About 60% of Amazon sellers promote their goods through the marketplace's Sponsored Products platform, but some look toward other advertising platforms to get the word out about their products.
Campaigns on sites like Facebook remain a tool for Amazon sellers, with 42% saying they use social media to advertise. Some 36% use product listings; 25%, AdWords and/or search marketing; 13% turn toward Google Shopping; 13%, A+ Content; 8%, display or banner ads; 4%, print advertising: and 3% seek an advertising agency for help.
The report, The State of the Amazon Marketplace, published by Feedvisor, a business intelligence software provider, analyzes responses from 1,600 Amazon merchants about their selling habits, revenue, concerns, and plans for the future. Their answers shed light on the evolution of Amazon's marketplace.
Not surprisingly, the budget for advertising on Amazon grows with sales volume. About 7% of sellers with more than $2 million in sales spent more than $1 million in advertising, compared with less than 1% of sellers earning less than $250,000 annually.
One of the top three biggest fears sellers have is Amazon will compete with them for sales. Some 52% are fearful of Amazon taking away their selling privileges, 50% are concerned with rising fees, and 45% are fearful that the marketplace would compete with them. Negative feedback from reviewers at 42% and their accounts being hijacked at 26% round out the top five fears, according to the survey.
Nearly half of consumers -- at 48% -- have less than two years of time selling on Amazon. Most have few employees, yet respondents to the survey said majority of their ecommerce sales take place through Amazon. More than 60% said Amazon sales comprise more than three-fifths of their sales, and nearly 50% sell almost exclusively with Amazon, making up 80% to 100% of their sales.
Today, those who sell on Amazon also sell mostly on eBay, at about 65%. Some 39% said they also sell merchandise on their own Web site. About 15% sell on Shopify; 11%, Etsy; 10%, brick-and-mortar stores; 9%, Walmart; 8%, Jet; 6%, Rakuten; and 5%, Sears.
The plan, they said, will be to expand to other channels this year. Walmart was the leading channel, with nearly 30% of respondents saying they hope to expand to sell through the mega retailer's site.
Nearly one-fifth of merchants sell only private-label items. Last year, 65% of respondents sold less than $250,000 through Amazon. To date in 2017, 72% said they expect to sell that much through the site in 2017.
Those who use Fulfillment by Amazon (FBA) make higher profit margins compared with those who do not, according to the survey. Two options for fulfillment through Amazon are FBA or Fulfilment by Merchant (FBM). For example, more than 27% of sellers who sold at least half of their inventory through FBA saw a 21% to 30% profit margin, compared with 21% of sellers who primarily sold with FBM.