The 2022 Trends Report reveals that conventional wisdom in e-commerce—like avoiding heavy paid traffic or relying on Amazon—is no longer valid. E-commerce operators are seeing greater success by adapting to new strategies such as optimizing for high gross margins and low overhead to make paid advertising profitable, and prioritizing DTC over Amazon. The report also highlights that while AI adoption is high, it has yet to translate into direct financial gains for businesses.
Key takeaways
Don't shy away from paid traffic; businesses with high gross margins (63.7%) and lean overhead (16.6%) are growing net income 71.7% faster with significant ad spend, despite lower average ROAS (2.5x).
Re-evaluate your reliance on Amazon; its share of revenue has fallen to 2017 levels, and DTC-primary operators are experiencing 65% faster revenue growth and higher gross margins compared to Amazon-primary peers.
Focus on optimizing product economics and overhead to improve net profit margins, as gross margins are at an all-time high (49.5%) but net margins are at an all-time low (10.6%).
Avoid owning a warehouse if possible; businesses that lease or outsource fulfillment grow revenue significantly faster (33.5% and 22.2% respectively) compared to only 3.9% for those with owned warehouses.
Approach AI adoption strategically; while 72% of stores have adopted AI, it hasn't translated to financial advantages and non-adopters are actually growing profits faster (55.3% vs. 32.7% net income growth).
It's been a wild few years in eCommerce, so I was super excited to sit down and go over the results of our fourth-ever eCommerce Trends Report for 2022. The results were eye-opening, and there were some pretty interesting takeaways about what is working in eCommerce, what's not working, what trends are emerging, and what the general lay of the eCommerce land looks like. In this episode, I'm going over four of the most surprising takeaways, including the best model when it comes to having a strong competitive advantage, pricing tactics that almost always work, and why ROAS is less important than we think. I also discuss something that we saw for the first time ever with Amazon and how really effective branding and marketing played out in the numbers. You can find show notes and more information by clicking here: https://bit.ly/3uyQCbX Interested in our Private Community for 7-Figure Store Owners? Learn more here. Want to hear about new episodes and eCommerce news round-ups? Subscribe via email.
What does this episode say about paid acquisition?
Don't shy away from paid traffic; businesses with high gross margins (63.7%) and lean overhead (16.6%) are growing net income 71.7% faster with significant ad spend, despite lower average ROAS (2.5x).
What does this episode say about amazon & marketplaces?
Re-evaluate your reliance on Amazon; its share of revenue has fallen to 2017 levels, and DTC-primary operators are experiencing 65% faster revenue growth and higher gross margins compared to Amazon-primary peers.
What does this episode say about supply chain & operations?
Focus on optimizing product economics and overhead to improve net profit margins, as gross margins are at an all-time high (49.5%) but net margins are at an all-time low (10.6%).
What does this episode say about finance & fundraising?
Avoid owning a warehouse if possible; businesses that lease or outsource fulfillment grow revenue significantly faster (33.5% and 22.2% respectively) compared to only 3.9% for those with owned warehouses.
What does this episode say about paid acquisition?
Approach AI adoption strategically; while 72% of stores have adopted AI, it hasn't translated to financial advantages and non-adopters are actually growing profits faster (55.3% vs. 32.7% net income growth).
