The five biggest challenges for Amazon Sellers in 2021
It’s been over 12 months of seemingly constant growth for Amazon amid the worldwide pandemic, but recent figures suggest that is changing.
Web analytics site SimilarWeb reported a decline in total Amazon views for February and March by approximately 10 percent from January. The numbers were still up on the equivalent months last year, but has the spiralling trend finally started to change?
There are certainly specific challenges lying ahead for Amazon Sellers, as the world prepares to come out of lockdown and move back towards more traditional methods of consumer buying. Holly Sloan, a Senior Case Handler at Thompson and Holt, picks out five issues that Amazon Sellers should be aware of for the remainder of the year.
1. Shops are opening again
Thompson and Holt’s Holly Sloan: “As the world opens up again, so do its high street shops. Many of those have taken huge financial hits over the last 12 months and are now looking to make up for lost time as non-essential retail reopens in many countries. They will be desperate to get consumers back through their doors, so expect significant sales initiatives from retailers that could be your competitor.”
2. Global logistics are struggling with online demand
HS: “Europe is still wrangling with the implications of Brexit, while in America, there are reports of ships being stationed off coastlines, with all aspects of receiving and transporting goods under pressure, both in terms of the timing and cost of imports. Several brands have had issues keeping products in stock.”
3. Consumer uncertainty around worldwide economies
HS: “Right across the globe, economies are still coming to term with the vast impact of coronavirus. Each country has its own set of unique circumstances and ways of dealing with the pandemic, but virtually all of them have a significant effect on their respective economies. In turn, that can impact consumers and their spending habits, and it remains a time of considerable uncertainty.”
4. Increase in competition
HS: “The global pandemic meant that many retailers had to turn to online and platforms like Amazon just to survive. At the same time, new businesses saw opportunities in e-commerce that weren’t there previously. A combination of those two factors has meant that competition on Amazon is now greater than ever, both from established and inexperienced sellers. Being aware of who your competitors are and what they are offering is going to be more important than ever this year.”
5. Pressure on margins
HS: “Sellers are reporting that Amazon are demanding significantly higher margins and concessions - co-op marketing fees are increasing, payment terms lengthening and other services including paying for a Strategic Vendor Services (SVS) manager are being mandated. Reports even suggest that Amazon is considering that the only way to even have a full negotiation with them is to pay for SVS services. This could be a crucial change moving forward, and one to keep an eye on.”
Worried about an Amazon account suspension?
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.
Thompson and Holt are also offering a free month’s trial of their Monitor and Protect service to help sellers prevent a suspension of ASINs or an their account during the COVID pandemic, more information on how to protect your Amazon seller account from a suspension can be found here.