Well, we made it… kind of. After surviving a year packed with a global pandemic, social/political controversy, and some surprising new e-commerce opportunities, we can put 2020 behind us (where it belongs). Although we are still dealing with many of the same issues today that began last year (I like to think of them as 2020 rollover minutes), at Helium10 we are always looking forward.
Not just to the next challenges and opportunities, but through them.
Last month, you may have caught our Predictions, Plans, and Preparations series on YouTube. We sat down (virtually) with 8-figure private label sellers, CEO’s of successful e-commerce agencies, and Helium 10 product experts to help us take an educated look ahead at what the Amazon landscape (and e-commerce industry as a whole) will look like for sellers in 2021.
While predicting the future is 50% a fool’s errand and 50% sensible homework, we decided to dust off our crystal ball and focus on that latter 50%. If you missed our 2021 Amazon Predictions, feel free to catch up on YouTube. If you’d rather skim through it, we’ve assembled the highlights below.
Happy New Year and Happy Selling. 2021 is looking promising if you’re selling online.
Day 1 – Kevin King and Brandon Young (Topic – Inventory and Ranking)
First, the one and only, Kevin King. Kevin started selling on Amazon in 2001 and over the years has grown multiple brands into million dollar juggernauts. Today, Kevin speaks around the world, coaching Amazon entrepreneurs and serves as the lead trainer (and creator!) of the Freedom Ticket training program for new Amazon sellers.
Amazon sales have gone up 40% in 2020, due to the COVID-19 pandemic and resulting lockdown.
If Amazon was its own country, it would have the 50th biggest economy in the world!
BUT. Sales have been rising faster than sellers. In 2021, product niches that were previously too small are now seeing action. Product selection and differentiation is key. These factors will drive your success on Amazon.
- Prediction 1. 2021 will be the year of Amazon FBM.
In 2020, Amazon put new inventory limits on incoming shipment of products from new sellers. Instead of being able to bring in 500 or 1,000 new units, sellers are now limited to only 200. This new hurdle is directly due to limited warehouse space (because of the COVID-19 lockdown and 2020 holiday online rushes). Though Amazon may adjust sellers’ 200 limit based on sales history, this has forced many sellers to reexamine how they launch products.
Amazon FBM (fulfilment by merchant) describes the process by which you are shipping your products yourself or are using a separate, 3PL company. Note, this typically costs more than if Amazon handles it for you. However, if Amazon’s new inventory limits are crushing your growth potential, FBM spells much greater profit potential in the long run. It’s time to get creative.
- Prediction 2. Political, trade, and tariff changes with the new US administration.
Many products that come from China also come with tariffs. With a new administration in the United States this year, these tariffs have a healthy chance of being reduced. However, keep an eye out for China making their own adjustments which may cause costs to increase as well.
- Prediction 3. Amazon continues to lean towards “pay to play.”
This means fewer organic product listings on page one. Kevin wouldn’t be surprised if in the next few years, there were NO organic listings on page one (only paid listings).
PPC is going to be key this year.
An effective PPC strategy will help you not only launch products successfully but also sustain them, long term.
- Prediction 4. Amazon video advertising and marketing are going to be huge, perhaps required.
Video advertisements on Amazon already perform exceptionally well. You don’t need to be Scorsese, sometimes even a slideshow will get the job done. But in the coming year, you will start to see those who are utilizing video marketing begin to pull away from those who are not.
- Prediction 5. Brands continue to be the name of the game.
A brand is more than a trademark and a logo. A brand is how your product makes somebody feel. What emotion does your product inspire? This takes time to develop, you won’t have it perfect from the start. And that’s ok. But you do need a plan to build a brand over time, using Amazon as your launch pad. Always be thinking bigger than you currently are. The stronger your brand, the more features Amazon will make available to you. This only improves your chances of selling your brand at the end for a big pay day.
There is over 1 billion dollars in investment capital available for proven Amazon businesses. Big name investors and business owners are watching Amazon closely. This sounds like a longshot, but you’d be surprised. If you have a successful track record and profitable history with a scalable future and a powerful brand, large investors have the capital and resources to take what might be a million dollar business and turn it into a 10 million dollar business. They’ll be willing to pay (someone like you) big bucks to hand over the keys. This is not exclusive to the US — Europe is seeing something similar.
2021 will see many millionaires made. Not from selling on Amazon, but from selling on Amazon and then selling their Amazon brand.
Next up is Brandon Young. Brandon is an 8-figure Amazon seller, owner of Global imports USA inc., and Amazon private label instructor.
Amazon ranks products on four primary things:
1. Click through rate
2. Conversion rate
3. Keyword relevancy
4. Overall revenue that you generate through a specific keyword
- Prediction 1. Accuracy will be key.
Because of the aforementioned 200 unit limit, sellers in 2021 must be more precise. Use the Amazon data you get from Helium 10. Which keywords are generating sales from your competitors? Construct and optimize your listing properly so you get the maximum credit for every sale. Ranking your product in 2021 requires a scalpel, not a machete. Listing relevancy will be your #1 most important metric in the new year.
Brandon remains optimistic about the e-commerce industry as we take another trip around the sun. Amazon is still the business to be in.
