(This is the first post in our weekly series that will recap all the latest news in the Amazon world that’s most relevant to YOU as an Amazon seller, and break down what it all means for your business.)
2016 Hit an FBA-Record
It’s confirmed — FBA is going huge. Amazon announced last week that its FBA service delivered over 2 billion items worldwide in 2016. This includes an increase in 50% in FBA items shipped over the holiday season, as well as millions of items ordered by Prime members in the Seller Fulfilled Prime program.
Interestingly, the Amazon marketplace that saw the most explosive growth in 2016 was Amazon India, which reported a 160% yearly growth in sellers throughout the country.
An often overlooked aspect of this is the jobs created by FBA sellers. From the announcement:
…according to our economic studies, sellers have created over 600,000 new jobs outside of Amazon.
Whether Amazon is becoming overcrowded is a separate discussion, but there’s certainly some reassurance that comes with being part of a booming industry.
Why So Many Factories in China Are Postponing Orders
http://importdojo.com/what-is-going-on-in-china-right-now/
Chinese New Year has always presented a number of challenges to FBA sellers, but a recent air quality crisis in China has greatly exacerbated the problem.
As explained in this post from Import Dojo, the main issue facing Amazon sellers is that thousands of factories have been shut down due to environmental concerns.
While most of these factories don’t manufacture Amazon products, many of them provide the raw materials required to manufacture or package these products. Prices on these materials are quickly rising, leaving many suppliers unable to fulfill their orders on time (if at all).
The timing of this crisis, which has already lasted several weeks, will make it very difficult for sellers to have their products shipped.
Sellers should finalize their orders as soon as possible and should operate under the assumption that shipments may take much longer than usual.
It’s also imperative to maintain clear communication with your supplier and have an inspection plan in place for quality assurance, as additional pressure to finish goods on time may cause quality standards to slip.
New Shipping Option for UK Sellers?
http://uk.businessinsider.com/the-first-direct-train-between-china-and-london-just-set-off-2017-1
A weekly train between China and the UK has just set out on its first journey.
The train, carrying millions of pounds’ worth of goods, is expected to take 18 days to complete the 7,500 mile journey to London.
Though slower than air freight, the train presents an option that’s both significantly cheaper (estimated to be half the price) and quicker than a container ship.
Could this be the future for European sellers sourcing in China?
Now You Can Sell on Amazon With Shopify
https://www.shopify.com/blog/start-selling-on-amazon-with-shopify
Shopify announced this week the release of an integration that allows anyone selling in USD to easily cross-list their products on Amazon.
Sellers can now create new Amazon listings in Fashion, Apparel, and Accessories directly from Shopify, or can link existing Amazon listings in any category straight to Shopify.
All Amazon orders can also be fulfilled directly from Shopify.
This update is welcome news to both the Shopify and Amazon communities, as it allows sellers to instantly boost product visibility, strengthen branding, and diversify distribution channels.
When it Makes Sense to Join Amazon’s Subscribe & Save Program
http://www.cpcstrategy.com/blog/2017/01/amazon-subscribe-and-save-program/
With Amazon constantly launching new programs impacting sellers, it can be hard to keep track of which programs are directly relevant to your product line.
That’s why it was nice to see this reminder from CPC Strategy about Amazon’s Subscribe & Save Program, which, having started way back in 2007, predates the vast majority of FBA businesses!
The program encourages customers to sign up for recurring orders by offering 15% off eligible products they sign up to receive monthly. FBA sellers who sell in certain categories and have accounts in good standing are eligible to offer their products for subscription.
But do the numbers add up for your product specifically? According to an analyst quoted in the post:
If margins are smaller (for example 9 – 20%), then Subscribe & Save might not be the best idea. What also matters is if the seller already knows if there is a high re-order rate. If a seller knows a re-order is coming in the pipeline, then why lose that 15% (or whatever discount a seller may give for Subscribe & Save). But at the same time, a seller might gain customer following because of the program.
…
If margins are good and the seller does not have re-order data, then it might be worth testing out the program. A seller should always be testing to improve business strategies. I think the biggest takeaway from Subscribe & Save (or reorder data in general) is understanding whether customers will re-order another shipment – which allows us to push more heavily on advertising.
Tune in next week for another bite-sized report of “This Week in AMZ”
Do you have any news we might have missed? Anything we should highlight? Let us know below!
