Podcast Episode 118 – Amazon FBA Predictions for 2022 (And Beyond)

Today we hear about Stephen and Rebecca’s predictions for Amazon in 2022 and what they mean for FBA sellers like you. The first five predictions are covered in-depth, with the potential impacts (positive and negative) on FBA sellers discussed for each.

These include changes to Amazon seller guidelines, an increase in online buyers, why retail arbitrage is not dying, why Amazon is building more fulfillment and distribution centers, and how Amazon is going to improve its advertising in 2022.

Next, we launch into a lightning round, where we hear some rapid-fire predictions and comments around what else 2022 might (or might not) bring for an FBA seller. Don’t miss out on this exciting episode!

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Key points from Episode 118:

• What Stephen and Rebecca base their predictions on.
• Why Amazon is expected to continue to tweak their seller guidelines to encourage faster sales and less storage time.
• Our prediction of the number of buyers registering for Prime this year.
• Why sellers assume that retail arbitrage is dead, and why these assumptions are incorrect.
• The benefits of Amazon building more fulfillment and distribution centers.
• How Amazon will improve its advertising in 2022.
• Addressing the issues with the Amazon algorithms.
• Why Amazon is going to continue to dominate e-commerce.
• Amazon’s continued reliance on third-party sellers.
• If this is the year we are going to see delivery drones.
• The predicted fee increases, and what this means for FBA sellers.
• Our prediction on Amazon crossing paths with cryptocurrency.
• And more!

Links and resources mentioned in this episode:

• Amazon’s Guidelines
• How to Improve Your IPI
• Retail Arbitrage Tips – Free ebook
• Join our newsletter and never miss out on what’s going on in the Full-Time FBA world!
• The Full-Time FBA Facebook Group
• Full-Time FBA on Instagram

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Episode 118 Transcript:

[INTRODUCTION]

[0:00:01.8] ANNOUNCER: Welcome to The Full-Time FBA Show. In each episode, it’s our goal to help you turn part-time hours into a full-time income, selling almost anything on Amazon. Now, your hosts of the show, Stephen and Rebecca Smotherman.

[00:00:20] STEPHEN: Welcome to episode number 118 of the Full-time FBA Show. Today, we’re going to be talking about Amazon FBA predictions for 2022 and beyond and how they impact you. With me to talk about these predictions is Rebecca, my cohost and wife. What is up, Rebecca?

[00:00:38] REBECCA: Hey there. I’m really excited about this topic. There’s a lot of things that nobody knows what’s going to happen in 2022. That’s a little bit scary in some ways, but I’m excited to be talking about what we see coming down the road in 2022 for selling on Amazon.

[00:00:53] STEPHEN: Yup. I predict this is going to be a fun episode. So there’s my first prediction.

[00:00:56] REBECCA: There you go.

[00:00:57] STEPHEN: We’ll see how that turns out. So, yeah, we’ll talk about predictions on this episode of the Full-time FBA Show.

[DISCUSSION]

[00:01:05] REBECCA: So we’re already a couple of weeks into 2022, and we are looking at this episode. What things do we think might be coming down the road for Amazon FBA sellers? What might be going on in Amazon in general? Now, we’re going to be talking about some things that are just our ideas. We don’t necessarily have some sort of inside scoop on certain things. It’s just we pay attention to the news. We pay attention to what’s going on in communications from Amazon to sellers. We just kind of are looking at trends and making our best estimates on these predictions. So don’t quote us on any of these because we really don’t have any sort of insider knowledge. We’re just doing our best to figure out what we think is going to happen and on sharing that with you here, so you can plan accordingly.

[00:01:54] STEPHEN: Yeah. So we have a lot of predictions. Some of them will go into some details about these predictions. Some of them will be more of a lightning round, or we’ll just kind of buzz through some. But, again, yeah, we like to watch trends. We like to see what’s happened in the past to best predict the future. So the first prediction that we have, and this might be a no brainer, but, hey, it’s something to keep an eye on, is that Amazon will continue to tweak their seller guidelines and expectations so that sellers are encouraged to focus on more faster terms. That means faster sales. That items spend less time in fulfillment centers. Amazon had long-term storage fees and IPI and storage limits and the stock limits, all these different types of things to encourage people to only send inventory to Amazon that’s going to sell super-fast and not be a long-term storage solution.

Amazon’s IPI as of now is 400. If you have under 400 score, then your storage limits will be in place. But if you have over 400 IPI, you have unlimited storage when it comes to the space. Now, there’s still going to be some limits when it comes to the number of items you can have in stock for particular items. But, again, Amazon’s going to continue to tweak this. The IPI might go up. It might go down. They might get rid of it altogether. It’s something that they’re trying to do to help us become better sellers, and this weeds out hobby sellers, the ones that are just here to be the occasional seller. If you’re selling on Amazon, you need to focus on it being a real business to make it work because Amazon’s just not going to be the place for a hobby seller to be at.

[00:03:23] REBECCA: Yeah, there are other places that are great for hobby sellers. If you’ve got things that you think are going to take a long time to sell, and you’re just going to see how that works. But we base this prediction on what’s happened in the past. Amazon is constantly tweaking their guidelines in their expectations. Refining them, I guess, I should say. Not just tweaking them. It’s not like they’re just doing it for fun. But they’re refining what they expect from sellers in order to fit what’s going on in the world today and to make the warehouses run more smoothly.

Our second prediction, speaking of what’s going on in the world today, is that there will just continue to be more and more online buyers who are going to be coming to Amazon and potentially more Prime buyers who might have shopped occasionally online in the past but are subscribing to Prime. This is just based on the historic growth that we saw in 2021 of more and more online shoppers. This is just a further extension of 2020, and all this happened with the changes in the world with the pandemic and supply chain. Online habits have just been solidified in these last couple of years. For shoppers who might have been hesitant to buy online in the past, it has become more and more necessary for them to do so, and it’s just going to increase. The dependence on online shopping is not going to go away. There are still going to be skeptical buyers out there, but they’re going to be fewer and further in between.

So this is a great time to continue looking into starting. If you haven’t started yet to sell on Amazon, it’s a great time. If you’re wondering, “Am I too late,” no, you’re not too late. There is still room for more sellers who are dedicated to building up a long-term sustainable business, and there’s the potential for you to have a really great customer base through Amazon. If you come at it the right way and are approaching selling as a business in that you’re taking it seriously and wanting to put in the hard work and the dedication, you truly can start now or expand from where you are now and build up a full-time income through selling on Amazon.

[00:05:28] STEPHEN: It’s a great time to start becoming a seller on Amazon because the customers are coming, and they want to buy your stuff. So start selling if you have not started yet, and a great way to do that is with our course, JumpStart Amazon. Fulltimefba.com/jumpstart will set you up for success.

The third prediction that we have for 2022 and beyond when it comes to Amazon selling is that more sellers will assume that retail arbitrage is dead. The rumors of the death of retail arbitrage have been going on for years. But even more so it just seems like it’s ramping up right now. I mean, there’s a misunderstanding that Amazon does not accept receipts when it comes to reimbursements or when it comes to proving authenticity. Well, that’s just not true. Amazon will accept receipts if it’s got the UPC of a particular item on that receipt, and you have that also be proof of authenticity.

Now, Amazon will not accept store receipts when it comes to getting ungated or approved to sell certain brands on Amazon. But they will accept a receipt, again, with a UPC on that receipt when it comes to reimbursements and when it comes to just proving authenticity. So retail arbitrage is not dead. Now, of course, you want to make wise decisions when it comes to retail arbitrage, especially since we’re still in the middle of a pandemic, of the choices that you make. But RA is not dead.

[00:06:47] REBECCA: Our fourth prediction is that Amazon will in 2022 and beyond continue to build more fulfillment centers and distribution centers around the US and around the world. We are basing this on the fulfillment center that is being built down the street from us. Not just that, but they’re being built everywhere. Yeah, there is one that we can see. It’s on the freeway not far from where we live. Yeah, we can see it from down the street. It’s kind of freaky that we’ve been selling on Amazon this long. All of a sudden, there’s this fulfillment center just right there.

Anyway, there will be more fulfillment centers that you will be able to ship to in the future. This will also mean that there will be more distribution centers that will spread your inventory out across the United States, and this comes with growing pains. We’ve had stuff that we’ve sent in to FBA that’s been waiting for a new fulfillment center to open, and it’s just kind of stuck there. These fulfillment centers and distribution centers, when they open up, they have employees that will need to be trained. There’ll be growing pains as far as mistakes that might be made or time frame of checking inventory in and stuff like that. So it’s something that we need to be aware of.

It’s a good thing overall for us to be able to have our inventory spread out more across the US so that it can get to customers faster. That means that Prime shipping is even more attractive to Prime buyers. With that comes the knowledge that we also need to be patient when these new centers are opening up and be patient with how the rollout of these centers is being carried out, and that it could have an impact on us in the short term for how our business is impacted when a new center opens up and our inventory isn’t there.

[00:08:34] STEPHEN: Yeah, definitely. I mean, more fulfillment centers means more space for more inventory. So that’s always good for sellers. Having it spread out across the country means the customer gets it faster, just like Rebecca said, and that’s a huge positive thing.

All right, so a fifth prediction that we have about 2022 and beyond is that Amazon advertising is going to get even better. Now, Amazon advertising, it’s already pretty good. But Amazon’s put in place some really good things that have caused it to improve. I don’t know if you know this, but Amazon is the third largest ad platform online. I think number one is Google. Number two is Facebook. Amazon is the third largest. So on the advertising side of things, Amazon is continuing to improve that platform, adding new features, like directly harvesting keywords from the campaigns and better reporting for sponsored display ads, a lot of stuff. The next big thing for Amazon ads I think is going to be exactly these types of ads; further integration, adding more features, more insight, more reports, more levers that you can pull to kind of optimize exactly what you want, and just Amazon even advertising off of Amazon to bring people to Amazon from other online places. Not just advertising your inventory on Amazon.

If you’re curious about learning more about advertising on Amazon, next week on the show, we actually have Gillian Zimmerman, who’s coming back on the show and she’s going to be talking to us about advertising on Amazon and what that’s like for resellers. It’s not just a place for people doing private label or big-name brands to advertise. No, resellers like you and me can take advantage of advertising on Amazon to sell the things that we’re buying with retail arbitrage, online arbitrage, or wholesale sourcing. So advertising is getting better. It’s awesome. I can’t wait for the future of Amazon advertising.

We’re going to kind of transition into a lightning round. We’re going to go through some of these next predictions a little bit quicker and to kind of give you an idea what we think is coming around the corner.

[00:10:23] REBECCA: Okay, our first lightning round topic that we wanted to cover is that Amazon’s algorithm is getting more and more noticed out in the wide world, and that there’s going to be more and more attention on whether or not that algorithm is working well. This is going to be evidenced, and we’ve already seen some lawsuits, investigations both into what’s going on for FBA sellers and also for workers within the warehouses and how some different HR stuff is handled. So that’s kind of vague and fuzzy. We won’t get into much more detail on that because it is the lightning round, but be looking in the news for things that are going to come up with the Amazon algorithm and what Amazon might need to do about that in the future.

[00:11:02] STEPHEN: Yeah. Hopefully, Amazon is noticing that their algorithm is not to be dependent on 100%, and maybe they need to get some humans making some decisions at the final moment. So the next prediction lightning round is that Amazon is going to continue to dominate e-commerce. It’s already the number one place people search for. When it comes to things to buy, they passed Google a couple of years ago. When it comes to starting an online shopping experience, Amazon is just going to continue to grow and get even bigger. That’s awesome and a thing to look forward to when it comes to us as resellers.

[00:11:31] REBECCA: Also, there’s going to be a continued reliance by Amazon on third-party sellers. That’s us FBA sellers and also merchant-fulfilled sellers but predominantly FBA sellers. A few years back, Jeff Bezos said that third-party sellers are kicking our butt in regards to Amazon as a seller, and that’s just going to continue. They need us as third-party sellers, and so they’re going to continue to find ways to make that work well for us and for them.

[00:11:58] STEPHEN: Yeah. Any rumors of Amazon trying to get rid of third-party sellers — don’t know why. They would lose so much of their profits and ability to serve the community with inventory if third-party sellers were gone. Another lightning around prediction, Amazon, they’re going to continue to deliver even more packages themselves, less UPS deliveries, less US Postal Service deliveries. They’re going to continue to ramp up, and more of those Amazon trucks are going to be showing up around the world, delivering packages directly. That kind of direct delivery is actually going to save us some money when it comes to delivery charges, so that’s a good.

[00:12:30] REBECCA: Is this the year we’ll see drones?

[00:12:31] STEPHEN: No, we’re not going to see drones this year. We’re predicting no drones this year. Maybe a future episode we’ll talk about drones.

[00:12:3] REBECCA: Okay. Our other prediction is based on obviously the past fees will increase. This is something that happens every year. It’s not going to be a shocking year that it does not happen this year. This is to be expected in any type of business, especially with the situation that’s going on in the world with inflation right now. But Amazon’s not really out to just continue to profit more and more off of our fees. These fees are providing a service. By those fees, we are paying for a service. With increased fees, we can also increase our prices. So with the increase of prices all around the world right now, just expect that fees are going to go up, and our prices will likely need to go up as well.

[00:13:18] STEPHEN: Yeah. If you have the right perspective, sometimes you can even see some of their fees are actually really low, in comparison to how other people charge on certain aspects.

[00:13:26] REBECCA: Yeah. For what you’re getting, you’re getting a really great deal for having your business like pretty much basically completely outsourced.

[00:13:33] STEPHEN: Yes, exactly. All right, the last prediction that we have for this year is that cryptocurrency and Amazon are going to team up. I really think that Amazon is probably already in the works of trying to figure out how to accept cryptocurrency as payment for inventory on Amazon. I mean, Tesla, AMC Theatres, Dallas Mavericks all have in common, they are starting to accept cryptocurrency. So as it comes more commonplace, and people will start to understand it a little bit more, I think Amazon is going to start to add that maybe this year, maybe next year. But I really think that someday soon, you can start buying things with cryptocurrency on Amazon.

Who knows? Amazon might even come up with their own crypto coin themselves, Amazon coin, AMS coin. I don’t know what it’s going to be called. But they might do that as well. I have no idea if they’re going to start paying Amazon sellers cryptocurrency as part of their disbursements or whatever if that becomes an option, but we’ll keep our eye on things and let you know if we learn anything new about that.

[00:14:27] REBECCA: All right. So that wraps up the predictions that we have for the year 2022 and what it means for us as Amazon FBA sellers. If you have any predictions, we’d love to hear about them in the show notes for this episode. So be sure to check out the show notes, fulltimefba.com/118, because this is episode number 118. We would love to hear from you. Leave us your comments.

[END OF DISCUSSION]

[00:14:50] REBECCA: All right, like I said, you can find the show notes for this episode at fulltimefba.com/118. Any links that were mentioned and the transcript for this episode can be found on that page. You can also go there to sign up for our newsletter. Be sure that you’re signed up so that you get an email every week in your inbox. Letting you know the latest information that we have from Amazon, any tips and tricks through blog posts videos, other podcast episodes will come to your inbox every week if you’re subscribed. Be sure to do that, fulltimefba.com.

[00:15:21] STEPHEN: Next week on the show, I’m going to be talking to Joanne Zimmerman, and she’s going to talk with us about how resellers like you and me can advertise on Amazon for increased sales, increased profits. Advertising is not just for private label or big-name brands. You and I can resell items on Amazon and advertise those items and be able to make really good money, thanks to advertising. She’ll break it down next week on the Full-time FBA Show.

[OUTRO]

[00:15:46] ANNOUNCER: That’s all for this episode of the Full-Time FBA Show. So head over to fulltimefba.com/podcast where you’ll find the show notes and links from this episode. While you’re there, subscribe to our newsletter where you’ll get several free downloads of our popular and helpful Amazon FBA resources. Now, take action on what you’ve learned today, so you can find success at turning part-time hours into a full-time income with Amazon FBA.

[END]