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  • Ridgeline Insights

Six-Month Review of Our 2023 Amazon Predictions

We predicted that 2023 would be another set of waves in which every business would need to find a balance to stay afloat. Although the thesis holds true, some of our specific predictions weren’t exactly spot on. We pride ourselves on transparency with our partners and make sure to relay the bad news or misses faster than the good news. We’re going to take the same approach to our 2023 predictions, calling out where, and how, we missed the mark.

“People will buy what they need at a decent price. If your products are optional purchases for many consumers, you’ll see a dip in demand…”

Not really. Sure, lower-priced products may have a higher sales velocity on a daily basis, but for the most part that has always been the case. In 2023 we have seen products on the higher end of the price scale actually sell through very well so far. In many cases these types of brands and products are seeing YOY growth on Amazon. Many of our partners with higher-priced, widely distributed products, are seeing Amazon as one of the brightest spots in their business so far this year.

“The next prediction we will make is that supply chain constraints are still going to be a concern.“

It would be hard to make a blanket statement for all brands across various industries and say that this isn’t true, but we are more often seeing brands not concerning themselves with supply chain constraints because they have too much inventory. Over the last few years, most industries went through the stages of high demand and not enough inventory, purchasing large amounts of inventory but not being able to receive it in time, and now all that inventory is available but a lack of demand in other channels outside of Amazon.

“With less demand for some product categories, we predict that advertising costs will continue to rise.”

Yes, this is true and it will probably continue to be the truth. Brands are leveraging Amazon and its advertising platform more and more. With that, the average cost per click continues to tick up each year. The bright side is that it is still viewed as cheaper than Social or Google ads by most advertisers.

“We will see successful Amazon-only brands transition to having a stronger off-Amazon presence.”

Generally speaking, not yet. Brands with an established retail presence are seeing down months in many brick-and-mortar retailers, making it even more difficult for a new brand to break down that barrier.

Overall, many of our predictions held true, but not necessarily on Amazon as many brands in our experience continue to outperform and the marketplace has been one of the few bright spots in 2023 so far for many brands.



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