Amazon released a report that stated proudly, “more than 20,000 small and medium-sized businesses worldwide on Amazon surpassed $1M in sales in 2017.” There are more more than one million of these businesses. Let’s just say for a statistical analysis that it’s at 1 million. So that means that 2% of sellers exceeded 1 Million in sales in 2017 and it’s actually less than 2 percent because there are more than a million sellers.
As sellers, it’s easy to feel like we “should” be selling multiple millions on Amazon, but what this report says overtly, is that Amazon supports small business, but what’s really happening is that small businesses are supporting Amazon! For some, who want essentially a lifestyle business, one that supplements an income or provides a good replacement for a job, selling with a decent ROI at less than a million is a fine benchmark, but for those who want to create a bigger business, one that supports several employees and has scalability, it’s vital to venture beyond Amazon.
With about half their sales coming from third party sellers, the fact that only 2 percent of these companies are hitting the million dollar benchmark tells you how hard this business is to scale. When you combine that with the risk of Amazon being able to arbitrarily shut down an account for little reason or allow illegal counterfeits and bad actors to manipulate the system against their competition, the message of caution and the need for diversification is even greater.
Venturing into other marketplaces, growing internationally and building a sellable asset are difficult but worthwhile goals. So, does that fact that 2% or less of sellers exceed 1 million in sales empower you or is it a wake up call to look beyond? What are your thoughts?
By the way, we have quite a few members of Scanner Society that do sell over 1 million dollars per year! So, if you want to hang out with them, and grow together in a non competitive, affiliate marketing free, and positive community, try us out for just $5 for the first month. Or join our mailing list to stay up to date on the latest news and updates.