Amazon has high competition and a complex phenomenon that is more than just a highly successful marketplace selling its items and enabling third-party vendors to use its platform to sell its products. This international severe technology company is leading in cloud computing, e-commerce, and artificial intelligence.
While Amazon enjoys a reputation as a world-leading economic and cultural force, the brand also sets the rules among its highest competitors. This company’s ownership of the e-commerce market is simply astounding. In 2020, its share of the US commerce retail market reached 47%, and by the end of 2021, Amazon was expected to hit 50% of the market’s gross merchandise volume.
Amazon’s closest competitor is Walmart, with a market share reaching 5.6% in 2020. Healthy competition is vital for market diversity, innovation, and consumer choice. While Amazon’s success remains undeniable, it allows its competitors to challenge its market dominance and provide alternate solutions to potential customers.
The Current Amazon State
Since its introduction, Amazon Marketplace has grown from what was initially started. To gain the proper perspective as an Amazon Wholesale seller, it would still be the country’s largest online retailer even if Amazon Marketplace were a completely separate company.
Nowadays, more than 300 million small-to-medium businesses and people sell through Amazon Marketplace. It accounts for 24% of all online sales. Overall, Amazon holds a significant share of around 40% of online retail sales in the US and considerably in other regions, such as Europe and Asia. Amazon is so dominant that it would take combining the following five mass-market retailers to equal its size. Starting as an Amazon Wholesaler at this time can be challenging but certainly possible.
In addition to e-commerce, Amazon has ventured into cloud computing, with AWS becoming the leading provider in the global cloud computing market. Amazon Prime Video is also the worldwide dominator of digital streaming, offering licensed programming and digital content. As Amazon’s popularity grows rapidly, more than 89% of US buyers prefer buying products from Amazon to other e-commerce platforms.
Competitors In the E-Commerce Space
With Amazon being the leading giant in the e-commerce industry, it faces competition from several major players in the field who aim to take dominance one day. Plenty of businesses operate like Amazon and make huge profits selling their products. To succeed as an Amazon Wholesaler, you should be both informed about Amazon’s competition and their work. Let’s take a look at them and see how they can compete.
Walmart is one of the largest corporations globally, with more than 11,000 physical department stores across 27 countries. It competes with Amazon’s retail subsidiaries in many locations, placing a wide range of products at low prices.
Alibaba is a Chinese multinational company founded in 1999 by Jack Ma. They have subsidiaries operating under the parent companies, such as Alibaba.com, Taobao, AliExpress, and Tmall. Alibaba.com is a B2B marketplace and the flagship subsidiary of the Alibaba Group. It operates the same way as Amazon in buying products in bulk and reselling them for a profit. Also, Alibaba.com provides businesses with direct access to manufacturers so they can help them avoid middlemen and save on price.
On the other hand, Tmall, Taobao, and AliExpress are B2C e-commerce operations. They compete with Amazon to sell low-cost clothes, electronics, and gadgets.
eBay is a vast platform that directly competes with Amazon for online sales. eBay’s revenue has taken a hit recently, with 2020 as the best revenue year with $10.2 billion. Retailers list their products on eBay, and customers buy them on the marketplace. The critical difference between eBay and Amazon Wholesale sellers is that eBay sellers can auction items or apply a fixed rate. The ability to bid on products and easily connect with sellers makes eBay a great platform to buy products. It also ranks higher than all other Amazon competitors, with over a billion monthly visits.
Rakuten is a big Amazon competitor, especially in Japan. Rakuten’s services offer online shopping, banking and payment services, incubation and investment, and even a streaming service. The cash-back strategy of encouraging customers to buy its products directly on Rakuten instead of buying through brands earned them a revenue of over $13.6 billion in 2020.
How to Differentiate Yourself as an Amazon Wholesaler
Succeeding in this enormous marketplace can be very challenging. To perform better, you need to be informed about the competitive landscape surrounding you. After discussing the competition and the current Amazon state, it’s time to focus on the group that makes Amazon successful: Wholesale Sellers.
Whether you’re already in business or just starting in Amazon FBA, you certainly need to know how to differentiate yourself from the competition. That way, you’ll be able to reach more people, make more conversions and turn them into sales. So let’s go ahead and discuss what it takes to be a powerful Amazon Wholesaler.
Unique Product Selection
Carefully review your competitors’ product listings and offer a distinct range of outstanding products. While in the process, don’t forget to conduct market research to identify your niche. To stand out in the marketplace, use low-competition products that still hold customer demand. That way, you will attract a bigger audience volume and increase your chances of more sales.
It would help if you considered why someone would buy from you when they buy the same product way cheaper from another seller. But, while pricing remains important, it’s not just about offering the cheapest price. Be aware that you need to have profit also. To achieve profitability, you need to balance packaging, shipping costs, and the value-added services you provide.
Branding and Product Quality
Separating yourself from the competition means having quality products and unique branding that meet customer expectations. People want to be offered quality products and services with features that they appreciate. So, focus on eco-friendly products, sustainability, and ethical sourcing. Build a story and a whole brand around your products so people can associate your brand with their needs.