Amazon offers logistics at discount prices

Lower growth expected for Amazon’s Q1 2022

After Amazon published its results of the last quarter, the focus has already shifted to the current one: expectations for Amazon’s Q1 2022 revenue growth are down year-over-year for the first time since 2017. With uncertainty about current sales trends still reigning among online retailers, this benchmark should be a reason for many to breathe a sigh of relief though: Anyone who is targeting revenue figures that are higher than the ones from the first quarter of last year is likely in a very good position.

Amazon offers logistics services at highly competitive rate

Under the name “Amazon Global Logistics”, Amazon has already been building up a freight service for quite some time to enable sellers to ship their goods from China to the EU5 markets and the US. The service is soon to be expanded to include production locations in India, Vietnam, and Thailand. According to experts, Amazon’s market power allows it to offer transportation at much lower prices than other shipping companies.

Do Amazon’s private labels pose a threat to brand manufacturers?

Amazon offers thousands of mostly lower-priced products under its more than 100 private labels. Amazon’s most established categories are Electronics, Smart Home, and Clothing. Due to its low brand awareness, Amazon mainly relies on generic search terms for the ranking of its products, creating strong competition for brands that follow the same strategy. These third-party brands should consider positioning themselves more strongly against the e-commerce giant.

Number of sellers reaching $1 million in annual sales doubles

The number of sellers generating more than $1 million in annual sales on Amazon has doubled in the past three years, reaching now a total of more than 60,000. Although they make up only a small fraction of all Amazon sellers, they generate more than half of the seller revenue on the platform. Most high-revenue sellers sell on amazon.com – some of the largest are FBA aggregators like Thrasio.

Connected Health: Amazon’s interest in Peloton

After its stock price and reputation crashed in the past few weeks, stationary bike maker Peloton Interactive Inc. finds itself in the focus of potential buyers. Presumably allured by Peloton’s user data, Amazon is also showing interest in an acquisition. Peloton’s business model would seamlessly fit into Amazon’s approach to connected health services – a Peloton subscription could easily be linked to Amazon Prime, for example. Rumors about the potential deal have not yet been commented by Amazon.

European e-commerce is successful with the UK in the lead

According to Eurostat, the EU’s statistics office, 74% of European internet users shopped online in 2021. The highest percentage of online shoppers can be found in the Netherlands (94%). Looking at sales, the UK is the largest e-commerce nation in Europe: 21% of European online purchases were made there in 2020. According to a study by Statista, Germany will pass the UK as the European leader by 2025.

Is there a new Sponsored Ads slot on Amazon’s search results page? For some categories, we have discovered the sponsored module “Highly rated”, in which products appear that are particularly well and frequently rated. There is not (yet) a separate setting for this in the Advertising Console, it seems that this ad-module is still in trial. However, we were already able to make a first exciting discovery: For this ads-module also applies that a higher CPC has, as it seems, a greater weighting than the relevance of the number of reviews and ratings stated by Amazon.

Amazon released its Q4 2021 results two weeks ago. Let’s take a look at the most important KPIs and how to interpret them:

Amazon’s Q4 advertising revenuewas$9.7 billion (+32% YOY)

• For the first time, the company’s advertising revenue is specifically labeled in the report and not just summed up within the “Other” category. Now, we finally have the exact data for last quarter – and even some prior ones.

• Amazon’s advertising market share has substantially grown in recent years. In comparison, Facebook’s reported ad revenues of $32.4 billion in Q4. This means Amazon’s ad revenue is already almost 1/3 as big as Facebook’s.

Amazon’s 2021 advertising revenue reached a total of $31.2 billion(+45% YOY)

• We expected an advertising revenue of around $28 billion at the beginning of 2021. Amazon exceeded this by far!