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Sales Velocity is Dropping! Why? And What Can You Do About It?

Sales Velocity is Dropping! Why? And What Can You Do About It?

Vasil Videnov Vasil Videnov
Articles
21/12/2021

You have enough inventory. Your replenishment arrived on time. Your listings are optimized. You continuously spend on ads. You maintained your ranking. You are always retail-ready. So, why are your sales dropping?

As the iconic Star Wars phrase goes, “I have a bad feeling about this.”

Amazon sellers are in a complicated situation and have a much lower year-end/Q1 2022 sales forecast.

A disturbance in the force we feel.

As true Amazon Jedi, we felt this disturbance get worse as we progressed into Q4. As an agency, we feel the pulse of Amazon through many accounts selling in different product categories and niches.

What is happening on Amazon? What are the reasons behind the continuous disruption in sales?

The sad truth is that search velocity is dropping. And dropping fast! 

The search velocity for the top-selling keywords for some of our best-performing products dropped as much as 50% compared to the same time period last year. This means that people are searching a lot less than they did in 2020. 

Less searches = fewer sales.

Amazon’s Q3 report is down only 1.5%. What they fail to mention is that this number includes a 33% increase in AWS earnings!

This means the actual AMZ marketplace is down WAY more than 1.5%. Amazon probably registered a deficit for the quarter.

What do these numbers tell us? Are consumers returning to pre-pandemic spending habits? Do consumers miss buying in physical stores? Is this a passing fad, or will it last until 2022?

We are not sure where this is all going. Inflation, logistics, and manufacturing are not on our side, so brace yourselves. The questions are piling up, and the answers to the questions are not yet clear. 

So how the heck should you tackle this situation? 

 

Time to review your selling process. 

Here are a few insights that you can look into to accelerate sales:

  1. Supply chain issues will continue in 2022. Analyze your catalog, clean up your data, and review your forecast. Review shipping timelines based on the current situation and secure funding for buffer stocks.
  1. Diversify fulfillment. Explore temporary storage outside of FBA; be better positioned with FBM in place. Easily shift between FBA and FBM to ensure on-time fulfillment of orders.
  1. Be strategic with your ad spending. Balance is the key.
  1. Drive external traffic to your Amazon listings that are well stocked. Boost your sales while building your brand. This helps ensure that you are ahead of the competition.
  1. If the dark side is stronger than your strategies, tap a reputable agency to help you thrive in this unstable market.

The coming months and years remain a mystery, but Amazon sellers are resilient. The insights above are controllable and, with proper planning, will bring your business forward.

 “May the force be with you!” in 2022! And as always, Hyperzon is here to help if you need it.

 

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