As CNBC notes: By the end of 2019, Amazon should account for 52.4 percent of E-commerce in the U.S.. Up from 48 percent in 2018, according to data from eMarketer. But who drives Amazon’s retail revenues. Interestingly, not Amazon itself.
Also see, How Dominant Is Amazon Online?
A New Look at Who Drives Amazon’s Retail Revenues
For this analysis, we turn to Business Insider:
“Recently, Amazon released a report detailing third-party merchants’ success on its platform. In summary, more third-party sellers bring in higher levels of sales on Amazon than ever. In 2018, more small and midsize businesses (SMBs) surpassed $100,000 and $1 million in sales on Amazon than in 2017.”
“The SMBs bringing in over $100,000 through Amazon reached nearly 200,000. After just 140,000 did so in 2017. And 25,000 SMBs broke $1 million in sales after 20,000 reached the milestone in 2017. This suggests more sellers find higher levels of success on Amazon. With average sales revenue for US SMBs from Amazon coming in at $90,000.”
During 2018, third-party sellers generated $160 billion in revenues. Compared to $117 billion by Amazon itself. Yet, at Amazon, this actually means good news:
“Enabling third-party sellers to bring in significant sales could inspire them to sell exclusively on Amazon. Then, they may focus all their efforts on the marketplace. And forgo selling on their own sites or other marketplaces to maximize their Amazon performance. This Amazon pseudo-exclusive products.”
“Amazon can charge for services like Fulfillment by Amazon (FBA) that facilitate merchants’ success on the marketplace. U.S. SMBs using FBA saw their exports double in 2018. As such, the service becomes more attractive to sellers. By charging for participation in programs like FBA, Amazon profits off third-party sellers’ sales.”
“Being able to point to the success of third-party sellers on its marketplace helps Amazon allay concerns about it being a monopoly. Government officials in several countries show interest in investigating Amazon’s status as a monopoly. Furthermore, showing that other sellers perform well on its marketplace may help Amazon dodge any regulations.”
To see the growth of third-party sellers at Amazon, view the image.
