🎉 2024 Unveiled: 50 Expert Predictions

Here are the five most common predictions for e-commerce in 2024:

1. Resilient Brands Gain Market Share: In the face of economic challenges, resilient brands that have weathered the storm will move more to convergence online and offline realms.

2. B2B E-Commerce Growth: B2B e-commerce is predicted to outshine direct-to-consumer (DTC) and B2C as the new star of e-commerce growth.

3. One-Click Checkout and User Experience Improvements: The focus will be on enhancing the checkout experience. Brands and retailers will increasingly adopt technologies like Stripe Link and Visa Click to Pay.

4. Increased Integration of E-Commerce in Social Media: Social media platforms are expected to integrate more e-commerce functionalities, allowing users to make seamless purchases directly within their favorite apps.

5. Rise of Vertical Fintech Unicorns: The fintech sector will see the emergence of "vertical fintechs" — industry-specific SaaS companies with embedded lending and payment modules.

💰 BILLION DOLLAR STRATEGIES

Quantum computing could replace AI as the most important - and dangerous - new technology in e-commerce & beyond

The race is on between China/Russia/North Korea/Iran and the West. The first to achieve quantum computing at scale could create a new world order.

Currently there are only three companies capable of producing leading edge technology chips: Samsung, Intel and TSMC. Of those, only TSMC of Taiwan, a contract manufacturer, can reliably produce advanced AI and quantum chips.

The advancement of the entire world is dependent upon this company, and that’s one reason why China’s desire to bring Taiwan back into its fold is something to watch carefully.

That’s also why the US Government has placed restrictions on some of Nvidia’s IP and advanced chip technology, made by TSMC, from being exported to China.

As the world experiences rapid advancements in A.I, a new technological frontier is emerging right behind it, promising to reshape the landscape of cybersecurity, commerce, logistics and military strategy: quantum computing.

Quantum computing, a technology that allows for simultaneous calculations at speeds unfathomable to traditional computers, is moving from the realm of theoretical science to a near-future reality.

A computer solving a mouse maze is a perfect example of how quantum computing can look at everything at once. Instead of in a series of bits that are either on or off (1 or 0 state), it processes qubits (on and off simultaneously).

Check out the difference in speed of solving:

With today’s computers, deciphering a strong 14 character+ password through trial and error can take millions of years (reference the chart below to see how your current Amazon Seller Central password stacks up to hackers).

Quantum computing changes the timeline for cracking today’s encryption. By exponentially increasing processing speed, quantum computers could break the most advanced passwords and keys commonly used today in mere minutes.

Experts predict that within 4 years, quantum computers could outperform conventional systems in specific tasks, posing unprecedented threats to cybersecurity in industries as vital as banking and logistics.

Quantum computing has limitations in its current state, including its susceptibility to errors and the extreme temperatures required for operation. Yet, it is advancing fast and the potential of this technology to break through existing encryption methods and disrupt critical information infrastructures has put it at the center of strategic discussions.

As the world edges closer to this quantum leap, the race is on to develop new cryptographic techniques and security measures to safeguard against the formidable power of quantum computing.

Combined with A.I., the world is about to change more in the next 20 years than the last 3,000 years combined.

🛍️ AMAZON CONVERSION RATE AVERAGES 11.8%

Amazon boasts one of the best conversion rates in all of e-commerce at 11.8%, according to a study of November traffic by SimilarWeb.

The median conversion rate across all the sites they studied was just 4.3%.

There has been a lot of scuttlebutt about Temu emerging as an e-commerce powerhouse, but its conversion rate is less than half of Amazon’s at just 5.7%.

This is based on desktop web traffic that could be traced all the way through from initial visit to a purchase confirmation page and is specific to the US.

💸 HOW MUCH DID AMAZON SELLERS MAKE in 2023?

According to My Real Profit and Amazon statistics, about 50% of sellers on the platform make between $1,000 and $25,000 per month from sales.

Another 25% make between $25,000 and $250,000 per month, which translates to annual sales between $300,000 and $3,000,000.

Another 17% of sellers make less than $500 per month.

Less than 1% achieve more than $3 million in top line sales per year.

More than half (56%) of private label sellers achieve the average monthly sales of $5,000 or higher. Additionally, 35% of private label sellers experience a profit within the initial six months of launching their products on Amazon.

Although retail arbitrage is a cost-effective method for entering the Amazon marketplace, it ranks as one of the less lucrative options.

Nearly half (46%) took up to six months to see a profit using the retail arbitrage business model. Furthermore, 48% shared that the profit margins on their products are below 15%.

Over half of wholesalers on Amazon (61%) generate over $5,000 monthly. Additionally, 58% of sellers experience profit margins below 20%.

Ecommerce Jack recently posted on X what a realistic income statement looks like for an 8-figure/year FBA business.

This is what he shoots for:

Net Revenue (Post Returns): 100% 

Promotions: -1%
COGS: -26%
Gross Margin: 73%

AMZ Referral Fee: -15%
FBA Pick/Pack: -27%
Amazon Storage: -1.5%
PPC: -10%
Amazon Take Rate: -53.5% 

Post Amazon Fees Margin: 19.5% 

Payroll: -4%
Software: -1%
Warehousing: -3.5%
Misc: -1%
Interest: -1%
Operating Expenses: -10.5% 

Net Profit Margin: 9%

His company has done ~$45 million in sales over the past 4 years on Amazon.

But they are about to drop below the $0 in earnings threshold for 4 years of work. 

In that time, he has paid Amazon $24 million.

He admits some of that is due to his own error of ordering too much inventory during the pandemic.

He says Amazon’s strategy appears to be streamlining the supply chain to a point where it's just Chinese factory -> Amazon -> end consumer – with no room for anyone else in between (see story coming in Thursdays BDSN about this).

🤳 WHICH SIZE IMAGE TO USE?

Currently, about 80% of Amazon searches are mobile, but its conversion rate is lower than desktop.

When it comes to your main image on Amazon, you can use two different ratios.

Amazon advises at least 1,000 pixel size, but you should go higher (3,000 pixels) to preserve resolution for customer enlargement. Howard Thai of Elite Seller Society says that at 5,000 pixels you can prevent image hi-jackers in many cases.

According to Share It Studio, which ratio is better for your main image?

Consider the general shape of your product before choosing your ratio. If your product has a square shape, like a jar of cream, use the 1:1 ratio.

But if the majority of your customers come from mobile, you should use a 4:6 main image ratio for better visibility.

🎄 HIGHLIGHTS of CHRISTMAS EXPERIENCE

On December 13, over 320 e-commerce superstars gathered in Austin for a Christmas Experience like no other.

Produced by Kevin King, Amy Wees and Chelsea Cohen in association with David Gonzalez, the night was one that will never be forgotten.

Mark your calendar now. We’re doing it again with a Halloween Spooktacular on October 14 during the first night of Amazon’s Un-Boxed conference in Austin.

✌🏼 Here’s wishing you a great 2024!

Holler at ya again Thursday …

The answer to today’s STUMP BEZOS is
2 million keywords