Since 2015, Amazon has surpassed Sears and Best Buy and even Walmart as the most valuable retailer in the United States. The company is increasingly becoming the go-to for retail shoppers in every sector, even in areas where analysts believed online shopping could never thrive. (See #1 in our list below.)
For FBA sellers, knowing how is the Amazon marketplace is growing can make a big difference to your profits. With the upcoming holiday season in mind, we've done our research and found the top 3 rising sectors in the Amazon marketplace. We're excited to give FBA sellers like you an opportunity to assess your retail strategy and, if necessary, make smart pivots ahead of the busy holiday season.
#1 – Beauty products
Only a couple of years ago, everyone thought the brick-and-mortar had the beauty product industry on lockdown. After all, who’s going to buy makeup if they can’t try it on first?
Turns out, it’s millennials, along with everyone else who gets their beauty and styling tips online these days. Thanks to aggressive social media marketing from a thousand different cosmetic companies, customers are a lot less resistant to purchasing beauty products online.
Beauty products are a sneak-attack growth sector on Amazon. So far, the only people to notice it are stockholders in brick-and-mortar make-up companies like Ulta and Sephora. Their shares have been on the decline, while Amazon has been rumored to be making deals with high-end beauty retailers like Violet Grey.
We talked in the last post about how Amazon's entrance into the grocery market makes customers hang around on the website longer. Cosmetics and beauty products function in the exact same way. If customers come to your Amazon store for a Christmas present for their nephew, but notice a gorgeous eye shadow or moisturizer that is perfect for that fancy holiday party, you're just a click away from doubling your revenue from that sale.
Love infographics? Check out this nifty chart from OneClickRetail:
#2 – Consumer Packaged Goods (CPG)
We talked in the last post about how FBA sellers can profit from Amazon's grocery market disruption. But even before Amazon bought Whole Foods, the consumer packaged goods market was steadily spiking in third-party Amazon stores. According to Fortune,
“Sales of consumer packaged goods (CPG) grew 42% in 2015, outpacing the growth of total e-commerce’s 30% increase.”
Items like laundry detergent, toothpaste and even pet food were some of the biggest earners on the Amazon marketplace last year. Close behind were things like soap, facial moisturizer and natural energy drinks.
Obviously, CPG is an awfully big category. The key to making this growing sector work for you is curating items from that huge catch-all category that fit with your brand. So if you sell beautiful imported housewares, try adding a few related items like fine boxed teas and coffees. If you sell workout wear, offer those natural energy drinks as an add-on item.
#3 – Lawn and Garden
Another huge surprise for the analysts. Yes, people really are turning online for their outdoor-related purchases. You can again thank the millennials for this shift:
“Young homeowners have grown up with the internet and are significantly more eCommerce-literate; as a result, they are more likely to think of Amazon before they think of Home Depot when shopping for their lawn and garden supplies and consumables.” (Source: OneClickRetail)
This adds a whole new array of products that can fit into almost any FBA store. Items like outdoor decorative lighting, bird feeders, furniture, gardening supplies and seeds, even appliances like tillers and pressure washers…all of these are being purchased in increasing numbers on Amazon, and there's no reason why customers shouldn't be purchasing them from your store.
The Bottom Line
Profit planning is about more than just using your income wisely. It's about assessing the opportunities to help your income grow. Get a jump on your holiday season and find some low-risk ways to test out these Amazon categories on the rise for their ability to build your profits. Worst case, you make a few extra holiday sales. Best case, your store gets a new lease on life in the coming year.