Ep 2: How Many Amazon Businesses Survived the Coronavirus?

More Than a Third of Amazon Sellers Struggle to Keep Sales Consistent...

The Question

How many Amazon merchants are still active amid the coronavirus outbreak? Which sellers are performing the best?

The Short Answer

In early April, 36% of Amazon merchants that we sampled were inactive—an increase of 30% from two months prior. While the rate at which merchants are becoming inactive is slowing, the rate at which merchants are reactivating is also slowing. The biggest slowdown is coming from merchants with a smaller selection of products, suggesting that the fewer SKUs and brands you sell, the more likely you are to be negatively impacted by a crisis like COVID-19.

The Long Answer

From analyzing more than 200,000 third-party Amazon merchants, we determined that 28% were inactive in February. Two months later, that number rose to 36% total inactive accounts—perhaps as a direct result of Amazon’s freeze on non-essential items throughout March, or new shelter-in-place policies that disrupted some warehouses.

The below chart shows this progression based on merchants' 30-day feedback scores. The theory here is that if a seller sees zero new feedback within a given time period, then he/she is likely not making any new sales and is virtually inactive.

We also looked at how quickly Amazon merchants are getting back on their feet. The data suggests that merchants are recovering at a slower rate than they are losing business. In the below chart, blue represents active sellers, while green represents inactive sellers.

Between February and April, a good number of inactive sellers started seeing sales again (note the green segment going up into the blue). However, the band reflecting active-to-inactive merchants is thicker, indicating that more merchants are losing business between months.‍

Read Also: (Partner) ShipBob's "How to Manage Online Sales During COVID-19: Weekly Tips"

Which types of sellers are performing the best? 

To answer this question, we first looked at the catalog sizes of active merchants. From a previous study, we already knew that resellers are generally doing better than brands from having a wider, more diverse selection of products (and therefore being able to make up lost sales in other categories).

Today’s research further confirmed that sellers with more ASINs are generally weathering the crisis better. In fact, sellers with fewer than 2,500 listings are, on average, losing momentum in sales starting February, with those carrying fewer than 1,500 listings seeing the steepest drops. On the other hand, sellers with over 3,000 listings are seeing positive upswings.

Similarly, sellers with a larger variety of brands are doing better. Sellers carrying between 150 to 200 different brands are seeing a 25% or greater increase in activity, while those with fewer than 150 brands are seeing a decline.

Of course, the type of brands they carry also matter. Earlier in March, we discovered that categories like outdoor goods and pet supplies are seeing upwards of 500% sales growth online. Within the outdoor category, sales on hunting, camping and gardening gear are peaking.

Want us to dig up more data on your category? Let us know.

On the other hand, sales on more discretionary items like beauty supplies or consumers electronics are falling. We dug into this a bit further. By combing through more than 700,000 brands listed on Amazon, we discovered that entertainment brands are seeing an overwhelming drop in activity. Below are the top 15 brands with the worst drops in active resellers. Put simply, far fewer people (thousands to be more specific) are selling these brands on Amazon right now.

We’d assume that this has something to do with buyers purchasing fewer games, toys and movies while the economy or job market are in flux—and/or people turning to more streaming services or online games for entertainment.

Among this list are also a few baby brands like Carter’s. This drop is likely a result of Amazon limiting the number of sellers who can sell essential items, or sellers running out of inventory amid supply chain disruptions.

Have Any Feedback? Seeking More Answers?

Tucker and Paul (a.k.a. the Zentail Growth Team) are looking at the data to answer your burning questions about ecommerce. What's on your mind these days? Submit an anonymous request here.