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If Amazon was down for 24 hours, how much money could be redirected to small businesses?
Data highlights how 15 million Amazon Prime customers might spend their money if Amazon UK suffered an outage
Amazon is the world’s biggest online retailer. The marketplace’s sheer volume of products, seemingly unlimited choice and low prices, mean it’s easy to see why 86% of people in the United Kingdom shop at Amazon.
During the UK’s national lockdown, Amazon continued to dominate sales across many product categories, with the retail giant reporting that sales rose by 51% in 2020, helping the company make £19.4bn.
Whilst Amazon’s profit soared, on the opposite side of the spectrum, our Q1 2021 business distress index reported that 713,000 SMEs were in significant distress, a 15% increase on the previous quarter in 2020 when the pandemic was still at its peak. In the same quarter, there were 12,557 business insolvencies, despite the government providing financial support to help keep companies afloat whilst they weren’t able to trade.
One silver lining of the widespread economic downturn for most UK businesses was the rallying community support towards local businesses - with reports of conscious efforts to shop increasingly at smaller and independent businesses following the tough post-lockdown period. But, with the convenience that Amazon offers, it is still tempting to order via Amazon Prime for those next day - and occasionally even same-day - delivery items.
Which begs the question… What if Amazon UK had an outage and consumers were forced to shop elsewhere with smaller, independent businesses?
We know that a recent outage cost Amazon $34 million when its global site went down for 59 minutes. So, Real Business Rescue has conducted research to find out how much money could be spent with small businesses if Amazon UK was down for 24 hours.
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How much could Amazon UK lose if it was down for a day?
For retailers that transact online, every minute that your website is down can impact your bottom line. So for the likes of Amazon, this could quite literally translate to millions of lost revenue.
Using Amazon UK’s 2021 net sales figures and survey data of UK consumers’ purchases from Amazon over the last year, Real Business Rescue were able to quantify the potential loss of revenue across core UK product categories if the retail giant was unable to transact for 24 hours.
According to the calculations, £2,769,462,736* could be lost in daily sales. To put this into perspective, the annual turnover of all UK SMEs in 2021 was £4,449,170 - that’s a fifth of what Amazon’s revenue is from core product categories in just 24 hours.
Imagine how much spend could be redirected into small businesses if consumers didn’t shop on Amazon for 24 hours?
How much money could be spent at smaller, independent businesses if Amazon UK was down for 24 hours?
Real business Rescue surveyed 2000 UK consumers to select which types of products they have purchased from Amazon UK in the last year.
Astonishingly, more than a third (36.4%) bought books from the marketplace. Followed by 30.8% buying toys and games and 30% purchasing home and kitchen products. Real Business Rescue then took these percentages and worked out how much daily revenue is generated across 26 core product categories on Amazon’s UK site.
Using our survey data, 36.4% of respondents said they purchased books from the online marketplace, which equates to £244,521,988 of Amazon UK’s daily sales of books. Annually, this totals £89,250,525,627 which could be redirected to smaller booksellers.
The product category with the second-highest number of purchases by survey respondents is toys and games. 30.8% of those surveyed said they bought these items in the last year and using the same calculations, Amazon netted £79,320,960,064 annually and £206,336,362 daily - in just 24 hours, small toy retailers could benefit from over £2 million.
In third place, is the home and kitchen category with 30% of survey respondents saying they had made purchases of these items over the last twelve months. As a percentage of Amazon’s 2021 sales data, this equates to £77,305,643,335 driven annually and £200,976,976 in a day just from these types of products.
Whilst we’ve all purchased and continue to purchase products from the retailer, thanks to the convenience and speed of delivery, the numbers go to show just how many smaller businesses might benefit from Amazon being down for as little as 24 hours. In fact, our recent survey of workers revealed that 78% are planning to shop more independently than before the pandemic to support small businesses, so we know that the UK wants to support smaller companies.
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Taking Amazon UK's total annual sales data from 2021, Real Business Rescue calculated the average sales Amazon UK makes weekly, daily and hourly. To find out how many daily sales are generated across Amazon UK’s core product categories, Real Business Rescue asked 2000 UK residents to select purchases they had made from 26 of Amazon’s core product categories over the last year. Paired with the category purchases survey data, Real Business Rescue was then able to calculate annual as well as daily revenue from key product categories. This data together means Real Business Rescue could determine how much revenue could be redirected to small, independent businesses in a single day if Amazon UK's site had an outage.
*£2,769,462,736 is the total sum of all daily revenue that could potentially be lost across all 26 product categories included in Real Business Rescue’s survey.
A full data set can be found here
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