For entrepreneurs looking to make moves on the Amazon stage, exciting opportunities are taking shape on the horizon—many of which we’ve never seen before. In our comprehensive report, we analyzed the landscape of the online retail industry to create actionable insights for Amazon merchants in 2022.
So, who are the winners, and who are the losers? The answer is not so simple. Through the challenges of COVID-19, global supply chain disruptions, inflation, and countless other obstacles, our report uncovers valuable strategies for growing your Amazon yearly profit in times of uncertainty and ongoing change.
The State of the Amazon Seller
It’s safe to say that the life of an Amazon merchant is never dull. Amazon saw big traffic increases at the beginning of 2020, but this surge was only temporary as consumers returned to brick-and-mortar stores. COVID drove an 87% traffic surge to Amazon throughout 2020 that lasted up to January 2021. Since then, however, Amazon has experienced a slight decrease in traffic as the offline world started its slow but steady reopening.
This led to many merchants making higher-than-attainable fiscal goals for the year—and reminding us that the financial impacts of a global pandemic weren’t over yet.
Adding to this pressure, we also saw every link in the supply chain impacted, making it even more difficult for companies and business owners to hit their financial growth targets. Reduced access to materials, fewer ships and ports, increased demand, and limited supply meant long-term changes for both merchants as well as consumers.
While 2021 was certainly a challenging year for growth, several initiatives came to life that Amazon sellers can buckle down on in 2022.
Our report looks at Amazon and other e-commerce giants websites’ data to determine key trends in 2021 and how those might impact sellers in the new year.
The size of the marketplace grew significantly—now boasting more than 1.5 million active sellers (up 541K from 2020)—allowing consumers to have more decisions when making purchases online.
Adding to this expansive marketplace, now more than 75 million products are sold on the platform across 19 international marketplaces. It’s evident that Amazon remains to be the leader by a long shot.
Market Share of Leading Retail Ecommerce Companies in the U.S.
One thing’s for sure: Amazon is a staple of consumerism and has been a household name for years. Sellers can take advantage of this trusted platform that will continue to grow and reach more customers as it continues to innovate.
At the time of this report, we have valuable revenue stats for the majority of 2021 up until the end of quarter three.
While Amazon’s annual net sales are expected to exceed the previous year, the extenuating factors of the ongoing pandemic, supply chain shortages, and other concerns caused these numbers to stagnate after early 2021.
With that said, Amazon continues to innovate its platform by appealing to a number of initiatives and strategies to survive and thrive in a post-pandemic economic climate.
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As the habits of consumers changed during this time, we saw Amazon bring new strategies to embrace and enhance the ecommerce experience. Here are a few of the key developments that took place.
Investing in Infrastructure
Amazon doubled its warehouse network in 2021, adding more fulfillment centers to accommodate the growing demand for its products. However, with staffing shortages, global supply chain disruptions, and the ongoing machinations of COVID, these issues are predicted to take several years to resolve.
Nevertheless, infrastructure is in place to meet future demands, and sellers should lean in by identifying profitable products to bridge the gap in the meantime.
Curated Brand Experiences
Personalizing and creating branded experiences on the Amazon marketplace was a fascinating trend that emerged in 2021. Amazon added and expanded a host of new features that included:
- Launching the Brand Referral Bonus Program
- Adding more “Follow” button placements across Amazon
- Making it easier for shoppers to locate and shop by Brand Stores
- Adding the “Manage Your Customer Engagement” tool for limited email marketing
- Adding Amazon Posts to more placements
- Adding Product Targeting option to more ad types
- Migrating capabilities to Sponsored Display Ads that were previously exclusive to Amazon DSP
What does this mean for Amazon merchants? It means more control over how your brand looks, feels, and is presented to the consumer. This makes for more meaningful purchase decisions and brand awareness opportunities that could in turn make for loyal customers for years to come.
People Choose Amazon Instead of Ecommerce Sites
To benchmark Amazon’s traffic growth against the market, we’ve looked at the traffic stats of its 11 closest competitors.
Reviews, fast shipping, buy box preference, and the Prime badge remain key motivators for users making purchase decisions on Amazon versus a competitor.
Merchants should pay heed and find ways to reduce their shipping costs in order to provide these key sales benefits to their customers.
Top Sellers in 2021
Looking back at what products and categories performed best is a key factor for Amazon merchants in 2022. By analyzing keyword search results and trending products, our report uncovers the biggest winners on the ecommerce landscape.
Most Searched Products and Categories
It’s not too surprising that electronics, masks, and products related to working from home dominated Amazon search, according to Sellzone’s Keyword Wizard Tool.
But what types of products were the most searched in 2021? See the breakdown below:
Most Popular Products on Amazon in 2021
Using the Sellzone Keyword Wizard tool, we looked at the top 12K most searched products on Amazon and compared its month-over-month search volumes to see the most popular items and products. Here’s a breakdown of the Amazon product statistics by month:
It’s also no surprise that electronics were a clear winner across the bat. In fact, Apple alone claimed seven of the top 30 most popular searched-for items. In the same vein, pandemic consumer products such as office chairs, desks, masks, and home office supplies continued to be big winners in 2021. With the adoption of remote work, this trend is likely to become be a way of life for millions of consumers.
Amazon in 2022: Predictions for Success
What are some of the key themes that we’re seeing for 2022? Here are just a few of the big takeaways we uncover in our report:
- Supply chain issues to continue: Port congestion, combined with delayed delivery times will create a situation where a surplus of products is sitting with decreased demand. To avoid liquidation, sellers should look for ways to reduce shipping costs, better products to sell, and improved sourcing options.
- Amazon PPC (pay per click) cost to rise: We’re seeing it every year—the cost to advertise on Amazon is becoming both more expensive and more popular. Brands need to cut through the competition and create experiences that build trust for customers.
- Voice search will become more critical: How is your Amazon presence performing in voice search? With the increase in popularity of this search engine, sellers should make sure their listings are optimized not only for eyes but for ears too.
- Prices will continue to rise: Steven Pope, the founder of My Amazon Guy, predicted, “95% of Sellers will raise their prices TWICE in 2022. Cost of goods sold (COGS) is up, logistic costs are up, and so is the payroll.” His recommendation: “Sellers should stick to the basics of growing traffic through PPC and SEO, and conversion through merchandising and design all within Seller Central. Avoid anything that can be perceived as rank manipulation as Amazon continues to crack down.”
- New Amazon SERP features: Amazon continues to innovate its interface with SERP features that give sellers increased visibility in product searches. In 2021, it added Sponsored Products, Editorial Recommendations, Amazon’s Choice (Carousel), Top Rated From Our Brands, Sponsored Brands, Sponsored Brand Videos, and more. We expect these personalizations on the SERP to continue as Amazon seeks to improve the customer experience.Want to dig deeper?
We’ve only scratched the surface, but you can download the complete State of Amazon 2022 Report here. As the spirit of innovation is nigh at Amazon, here’s your chance to take advantage of it and build a winning retail strategy in 2022!