Why Amazon is poised to take more control of the ecommerce space


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In 2020 alone, online e-commerce in the United States grew 32.4%, to a total of $ 791.7 billion in online consumer spending. Part of the resulting effect is that online stores are increasingly capturing sales from physical locations, as consumers are expected to spend over $ 1,000 billion through digital retail channels in Canada. 2022. In addition, older consumers who had never done e-commerce are now connecting their needs, especially when it comes to health issues. And even after commerce returns to semi-post-pandemic normal, these people will likely continue to shop online.

Amazon is poised to carve out the lion’s share of these e-commerce gains. It simply dominates the online space, with Digital Commerce 360 ​​estimating that the business accounted for over a third of all ecommerce spending in 2020. The reasons are many, but include the confidence of buyers thanks to a “guarantee from A to Z”. , that its refund and return policies are standard, and one to two day shipping available to Prime members. In a 2019 Feedvisor survey of U.S. shoppers, 89% said they were more likely to buy from Amazon than other ecommerce sites.

Related: How to start a multi-million dollar Amazon business with less than $ 2,000

Interestingly, it’s actually the third-party sellers who will benefit the most from Amazon’s continued rise. The company is, in part, a platform for owners of third-party brands to sell their products, essentially the world’s largest mall. Amazon gets a discount, but most of the money buyers spend on the platform goes to third-party sellers, which range from big brands to those owned and operated by relative strangers. According to Statista, third-party sellers are Amazon’s main revenue generator for all of its retail sales. There is an incentive to help these brand owners make money because it is a win-win: the seller wins with a sale, Amazon earns through referral commissions to facilitate the sale, and the buyer wins to get the best product at the best value for money.

Another bankable asset for the Seattle-based giant is that when buyers trust Amazon, that faith transfers to the branded products often unknown to the consumers it sells (and which buyers can also rely on the reviews of. ‘Amazon to further validate product choices). In 2020, a survey published by Statista asked American consumers: “How often do you use Amazon to discover new products or brands? More than half of those surveyed said they used the site “sometimes” to do just that. An additional 23.6% said they use Amazon “frequently” to discover new products or brands. This means that hundreds of millions of buyers are open and buying new brands there, so the potential is huge.

Related: Why you should start (or buy) an Amazon Business achievement in 2021

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