Covid-19 has made a dramatic shift in consumer shopping behavior. It has also boosted the confidence of online retailers to grow their brands exponentially.

Amazon sellers have experienced enormous growth in the pandemic. Almost 64% of new sellers are profitable on Amazon within the first year of selling. Every three out of five existing sellers explained that their profits have increased after covid-19.

The above stats attract the attention of a lot of investors in the FBA (Fulfillment by Amazon) model for getting benefits from the growth of Amazon. Investors realize that a lot of money can be made by acquiring scalable Amazon FBA brands.

Amazon FBA Acquirers/Aggregators are jumping into the market with huge funds, buying profitable FBA brands. To date, more than 10.9 Billion dollars collectively has been raised by these companies since April 2020 (according to modernretail). Such as Thriso, Perch, Berlin Brands Group, SellerX, etc.

While this surge has provided great opportunities for small brands, it has also created a lot of challenges for independent sellers and new entrants.

What are the challenges for independent sellers?

There is now more competition than there ever was. Sellers who have chosen to operate independently will face huge competition from brands operating through aggregators’ portfolios.

Now, these brands have access to advanced data analytical software for quick scaling in a specific niche. While at the same time independent sellers will face problems in achieving profitable brand growth, due to limited funds and supply chain issues.

Other challenges for individual sellers are still there such as limited funds for advertising, un-efficient spending on available advertising budget, failure to offer innovation in new products of the brand portfolio. Analysis shows that there is one reason for all these problems: “inaccessibility to advanced growth related support”. 

Most aggregators prefer to acquire established brands in specific categories. So, for getting a maximum valuation from aggregators you have to be a leader in your product category.

Here is a list of actions, which are stopping you from becoming category leader.

• Limited Funds:
  Most Amazon sellers are self-funded, for growth they have to reinvest monthly profits to buy the next inventory. Because of this, they struggle in gaining positive cash flow.  
• Lack of industry expertise & Resource:
  Most Amazon FBA sellers don’t have access to advanced product data and expertise because of this, they struggle to grow their brands on Amazon, as it needs to grow.
• Supply chain and logistics :
  Independent sellers don’t have a system in place for support of their supply chain and logistics and because of this they struggle to keep their products in stock.  

What’s the hack here for turning these challenges into opportunities?

Competition is great if you know how to create your space.

• No more Un-efficient PPC spending:

Advertising on Amazon always has the potential of boosting sales and increasing brand’s profit. For gaining maximum on PPC you always have to check wasted spend. Especially in the current competition. 

Experienced advertisers always identify wasted spend and use this money for more customer acquisition in the right way. Efficient PPC spending will increase the organic growth of the brands on amazon.

Correction of advertising spend will help you to maintain a good ratio between organic and PPC orders. The best way to scale a brand is by maintaining a profitable ratio between organic and PPC orders.

Effective Supply chain management (SCM):

In order to stay ahead of the competition for your Brand on Amazon, there’s a real need to strengthen and create a flexible supply chain.
Here is the list of Action for strong Supply chain management,

• Demand Forecasting
• Manufacturing
• Inbound logistics
• Outbound logistics
  

In current circumstances, if you cater to the above issues, your chance of success on Amazon is 50% higher.

Don’t Compete on your own!

As the common saying is , “if you cannot beat them, then join them”

So, you have to stay ahead of the competition. For this, you need support of data analytical systems and especially amazon advertising experts.

For that, you don’t need an aggregator to access all advanced analytical tools. We at Zelevate provide all this support to amazon sellers.

Schedule your consultation call or send us a message to get your free brand audit today, and see how you can further grow your business.