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Amazon Seller Insights: Today's Numbers Revealed

Threecolts
Geri Mileva
Published
January 19, 2024
Modified
January 19, 2024
Amazon Seller Insights: Today's Numbers Revealed

Finding someone unfamiliar with Amazon is quite unimaginable. With its global reach and massive user base, it’s THE platform that can allow businesses and entrepreneurs to thrive online. But because of its popularity, the challenge is not just finding products to sell on Amazon but also standing out amidst the millions of sellers on the site. The exact number of Amazon sellers is constantly changing. As of 2023, there are over 2.4 million sellers, with over a million from the US.

With its extensive seller base worldwide, new Amazon sellers may face fierce competition. However, you can stay competitive and navigate through the platform using the right seller tools like SmartRepricer, InventoryLab, and TacticalArbitrage. But first and foremost, understanding Amazon numbers is crucial.

1P and 3P Amazon Sellers

Evaluating the current number of active Amazon sellers shows the marketplace’s vast scale. Amazon provides diverse selling options, including first-party (1P) vendor sales. First-party vendors sell to Amazon directly via Amazon Vendor Central. In this method, vendors send inventory to Amazon, letting the platform handle pricing and display “ships from and sold by Amazon.com” on listings. Advantages of 1P sales include wholesale purchases, priority selling, and building brand trust through Amazon’s esteemed seller status.

Selling your products directly to Amazon as a first-party vendor has some notable drawbacks. One primary concern is the inability to engage with your customers directly, and you also have restricted control over how you price your products. Opting for Vendor Central means you might experience a lack of insight into the sales process and a diminished sense of ownership over your brand. Additionally, there’s the risk of facing lower profit margins and the potential of selling your products below the Minimum Advertised Price (MAP) guidelines, all due to the wholesale arrangement with Amazon.

Conversely, Amazon enables third-party (3P) sales, letting individuals and professionals join its marketplace. 3P sellers manage orders through Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Products can be displayed as “sold by MERCHANT and Fulfilled by Amazon.” At times, it will also note that the transaction is fulfilled by the merchant.

A study reveals that 89% of Amazon sellers are profitable, with 63% reaching profitability within a year. Additionally, 22% of SMB sellers achieve over $10,000 in average monthly sales, showcasing the potential for success. Third-party sales offer sellers a strategy to address certain drawbacks of first-party sales, such as enhanced margins with improved pricing control, more favorable payment terms, and reduced dependence on the Amazon relationship. In Q3 2023, 60% of paid units were sold by 3P sellers.

1P and 3P Amazon Sellers

Amazon employs 1P and 3P models to provide customers with diverse products at competitive prices. Generally, Amazon 1P suits high-volume and branded items, while Amazon 3P is ideal for unique or niche products not commonly found in traditional retail channels.

Amazon Marketplace Figures

Once a modest online bookstore, Amazon is now a global powerhouse with 2.3 billion web visits in April 2023. And that traction shows in various ways. For instance, consumer data indicated a clear preference for Amazon during the 2023 Black Friday period - with six out of ten shoppers choosing it for its best deals, with significant market share in the US and the UK. Shipping nearly 16 million packages daily, Amazon reinforces its dominance in eCommerce through a vast product selection and competitive pricing.

Undoubtedly, Amazon stands out as the global choice for customers, meeting various needs, from advanced tech gadgets to essential household appliances. The eCommerce platform has also ventured into finance, self-publishing programs, and over-the-top platforms. And so, while many moving parts help make your Amazon venture a success, penetrating the market is doable. 

For new Amazon sellers, especially, the figures are promising:

  • Earning potential: Most make $1,000+ monthly, and top sellers reach $100,000+.
  • New sellers: Average annual profit of $30,000.

It’s worth noting that not everyone achieves equal levels of success. Specifically, 22% of sellers make less than $500/month, and 3% are uncertain about their monthly sales. That being said, starting an Amazon, even just as a side hustle, is a great way to earn passive income.

Every day, about 3,700 new sellers become part of Amazon. The top three countries with the highest number of Amazon new sellers are:

  • US marketplace: 76,769 new sellers
  • Indian marketplace: 29,798 new sellers
  • Canadian marketplace: Over 22,088 new sellers

With this continuous growth, Amazon’s popularity is soaring, providing an opportunity to reach a broader audience. However, it’s also crucial to acknowledge the increased competition. Using Amazon seller resources is a definite plus to thrive in this environment.

Amazon marketplace numbers vary across countries. Let’s look into the specifics:

Amazon US Marketplace

  • Amazon Marketplace boasts 2+ million sellers, and nearly half (47%) are headquartered in the US.
  • US sellers on Amazon shipped a staggering 4.1 billion items worldwide, averaging over $230,000 in sales each.
  • 63% of US consumers start their product searches on Amazon, with 89% opting for its convenience.
  • 163.5 million US subscribers fuel Amazon’s Prime revolution, with projections of over 176 million by 2025.

Amazon UK Marketplace

  • Amazon is the leading online marketplace in the UK, with over 374 million monthly visitors.
  • Amazon.co.uk has over 281,200 active market sellers.
  • 90% of UK adults use Amazon, and 40% of Amazon customers in the UK use Prime.
  • Amazon’s UK net sales in electronics and media are over $5 billion, representing 30-35% of the market share.
  • Amazon UK’s gross sales may reach £77.1 billion by 2025, potentially surpassing Tesco as the market leader.

Amazon enjoys popularity across various European nations, too. According to Statista, the following countries trail closely behind the US and UK in terms of active sellers:

  • Germany: 244,425 active sellers
  • Italy: 216,610 active sellers
  • France: 211,859 active sellers
  • India: 205,884 active sellers
active amazon sellers by country

In addition, Spain, Japan, Canada, and Mexico comprise the top ten countries with the highest active sellers. Across the globe, Amazon faces tough competition in Asia. Rivals like Alibaba, AliExpress, Lazada Marketplace, and Shopee dominate the Asian market. 

Looking at Amazon’s Best-Selling Products

Amazon has 30+ product categories for third-party sellers. While many categories don’t need approval, others require Amazon’s consent before listing a product. 

Let’s explore the top Amazon product categories:

  • Tools and Home Improvement: The demand is soaring as more DIY enthusiasts emerge. Experts predict a notable 4.37% growth from 2023 to 2030.
  • Toys and Games: This particular category has a constant demand. Educational and movie-themed toys are becoming increasingly popular as they offer entertainment and educational value.
  • Electronics: Electronic products have become essential for the average consumer in our technology-dominated era. Smart home appliances have experienced significant success in recent years.
  • Sports and Outdoors: Fitness essentials such as hydration flasks, resistance bands, watches, and yoga mats are on the top list for this category.
  • Home and Kitchen: Highly profitable, this category offers diverse product selections. Items that significantly enhance home living quality are in high demand.
  • Video Games: The market is projected to reach $268.8 billion by 2025, indicating a robust demand for video game-related products.
  • Camera and Photo: Products in this category enjoy widespread success, especially WIFI-enabled cameras, indoor security cameras, lighting domes, tripods, and flashes.
  • Clothing, Shoes, and Jewelry: This market is diverse and vast, with name brands, artists, and solopreneurs competing for the enormous fashion market.
amazon best sellers

Here are the top 10 product categories listed by sellers on Amazon US:

  • Home and Kitchen
  • Beauty and personal care
  • Clothing, shoes, and jewelry
  • Toys and games
  • Health, household, and baby care
  • Baby products
  • Electronics
  • Sports and outdoors
  • Pet supplies
  • Office supplies

Here are the top-selling categories on Amazon UK:

  • Gift cards
  • Electronics
  • Cameras and photography products
  • Video games
  • Books
  • Clothing and accessories
  • Beauty products
  • Home and Kitchen
  • Pet supplies
  • Sports and outdoor

Distinctive Features Among Amazon Categories

Various factors contribute to their uniqueness when navigating through Amazon’s diverse categories. Let’s delve into these critical differentiators:

Sales Expertise

The skills necessary for successful selling vary based on the category of your chosen product. Group A categories demand a seasoned approach, while Group B is more beginner-friendly. 

Group A categories include apps and games, automotive parts and accessories, industrial and scientific products, and musical instruments, which almost half of sellers with advanced expertise prefer. Group B examples are toys and games, books, electronics, and appliances, chosen by about 27% of new sellers as their starting point.

Sales and Business Models

These are the various business models available for sellers on Amazon:

  • Online Arbitrage: Strategic acquisition of discounted online products for resale on Amazon, maximizing profit through opportunistic buying.
  • Private Label: Developing and marketing unique branded products, fostering customer loyalty and potentially higher profit margins.
  • Dropshipping: Order fulfillment through intermediaries, managing customer interactions without inventory, and minimizing upfront costs.
  • Retail Arbitrage: Purchase discounted in-store merchandise for online resale, leveraging bargains and online reach.
  • Wholesale: Bulk purchase of discounted goods for individual resale, prioritizing volume discounts and efficient inventory management.
  • Handmade: Direct sale of personally crafted products on Amazon, capitalizing on unique creativity and consumer connection.

Monthly Sales Potential

On average, sellers have the potential to earn between $1,000 and $25,000 from each category. However, it’s essential to note that categories like handmade, books, and cell & accessories typically yield monthly sales under $1,000. Conversely, categories such as Musical Instruments, Computers, and Industrial & Scientific have the potential to generate over $50,000 for sellers.

Profitability Insights

Regarding profitability, profit margins can range significantly, spanning from 16% to 32%. Despite the slightly higher costs associated with raw materials and time investments, handmade products emerge as the most lucrative, boasting a 32% profit margin. Here’s a breakdown of the top five Amazon categories ranked by average profit margin:

  • Handmade: 32%
  • CD and Vinyl: 27%
  • Apps and Games: 25%
  • Industrial and Scientific: 25%
  • Luggage & Travel Gear: 25%

Amazon Fulfillment Options

Amazon provides sellers with these fulfillment methods:

Selecting the Best Product Category for Amazon Sales

Setting up your Amazon seller account is quite easy, even for first-timers. But the real challenge is choosing the right product category to maximize your sales. Research is vital, covering product selection, competitor analysis, understanding customer preferences, and crafting effective advertising strategies. Here are essential tips for your product selection journey:

Profit Margins Analysis

Dig into the all of the costs — manufacturing, shipping, advertising, and storage fees. Choose products where your selling price comfortably covers all costs, ensuring a robust profit margin. It’s like discovering golden nuggets and optimizing your return on investment while delivering fair value to customers.

Customer Insights from Reviews

Embrace the collective wisdom of customer feedback. Immerse yourself in product reviews, not just the glowing accolades but the detailed critiques. These reviews are invaluable mines of information. Identify recurring pain points, missing features, and desired improvements. Use this insight to refine your product, turning customer feedback into a strategic advantage.

Optimal Size and Weight

Bear in mind Amazon’s storage is finite, impacting shipping costs. Prioritize compact, lightweight products without compromising quality. Streamline packaging, explore lighter materials, and consider collapsible or modular designs. A trim product means lighter wallets for both you and your customers.

FBA Compatibility Check

While FBA can be influential, not every product syncs with its rhythm. Evaluate compatibility before committing. FBA excels with fast, standardized items. If your product demands special handling, has slow turnover, or faces uncertain demand, FBA might not be the best fit. Weigh the advantages and disadvantages, explore alternative fulfillment options, and strategically decide on a seamless, efficient operation.

Amazon-Labeled Challenges

Facing Amazon’s brands is confronting a formidable foe. Their vast resources and preferential treatment in the marketplace make them formidable rivals. Choose products in distinct niches, offering unique functionalities or targeting specific demographics. 

Crowded Category Caution

Entering a saturated Amazon category means advertising costs soar, visibility diminishes, and standing out can be challenging. If venturing into these crowded shores, craft a solid strategy. Introduce a game-changing twist, foster a loyal community, or deploy targeted marketing to claim your spot.

A Set of Criteria

Adhering to a set of criteria makes judging potential products more manageable and systematic. Here are some examples to consider:

  • Identify market trends without succumbing to fleeting fads. Prioritize top-selling products with sustained demand.
  • A product averaging at least ten daily sales signals market demand—consider such products for your inventory.
  • Go for products with consistent year-round demand for sustainable growth. While seasonal items can bring profits, prioritize perennial sellers.
  • Don’t overlook international markets for expanded opportunities.
  • Leverage resources like Threecolts with products and solutions to uncover in-demand products, emphasizing low competition and monthly sales volumes.
  • Choose economical products for manufacturing or acquisition.
  • Avoid fragile, perishable, or prone to damage, as shipping them can be challenging.
  • Thoroughly assess product quality before purchasing, especially for Amazon FBA sellers.

Maximizing Your Amazon Sales with Advanced Strategies

If you’re already an experienced Amazon seller, unlocking new avenues for income growth is always possible. Here are advanced tips to elevate your business:

Utilize Data Analysis

Make the most of Amazon analytics tools to discover profitable niche expansions. Refine product listings meticulously by optimizing keywords, titles, descriptions, and pricing. Proactively anticipate inventory needs to avoid stockouts.

Embrace Automation

Enhance efficiency with automation tools incorporating dynamic repricing based on competitor rates and demand fluctuations. Streamline inventory management through automated reorder points and purchase orders. Optimize customer service with auto-responders and chatbots.

Expand Your Product Catalog

To reach more customers, it’s a good idea to offer a variety of products. Identify related or complementary products aligned with your niche. Stay ahead of industry trends through thorough market research.

Diversify Sales Channels

Expand your business beyond Amazon by creating a website to have more control over your brand, prices, and customer relationships. Check out other online marketplaces like eBay or Etsy, or use social media eCommerce platforms to reach more people.

Build Customer Loyalty

Cultivate loyalty through strategic initiatives, including enticing loyalty programs and exclusive discounts. Provide personalized product recommendations based on individual purchase history. Offer prompt and proactive customer service to enhance overall satisfaction.

Foster a Culture of Experimentation

Cultivate a culture of ongoing experimentation, validating new product ideas through controlled experiments. Polish marketing campaigns for optimal performance and implement pricing strategies to balance conversions and profitability.

Stay Informed and Proactive

Maintain vigilance by staying informed about industry dynamics. Monitor Amazon ecosystem changes, keep up with emerging trends and technologies like voice search optimization, and analyze competitor activities to enhance your competitive edge.

Final Thoughts

Remember, as we pointed out above, 89% of Amazon sellers are profitable, with more than half earning profit margins higher than 15%. Starting small is a prudent approach, as success on Amazon hinges on factors like product selection, gradual scaling, effective advertising, streamlined operations, reinvestment, adaptability to eCommerce shifts, financial understanding, and patience. Your recipe for success in a marketplace teeming with competitors involves blending hard work, uniqueness, and leveraging the best Amazon resources.

Threecolts is a platform dedicated to equipping Amazon sellers with the necessary tools and knowledge to succeed in their businesses, whether they operate as private-label enterprises or are first-time sellers.