Looking at Amazon, it’s not hard to be impressed by its scale. But how big is it? How many sellers are succeeding there? Is there still room for growth and, maybe, room for you, if you haven’t started selling?
Amazon founder and CEO Jeff Bezos revealed some interesting stats about third party sellers on Amazon around the world in his recent letter to shareholders.
Bezos says in the letter that 50% of items sold on Amazon are not sold by them: “We took two big swings and missed – with Auctions and zShops – before we launched Marketplace over 15 years ago. We learned from our failures and stayed stubborn on the vision, and today close to 50% of units sold on Amazon are sold by third-party sellers.”
He also said: “Marketplace is great for customers because it adds unique selection, and it’s great for sellers – there are over 70,000 entrepreneurs with sales of more than $100,000 a year selling on Amazon, and they’ve created over 600,000 new jobs. With FBA, that flywheel spins faster because sellers’ inventory becomes Prime-eligible – Prime becomes more valuable for members, and sellers sell more.”
But what about future capacity and opportunity for sellers? There’s still plenty of space and massive capacity for growth but as it gets bigger it will get harder on margins. But it’s impossible to estimate when saturation will come.
How do you feel about selling on Amazon right now? They’re hard task masters but buyer enthusiasm seems strong. Is Amazon going greta guns for you?
4 Responses
Amazon is a scary monster. They recently started stocking a large range of products from one of our main brands and immediately our sales dipped. 6 months ago Amazon was way above our Ebay sales and now it is not even half. It is also very obvious that on Amazon it is mainly the cheapest price that gets the sale.
My advice is to make Amazon a platform you have to sell on, but don’t need to sell on if that is even possible.
Also, the claim of 70,000 sellers doing more than 100K per year, is that a big number ? Seems lower than I would have expected.
Agree with Darren, 70,000 doing more than 100k seems a tad low to me.
We always keep in mind that Amazon may start selling what we sell, so keep to our stocking strategy, so when they do, we not left with an excess of stock or not too much that we can wait it out till the supplier is unable to supply.
We had a call from their FBA team once and the product they most thought would be suitable for FBA due to the amount of sales over the previous month was a product that Amazon had just got in themselves and i had not had a sale for a week.
Lee
Amazon is a monster best handled with those big rubber gloves and a long stick as it can turn and bite you in a split second.
The main problem with marketplace selling is the eternal two horse race between Amazon & eBay.
We all know both have strengths and weaknesses and eBay is becoming more like Amazon daily rather than the auction marketplace it used to be.
What really needs to happen is a 3rd credible player enter the arena who could emulate the best bits from each competitor. Rakuten had big promise and went on a buying spree acquiring 3rd party companies to emulate Amazon but it’s not happening in the West for them it seems for now.
In the short-term it looks like Amazon will start to fight it out at country level certainly with high street retailers and maybe online regionally if one of the big players like Tesco, John Lewis, Argos or Walmart (Asda) expand or add marketplace capability.
I can’t help thinking that the bigger Amazon grows more and more scrutiny and sanctions will we applied at Country level clipping its wings globally.
Saying that we do OK at present with both marketplaces but there is something to be said for eBay not being a retailer for all its other faults.
Be wary of FBA promises though, don’t forget your best selling products are being delivered by your suppliers directly into your competitors warehouse making it easy for Amazon to source products and if its good enough for you it is going to be good enough for Amazon to sell the same product leaving you renting space for your now slow moving stock…
Remember the priority for the ‘buy window’ is 1. Amazon Retail 2. FBA 3. Marketplace