Online retail has come a long way, generating an estimated $4.2 trillion worldwide, and accounting for over 18% of total retail sales in 2021. Those numbers are now drawing a great deal of attention to Amazon sellers at every level.
Amazon, one of the earliest, and easily the largest e-commerce marketplace in the US, made it much easier to sell online for many businesses. And with more 2 million active Amazon sellers worldwide -- 536,000 having just joined the platform in 2020 -- Amazon entrepreneurs are playing an increasingly key role in expanding the breadth of products available to buy online.
Early successful Amazon sellers were business owners that had a good product, managed their fees, and generated profits. With profits secure, then came the drive for expansion, which was abetted greatly by Amazon’s explosive growth. 2021 brought a slew of supply chain challenges and the announcement of new FBA fees that prompted smart sellers to up their game with margin optimization and inventory control. But what does it mean to be a successful Amazon seller in 2022?
2021 Marks Record Year for Amazon Investors and Institutional Capital
The investment community is pondering this question as well. Acquisition and aggregator brands, including Quartile clients like Thrasio, have raised billions in order to locate and grow brands and sellers with the potential to be category leaders. As such, many Amazon sellers are firmly focused on scale to increase their revenues within marketplaces and drive their business’s valuation.
The founders of Quartile have been preparing for this moment since the days when they themselves were sellers on Amazon. Recognizing the potential of the marketplace, witnessing the pivotal role of advertising, and experiencing the limits and futility of managing ads manually, they began building a machine learning foundation through the granular tracking of consumer touchpoints, from search traffic, ad impressions, clicks and finally, sales. The powerful AI-built from that data would go on to become a best-in-class solution for other Amazon sellers. As we enter 2022, the advantages provided by AI are now seen as prerequisites.
With newfound investor interest solidifying, the rise of aggregators, and major advancements in Amazon seller metrics, the bar has been raised significantly. Ambitious sellers must take advantage of the latest technologies to appeal to attract online buyers and investors alike:
Optimize Margins Through Keyword Analytics and Targeted Ads
Not all sales are created equal. Shipping costs are determined by destination, some buyers are more likely to increase overhead with returns, and advertising cost of sale (ACoS) varies greatly by day and time. With Quartile’s AI-driven optimization platform, guesswork has been removed from the equation, and unprecedented efficiencies can now be built into sales and marketing operations with minimal effort.
Secure Valuation by Getting Command of Metrics
A serious asking price needs strong facts to back it up. Potential investors have entered the space and developed fluency with the metrics. Prior to entering into an acquisition conversation, crunch the numbers in order to secure full clarity on costs, goals, target demographics, and long-term strategies. This clarity is essential for knowing a company’s worth, determining valuation, and declaring it with confidence.
Build a Data Enterprise with Machine Learning
Emerging technologies, such as deep learning and Artificial Intelligence, are a vital part of Amazon's success. They enable cheaper and more effective advertising, faster order fulfillment, and a better customer experience. And most importantly AI enables the collection of proprietary data needed to secure long-term vision, propel a successful marketplace forward, and drive the buyout price sky-high.
Once upon a time, Amazon success was attainable to all entrepreneurs with a brand vision, good products, and a steady supply chain. That “no qualifications needed” playing field eventually necessitated the need for criteria to be utilized by external audiences and the investment community. With greater visibility comes greater scrutiny, and Amazon success stories in the future will center on those sellers who have embraced both the long-term strategic vision and the scale of technology-enabled advertising.