Amazon CEO Jeff Bezos recently revealed some interesting data about third-party sellers on Amazon's marketplace in his annual report to shareholders. Last year, external sellers accounted for 58 percent of all products sold through Amazon. It is worth a total of 160 billion dollars. EBay in particular seems to be suffering with a loss of 95 billion dollars in gross trade volume in recent years, exactly the growth of Amazon in the last four years. Amazon's external sales have increased by a quarter in those years.
Amazon exceeds Ebay
Amazon has succeeded in overriding parties such as eBay and attracting third party trade by investing a huge amount of money in the (business-to-business) customer experience.
Amazon has invested considerably in providing a superior online shopping experience. For example, with Prime which offers shipping within two days for more than 100 million items on Amazon's marketplace for a fixed annual rate. Amazon now has more than 100 million Prime members worldwide.
This graph from Marketpulse shows that the third party of sellers is growing fast:
The research shows that more than 500.000 third-party sellers have joined the Amazon platform so far in 2019. At the time of this publication, the figure will already be outdated as more than 3.000 new sellers enter the Amazon platform every day on top of the currently estimated 2,5 million total number of sellers on Amazon.
Advantages in Amazon Prime
Amazon has quickly extended the benefits of Prime to external sellers through the Fulfillment by Amazon (FBA) program. Amazon stores and ships items for sellers on its platform in exchange for a small fee. Not only is the program suitable for sellers, it also inspires customers to ensure that the item is properly stored and delivered quickly.
Amazon's huge investments in warehouses and shipping facilities have not always been a nice message to shareholders, but they see that it is good for long-term results.
Amazon continues to offer new tools for external sellers. Bezos pointed out in the shareholder meeting that the company's tools allow sellers to "manage inventory, process payments, track shipments, create reports and sell across borders."
Since the beginning of 2019, Amazon has launched 50 new tools and services for sellers, including brand analysis, worldwide registration for sales in multiple markets and e-learning content to help sellers improve their business.
The next big step for Amazon can be that the company will further develop the offering of its own shipping service as offering sellers more than just a marketplace was key to Amazon's success in attracting and growing third-party sales.