Podcast Episode 183 – Is Amazon Saturated with Too Many Sellers?

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Episode 183 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.

[WELCOME]

[00:00:21] REBECCA: Hello, and welcome to another episode of The Full-Time FBA Show. It is Episode 183 today, and we are going to be talking about whether or not Amazon has too many third-party sellers. Here to talk with me today is my favorite third-party seller, Stephen Smotherman, my cohost, and my husband, and business partner. How are you today, Stephen? Are you ready to talk about whether or not there’s too many sellers on Amazon?

[00:00:49] STEPHEN: I mean, with that introduction, I’m doing great. Thank you for that. But yes, are there too many Amazon sellers? Our answer may shock you.

[00:00:58] REBECCA: It won’t shock you.

[00:00:59] STEPHEN: Okay, maybe it won’t shock you. But some of the stuff we will talk about, you’ll find interesting and will impact your Amazon business. So, let’s get to it, in this episode of The Full-Time FBA Show.

[00:01:12] REBECCA: Well, we’ve been selling on Amazon for over 10 years, and something that we’ve heard multiple times again and again, through the years over and over from the very early days until last week.

[00:01:24] STEPHEN: Yes, and we’ve been selling for like, over 10 years. So, it’s been forever.

[00:01:27] REBECCA: Yes, we’ve been hearing, Amazon is saturated with too many sellers. Now, whether that’s actually true or not, is of course, up for debate and the topic of today’s episode. So, let’s dive into it. Stephen, we’ve been hearing this, Amazon’s saturated with too many sellers for so long. What do you think people actually mean when they’re saying this?

[00:01:48] STEPHEN: Well, the people who say this usually mean one of two things. Either they’re an Amazon seller who’s tried to sell on Amazon and didn’t work out. So, when they’re saying Amazon is saturated with too many sellers, they think that the number of sellers is just way too much in comparison to the number of customers wanting to buy on Amazon. Or there are so many Amazon sellers who are doing just fine selling on Amazon, and they think that the more sellers on Amazon equates to less for them. So, they think if I tell people Amazon to saturate with too many sellers, no one’s going to want to sell on Amazon. There will be less competition for me, which is such a limited mindset, and not at all, like the abundance mindset that we teach in our courses.

[00:02:29] REBECCA: Let’s deep dive into that, and we’re going to break down that first reason that people say Amazon is saturated. That there are too many sellers, and not enough customers. Therefore, they think that Amazon as a platform to sell on, is just not profitable with all of the competition out there. Because competition is too high. The customer demand is too low. Why do these people think that there are too many sellers on Amazon? Where are they getting that from?

[00:02:55] STEPHEN: There’s a number of reasons. Some of them are based in fact, but they’re not really understanding the facts correctly, and some of them are based in delusion. We’ll get to that in a second.

[00:03:04] REBECCA: Oh, dear.

[00:03:04] STEPHEN: Reason number one, people are saying that Amazon is saturated. A recent marketplace polls report, and we’ll put the links in our show notes, states that over 2,000 new Amazon Seller accounts are open every single day. That equates to over 60,000 a month, or over 730,000 per year. Now, with that stat alone, it seems like Amazon is saturated with too many sellers. But it’s really not, because the report goes on to state that most of those new accounts never even become active, which I assume means they’ve opened their account, but they’ve never even tried very hard at all to get some sales.

Another marketplace polls article says, “The expanding overall marketplace, GMV, which is gross merchandise volume, allows new sellers to grow without taking away from the existing seller.” Even though there are many people starting new Amazon Seller accounts every single day, the number of profits adding to Amazon every single day makes it still worthwhile when it comes to selling on Amazon. And there are not too many sellers selling on Amazon. There’s enough products to go around for everybody and there’s enough demand from customers to go around for all sellers.

[00:04:13] REBECCA: So, the people asking for a piece of the pie, there’s more and more people wanting a piece of that pie. But the pie is getting bigger, too.

[00:04:19] STEPHEN: Yes, absolutely.

[00:04:20] REBECCA: The second reason that people might be saying that Amazon is saturated with too many sellers is in 2022, it was reported that Amazon took a net loss of around 2.7 billion.

[00:04:34] STEPHEN: Billion with a B.

[00:04:35] STEPHEN: $2.7 billion net loss. So, it could be that people are looking at this thinking Amazon’s on the downhill side of its business. There’s just too many sellers on the platform. You don’t have that kind of a net loss unless something’s wrong. No one can be making any money and that’s because of too many sellers, and so Amazon had to take the loss, which none of that is true when it comes to the part about the third-party sellers. The $2.7 billion loss. That’s true. That’s documented. But that is a loss for the overall parent company of Amazon, which is not the e-commerce FBA side of Amazon.

So, remember, Amazon has its hands in so many aspects of our lives. There’s Amazon Web Services. There’s Audible. diapers.com, Zappos, Amazon Robotics, Amazon Prime Video, there’s Blue Origin, the Amazon Space Program. There’s dozens and dozens of ways that Amazon is working and branching out into different companies under the overall parent Amazon company. So, all of those overall combined took that $2.7 billion loss. But e-commerce as a part of Amazon is still growing every year.

[00:05:46] STEPHEN: The third reason why people are saying that Amazon is saturated with too many sellers is more based on delusion than facts. It’s just an easy excuse for people who start selling on Amazon, and for it not to work for them, for them to blame it on their competition. Blame it on too many sellers. Nobody likes to quit. But if the main reason they quit is out of their control, then it’s easier to stop selling on Amazon, because there’s just too many sellers and not enough customers. So, I quit. Except that’s not true at all.

Look at these facts. Amazon is the number one shopping destination in the world. Over 60% of all online shoppers on the planet start on Amazon compared to anywhere else. Not Google, not anywhere else. It’s Amazon. Another stat, when buying something new to a customer, meaning they’ve never bought it before, nine out of 10 customers price check a product on Amazon before buying. Another stat according to Jungle Scout, despite inflation concerns, seller profitability is up for 2023. This was a question that they asked all of their users and their seller profitability has been up in 2023. So, there are Amazon sellers who are doing extremely well with selling on Amazon in 2023.

[00:06:59] REBECCA: So, when someone says Amazon is saturated with too many sellers, they’re basically saying that since Amazon has too many sellers, no one could make a sustainable profit selling on Amazon. For example, if there are too many people in a restaurant, that restaurant is too crowded for everyone. If there are too many people in the swimming pool, that pool is too crowded for anyone to have fun. If there are too many sellers, it’s not possible for anyone to make good money. Except we know that’s not true.

[00:07:24] STEPHEN: Yes. Here’s my take on that question. Is Amazon saturated with too many sellers? It’s yes and no. That’s my answer. Does that surprise you? Does that shock you?

[00:07:33] REBECCA: That’s the shocking answer you came here to hear.

[00:07:36] STEPHEN: Yes, it depends. I believe Amazon is saturated with too many amateur sellers. But Amazon can definitely take on more professional sellers. And when I say amateur or professional, especially professional, I’m not referring to the way Amazon differentiates between individual sellers who pay 99 cents per sale, and professional sellers who are doing the $40 a month seller fee. I mean, Amazon can definitely take on more and more sellers who treat their Amazon business as a professional business, who know exactly what they’re doing.

So, if you’re a seller on Amazon, and you’re thinking of starting and you want to stand out and learn the ins and outs of actually becoming a professional business seller on Amazon, the kind of seller who successfully sells your items consistently on Amazon, who’s able to make a full-time income selling on Amazon. Then I want to invite you to a free five-day online workshop called The Amazon Income Accelerator Workshop, where we’re going to show you how to realistically make a full-time income selling on Amazon in 2023. You can sign up for it for free, fulltimefba.com/workshop and signups are open right now as you are listening to this.

[00:08:43] REBECCA: This free online workshop is going to be great so you don’t want to miss it. We’re going to show you how to find unlimited sources of inventory to sell on Amazon to get consistent profits. How to make the best inventory sourcing decisions like what to resell, what to pass on, how deep to go on a buy, how to always have profitable inventory in stock. As well as, the full-time income success path and how you can realistically snowball your Amazon profits. There’s so much more but those are the highlights.

Again, the link to the five-day online workshop is fulltimefba.com/workshop. So, is Amazon saturated? Yes. Amazon is saturated with too many amateur sellers. But Amazon is not saturated with quality professional sellers who know what they’re doing and know how to make a full-time income selling on Amazon. You can know how to do this too by attending our free workshop. The link one last time is fulltimefba.com/workshop.

As always, we have the links for you from this episode at our show notes for the episode, at fulltimefba.com/183. The links will include the reports that we mentioned, that have all the stats that we were covering earlier from Amazon, and it will also have a transcript of this episode. Fulltimefba.com/183 because this is Episode 183.

[00:10:08] REBECCA: Next week on the show, we’re going to be discussing bad habits of unsuccessful Amazon sellers. So, let’s make sure you don’t have these habits and help you overcome them if you do. We’ll see you next week on The Full-Time FBA Show.

[OUTRO]

[00:10:23] ANNOUNCER: That is all for this episode of The Full-Time FBA Show. So, head over to fulltimefba.com/podcast where you will 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 have learned today so you can find success at turning part-time hours into a full-time income with Amazon FBA.

[END]