purchases. It is estimated that by 2025 75% of houses in America will have smart speakers.     

Be sure to optimize your eCommerce store in anticipation of an influx of searches and purchases via voice command products. Product descriptions, tags, and other factors that contribute to voice command search result visibility should be properly handled as early as today, Q4 of 2020.     

AI Incorporation                                       

Artificial Intelligence is a growing trend within the eCommerce industry. Online sellers and other eCommerce participants should look into the incorporation of Artificial Intelligence into their online selling system.    

Many online stores and eCommerce platforms are using AI to help in offering personalized guidance and recommendations to online shoppers as in-store associates. AI is also being used on social media platforms to help drive traffic and improve customer satisfaction and engagement.                             

Latest Payment Options

Another trend that sellers should consider for 2021 is new payment options. While payment wallets like PayPal, Payoneer, Google Pay, Samsung, and Apple Pay are slowly becoming a global trend, not all online stores have incorporated such payment options.

Hence, it is logical for sellers and online stores to start implementing new payment options within their businesses. 

Dynamic Pricing Strategy                                        

In the world of eCommerce, dynamic pricing is gradually becoming a necessity. If you are dealing with voluminous inventory, manual repricing will surely be a headache, especially during peak seasons where price wars are more prevalent. 

The use of automatic repricers for a dynamic pricing strategy is a must-follow trend in 2021. Amazon sellers, for example, are using automatic repricers for their Amazon stores. 

Automatic repricers such as Seller Snap can make repricing easier for your sellers like you. Additionally, price wars may be avoided with the software’s capability to adjust product prices according to the current marketplace situation, API fed information, and competitors’ behavior.              

Augmented Reality

One of the major adoptions in the eCommerce retail industry would be Augmented Reality. The future of eCommerce customer interaction could greatly improve with augmented reality. 

With AR, customers who are unable to physically interact with the actual product sold online will have an opportunity to experience the product. 

Becoming a Leader in the Future of eCommerce

The future of the eCommerce industry holds many questions and doubts for some online sellers. However, with proper preparation and application of upcoming trends, your eCommerce venture will succeed.

If you are interested in shaping your online business to fit the demands and needs for 2021 and beyond, be sure to adopt the latest trends and technology for the eCommerce industry.

Amazon inventory sometimes becomes stagnant, leaving Amazon sellers with low to no sales at all. Many Amazon sellers experience Amazon inventory that just does not sell. Instead, such products end up sitting in the Amazon warehouse, incurring storage fees.

The reason behind stale Amazon inventory can vary from one seller to another and there are many factors to consider when it comes to selling on Amazon. Some of these factors can be categorized into pricing, Amazon FBA Buy Box, Amazon listing optimization, and customer service-related issues. 

Improving Amazon FBA Buy Box Win Rate Through Proper Optimizations

To give you an overview of what might be causing such slow-moving Amazon inventory, here are some of the top reasons Amazon sellers should be wary about. 

PRICING – AMAZON BUY BOX OVERSIGHT

One of the reasons why an Amazon store or Amazon inventory is not selling is lack of access to the Amazon Buy Box. and proper buy box optimization. Some reasons why sellers are not awarded the Amazon Buy Box are highlighted below. 

1. Off-Site & On-Site Product Price Discrepancy 

When it comes to product pricing, Amazon has an advanced algorithm to check for the average product price online. The Amazon algorithm can easily check whether an Amazon listing item is priced too high or too low for its particular category.

Amazon technology goes beyond its own platform, its servers can also scrape data from other online selling platforms. This allows the algorithm to suppress the Amazon FBA Buy Box for Amazon inventory with a big pricing discrepancy.  

Experienced Amazon sellers make use of automated Amazon repricers to help them combat this and ensure that their Amazon inventory prices fit the current marketplace situation and adjust accordingly to competitor’s pricing behavior. This aids in optimum buy box optimization. 

2. Amazon Buy Box Glitch

There have been reported instances where Amazon sellers are not being awarded the Amazon Buy Box, despite being the cheapest or most competitive item. 

That is why sellers who are still having issues with a particular Amazon inventory should check for possible system glitches. The so-called Amazon Buy Box glitch is not the first time Amazon has encountered some error. 

In the past years, there have been a number of system errors observed by Amazon sellers, and some of these system issues were even acknowledged by Amazon. 

OPTIMIZATION MISTAKES

Besides the pricing and Amazon Buy Box oversight, an optimization mistake, including Amazon mobile optimization, is among the factors that influence poor Amazon inventory movement. Slow product movement may be caused by various optimization mistakes.

3. Listing Non-Amazon Sanctioned Categories

When it comes to listing optimization, sellers must be aware of the qualifications and approval requirements of certain Amazon inventory. In particular, sellers are required to get approval from Amazon before they can list a product to a specific category. 

If you are planning to list a certain brand, as part of the optimization process, you should first identify whether the inventory item requires approval or not. To know which products and categories require approval from Amazon, you may CLICK HERE. 

4. Product Title Guideline Violations

Another commonly violated rule by some Amazon sellers would be the product title guideline. When listing Amazon inventory, it is recommended to optimize the title of the listing. However, some sellers end up overly optimizing the title section of the listing.

When it comes to adding titles to your product listing, Amazon is very stringent with the rules. Amazon sellers should follow guidelines and avoid adding identifying details about the item in the title. To avoid this mistake, here are some title guidelines coming directly from Amazon Seller Central. 

• Title containing promotional keywords and phrases (for example, free shipping, 100% quality guaranteed, etc.)
• Title containing non-readable characters including emojis.
• Title exceeding more than 200 characters.
• Title not containing any product identifying information (no product type name and no product characteristics – for example, a single word title such as N/A)

5. Your Amazon Listing is Not Optimized Enough 

Another optimization mistake that hinders inventory movement is inadequate listing optimization. Optimizing the product title is not enough when it comes to scaling up your Amazon store. 

Other aspects of product listing should be optimized as well. As well as the title, sellers should optimize images, key features, product descriptions, and as mentioned before, pricing.

CUSTOMER SERVICE-RELATED CONCERNS

Customer service is another key factor for sales when it comes to Amazon. For sellers experiencing issues with their Amazon inventory movement, be sure to check customer service performance and other related aspects of customer service. To serve as a guide, here are some of the factors affecting product movement in relation to customer service:

6. Not Having Enough Good Reviews

Research shows that 84% of online shoppers trust online reviews. Whether it is on Amazon or other online platforms, good reviews really matter. In order for Amazon sellers to improve their chances of selling Amazon products, having good reviews is a must. 

Similarly, 22% of online shoppers would stick to Amazon if they could find products suitable for their needs and wants. And one of the criteria of a reliable and trustworthy Amazon product is the good reviews associated with it. 

7. Response Tone 

Another component that is influential to Amazon inventory movement is the review response and its tonality. Getting upset with customers is always a NO-NO when it comes to the Amazon business. 

It cannot be helped that some customers complain, demand, argue. Arguing leads to negative feedback, which can have a really negative impact on your business.

Misunderstanding How Amazon Works

Perhaps one of the most prevalent and yet less commonly acknowledged factors for slow Amazon inventory movement is the lack of proper knowledge on how Amazon really works. Some Amazon sellers who have experienced selling on other platforms are guilty of misunderstanding the Amazon interplay upon their first try with Amazon Seller Central.

To avoid committing mistakes when it comes to setting up and running it, you should do prior research. Understanding the guidelines set by Amazon will also help increase your Amazon inventory movement.