Destroying the hoax about swarms of new sellers making Amazon FBA saturated.
The Amazon FBA saturation hoax that won’t die
Last week I was on a webinar discussion with 100 or so other FBA sellers. Someone said something I’ve heard at least once a week in the six years I’ve been selling via Fulfillment by Amazon.
It’s a myth stated endlessly on every forum.
It a myth repeated as fact in many blog comments.
It a myth propagated everywhere Amazon FBA sellers congregate.
What this hoax sounds like
“Have you noticed all the new FBA sellers flooding the market with cheap books?”
“I hate it how Amazon FBA is so saturated now.”
“With all the lowball FBA sellers who have jumped into Amazon the last few months…”
“Now that all the new sellers have taken over recently…”
People are obsessed shouting to the heavens that we are in the midst of “a FBA seller invasion”… and “Amazon FBA is saturated” and we’re all doomed.
I heard it in 2011.
I heard it in 2015.
I heard it in 2020.
And I heard it 3 days ago.
Here’s how the Amazon FBA saturation story goes
In its many forms, the common denominators of this narrative are as follows:
- Tons of new FBA sellers have magically appeared.
- This invasion has occurred abruptly, usually about 90 days ago (hoax-spreaders of this have a weird fixation on saying “the last 3 months.”)
- These new Amazon sellers are flooding the market with cheap product.
- The consequence of these phantom FBA sellers is that there’s dramatically less room for profit (or none at all).
- Amazon FBA is saturated, our days as Amazon sellers are numbered, and we should all run for cover.
The truth of this rumor is never questioned. The only thing discussed is what the best approach to this crisis is, and how much longer FBA sellers have before we’re all out of business.
Where did all these new FBA sellers come from?
Nowhere, because they don’t exist.
(And even if they did, it wouldn’t matter.)
I’ve heard this “FBA seller invasion” story at least several times a month for six years. And guess what? We’re still here, making money.
Yet the sellers who are stricken with this bizarre belief probably aren’t so lucky, having frightened themselves right out of business.
The irony of this belief (that “a tidal wave of new sellers has stormed the gates and Amazon FBA is saturated“) is that it only serves to scare sellers away. Not a bad side effect.
So from that angle, it’s a pretty cool rumor. Maybe I should spend more time spreading it and less time here debunking it. But moving on…
Is the “new FBA seller invasion” totally baseless?
There is a noticeable influx of new FBA sellers in the years since I started. No question about that.
That’s happened over years, not three months. Not 12 months. Years.
Consider what it would take for there to be such a massive surge of new FBA sellers that it was noticeable within a 3 month (or even a 12 month) period.
- A new reality show about FBA sellers called “American Library Sale Pickers“.
- A huge mega-bestselling book on why everyone should sell on Amazon titled “The Four Hour FBA Work Week“.
- Beyonce charting with her new hit “Crazy in Love with Fulfillment by Amazon.”
I don’t think any of these have happened. And I think this belief is total delusion.
What is really happening?
It would be pretty easy to float some theories about the psychological roots of this.
The big one being: It’s easier to blame a phantom force than address why you’re not making much money on Amazon.
This isn’t a sweeping indictment of anyone who feels this like Amazon FBA is being saturated. Like I said, over a many-year period, I’ve noticed more lowball FBA sellers coming on board. But it’s not over a 12-month period. And it’s definitely not over 90 days.
Whatever its roots, the “collective Amazon seller subconscious” has given birth to this weird belief. And it seems here to stay.
The reality of whether Amazon FBA will get saturated
90% of selling on Amazon is simple and easy to explain.
Yet all the money is made in that last 10%. The part that everyone looking to “turn a quick buck” will fail to learn. The part that everyone hunting for a new internet profit scheme will never get.
Especially if we’re talking about selling books, I’m not worried about the masses “getting it.” There will be no FBA seller invasion.
There will be a lot of tire-kickers, half-steppers and part-timers. And we won’t even notice them.
A Long says
Like the great buffalo herds on the western plains, I can hear the thunder of the herds moving. The question is are they coming or going? Where’s my rifle?
I would not say the sky is falling, but the effects of seller fulfilled prime HAS caused some noticeable price erosion, especially with the sub $10 books.
Amazon is not sharing numbers, but somehow these select sellers who are able to offer “prime” while self fulfilling, are selling books for $4 and still making a small profit, whereas a normal FBA seller would lose money at this price.
This has caused prime offers that match MF offers in mass. The repricers cause many sellers to follow the lead of the mega sellers, and the effect is noticable.
Don’t get me wrong, there’s a lot to be optimistic about if you’re selling on Amazon. There are plenty of opportunities! However, I believe there are some real factors bringing prices down in an unnatural way.
Charles N Rutledge says
I would love to buy someone else out. I agree with you: no one will post an offer.
I often wondered about all the new sellers coming online. I have run other businesses, and owned a couple of others. Most new business go out of business very quickly. So, yes you will see lots of new FBA sellers coming online, but you won’t see the ones that drop out. So the net growth in new sellers is probably very very low. I have never worried about it, and won’t.
The main reason I don’t is I am constantly looking for doing FBA better. I see new ways all the time. i try something new every month.; Your stuff is great… I think I have bought everything you have published, and some stuff from most of the major other fba consultant types. My objective is to create things No one else is doing. I have created a couple. One example is i found a product the manufacturer is selling on amazon, but is not using FBA. I buy retail off their regular site, sell it FBA and make $4 per unit after all costs and shipping. Should i write a letter to them and tell them the should do FBA….. NOT! However, a new FBA seller has figured out the same thing and is now undercutting my price by a buck. It has cut my sales in half ( I did about 300 units in 2015). I am still making money at $3 per unit. I expect within a year there will be another who figures it out and almost all the profit will be gone. Not to worry. I am always looking for new things and finding them.
I have a poster on my wall with the single word: KAIZAN. It is the Japanese word for constant improvement. I look at it every day, and act on it every day.
Thanks for the inspiration.
I am going to check back to see what is for sale!
Jordan Malik says
Peter there were bright lights above my backyard last night. Thousands of 30-up labels (1″ x 2-5/8″) fell from the sky. I think the invasion hit this area. .
Great post (as usual). May I add some pointers for your readers?
Jordan when is the new podcast coming out? I’m jonsing!!! Thank God for you and Peter. You both are leading the way and making real positive differences in people’s lives. Thank you both for what you do.
Jordan Malik says
Steve thanks so much . AskJordan.net podcast episode 109 will be out any day now, but I’m changing the format (even shorter and more direct) and then by late May a 2nd new podcast series “Amazon Seller Software Reviews”, actually Peter is my first slotted guest and we’ll talk about his awesome ZenArbitrage.com
Nathan H says
I think that song is Adele, not Beyonce.
Mr. Know it All says
amd thanks for your contribution
The best way to prove whether the hoax is true or false is to look at statistics of the amount of sellers on Amazon. Where can one find or how can one estimate such statistics?
Second point: What is more relevant is the percentage of sellers to Amazon customers. So, is there any way to get or estimate the amount of customers?
If the amount of scanners is any indication than there is an increase in sellers. Of course they may be selling merchant. In my area, there is triple the number of people scanning at library sales and some of invaded my secret source. I do know that some sellers are paying people to scan for them, so that may account for some of the increase. Also, there does seem to be more listings for every book. The sky is not falling but it’s time to be creative if you want to be successful in this business.
With every new seller that joins FBA, isn’t there like a 100 new customers?