After working alone for 4 years, I bought a car and a house in Shenzhen. The current living situation of Amazon sellers

Some Amazon sellers bought cars and houses in Shenzhen after working on their own for 4 years, while others lost all their initial investments and ended up abandoning their stores and running away.

Sellers on the Amazon platform have different experiences. 68% of sellers can make a profit within one year of working alone. At the same time, the issues that Amazon sellers are most concerned about are relatively concentrated, which may be the basic factor for some sellers to withdraw.

Working alone on Amazon, sellers face completely different living conditions

As the end of the year approaches, many cross-border sellers are doing year-end summaries. Recently, I saw a cross-border practitioner share his summary of working alone for 4 years in the Zhiwubuyan community . For the same platform, everyone has different results.

One seller said that he and his friends started to sell on Amazon in early 2020, each of them invested 250,000 yuan. After experiencing the darkest moment of the account suspension in 2021, things started to improve. After constant exploration and persistence, the profit was about 900,000 yuan by the end of 2021, 1.6 million yuan in 2022, 2.5 million US dollars in 2023, and a net profit of about 3 million yuan. The goal for 2024 is to make 3.5-4 million US dollars, with a net profit of 4.4-5 million yuan.

Another colleague who also started working with Amazon in 2020 had a similar experience. He had to break up with his partner, fight with the police, cut product lines, and start all over again. He bought a house and a car in Shenzhen in 2024 with full payment.

Amazon platform helped some people to succeed in entrepreneurship, but also made others feel cold. Using the same platform and entering the market at the same time, some people had completely different endings four years later.

Having also worked alone for 20 years , one seller said that he had lost all his investment of 50,000 yuan and was determined not to work alone again. Another seller lost all his investment of 40,000 to 50,000 yuan after losing his job, and his inventory and funds were frozen due to copyright infringement, so he had to abandon his store and run away.

New sellers enter the Amazon platform every day, and a group of people also exit. As of 2022, there are about 9.5 million Amazon sellers worldwide, of which 500,000 are located in the United States. In the fourth quarter of 2022, 59% of total sales came from third-party product sales.

Among all sellers, 30% of small and medium-sized enterprise sellers are first-party sellers, 70% are third-party sellers , and 7% of Amazon sellers are engaged in both businesses.

As of 2023, the top three sources of funding for Amazon sellers going it alone are self-financed (77%), credit cards (27%), and business loans (15%). Most sellers start with more than $10,000 in starting capital and it takes 3 to 6 months to gradually start placing orders.

More than half of Amazon sellers, or 58%, price their products between $16 and $50 on average. 51% of sellers sell 10 or fewer products on Amazon, while 35% sell 5 or fewer products . Over time, many sellers have gradually cut off unprofitable product lines and moved closer to the boutique model.

The US market is still the world's largest market and the main battlefield for domestic cross-border sellers. The total global traffic generated by sell.amazon.com was 3.05 million in November 2023 and 2.64 million in October 2023, a positive growth of 15.53%.

In the last six months of 2023, the highest traffic generated by sell.amazon.com came from the United States, India, Canada, the United Kingdom, and Mexico. Mobile traffic accounted for 75.39% of the total traffic, and PC traffic accounted for 24.61%. It can be seen that the traffic on the mobile side is huge, and as a seller, you must pay attention to the traffic on the mobile side.

Amazon sellers are also concentrated in countries with high traffic, with the top three countries being the United States ( 55%), the United Kingdom (7%) and Canada (6%). 86% of sellers use Fulfillment by Amazon (FBA), while 37% use self-delivery.

By 2023 , the United States, Canada, the United Kingdom, Mexico, and Germany are the top five markets for Amazon sellers, accounting for 83%, 24%, 18%, 12%, and 10%, respectively. The three most popular sales models for Amazon sellers are private label (54%), wholesaler (26%), and retail arbitrage (25%).

68% of sellers are profitable within a year and are most afraid of cost increases

The most important issue for Amazon sellers is profitability. Data shows that on the Amazon platform, 68% of sellers can achieve profitability within less than one year after starting their business.

On average, 55% of small and medium-sized sellers have a profit margin of more than 15%. This is a statistical data. According to actual feedback, many domestic sellers have not achieved a profit of 10% in 23 years. 47% of small and medium-sized sellers have a lifetime profit of $100,000. In reality, many people's profits are higher than this figure.

What categories do sellers who make money on Amazon sell? According to statistics, home and kitchen (32%), beauty and personal care (26%), and clothing, shoes, and jewelry are the most popular Amazon product categories for small and medium-sized sellers in 2023 , and they are also relatively profitable categories. The 3C category that helped domestic sellers get started has performed worse and worse in the past two years, and mobile phones and accessories are relatively poor performing categories worldwide.

In 2023, sellers will make the most money on Black Friday sales , which is the shopping event with the largest sales growth for Amazon sellers in the United States , contributing 34% of sales, while other events contribute as follows: Prime Day (17%), Cyber ​​Monday (13%), Thanksgiving (10%), New Year's Day (7%), Prime Early Access sales (6%) and Super Sunday (5%).

As advertising investment for holiday promotions and normal operations increases, sellers' profits are also diluted. 38% of small and medium-sized sellers said that the increase in advertising costs is the most worrying issue, and PPC advertising is the most common problem. By 2023, e-commerce platforms will be the most commonly used advertising channel, accounting for 59%.

Facebook Ads has become a popular social media platform for sellers to advertise, with 67% of sellers using it. Other social media platforms they use include Instagram ads (49%), TikTok ads (31%), and Pinterest ads (15%) . 12% of businesses have hired influential reds to promote their brands on various social media platforms ; 24% of sellers use personal or brand social media accounts to promote their products.

In 2023, about 70% of Amazon sellers will spend less than $2,500 on advertising. Only 1% will spend between $50,000 and $100,000 ; and about 32% will spend between $2,500 and $50,000.

In addition to advertising, Amazon sellers are most concerned about the increase in commodity costs ( 46%), followed by market competition (39%) and increased transportation costs (38%). In 2023, sellers said that the main reasons affecting their business were operating costs and inflation.

In 2023, Amazon sellers not only do a good job on their own platform, but also continue to explore other third-party platforms . 52% of Amazon sellers have opened up new e-commerce platforms, an increase of 30% over last year, and 50% of sellers have opened up new international markets. Among all Amazon sellers in the United States, 45% of sellers conduct business on at least one cross-border e-commerce platform. After the account suspension wave, it is clear that everyone's thinking is to put their eggs in different baskets.

The top three platforms chosen by sellers are eBay, Shopify and Walmart. However, the proportion of Amazon sellers on eBay has decreased by 14% year-on-year. The number of sellers on Shopify and Walmart has increased by 6% and 28% year-on-year respectively.

With the popularity of full hosting in 2023, more sellers with supply chain advantages have targeted platforms such as Temu and SHEIN. Many sellers operate on these channels at the same time. In the second half of 2023, many sellers also entered TikTok and chose to develop on multiple platforms.

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