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Third-party seller share of Amazon platform 2007-2020

Amazon not only boasts a hugely successful online retail platform but also a thriving digital marketplace which is seamlessly integrated with the main retail shopping experience. In the second quarter of 2020, 53 percent of paid units were sold by third-party sellers. In 2018, nearly three-quarters of Amazon seller businesses had between just one and five employees.

1P and 3P Amazon sellers

There are many ways of selling on Amazon. Firstly there are first-party (1P) vendor sales, where vendors send their inventory to Amazon, who in turn control the pricing and include “ships from and sold by Amazon.com” on product listings. The benefits of 1P sales on Amazon are wholesale purchases from Amazon, priority selling and brand trust through Amazon’s credibility as a seller. Amazon also permits third-party (3P) sales on its marketplace. Both individuals and professional sellers can sell on Amazon Marketplace. When it comes to order fulfillment, possible options are Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Items are displayed as “sold by MERCHANT and Fulfilled by Amazon / Fulfilled by MERCHANT”. 3P sales are a popular strategy for sellers to make up for certain 1P sales disadvantages, namely improved margins through better pricing control, more favorable payment terms and less reliance on the relationship with Amazon. According to a 2018 survey of Amazon sellers, almost half of all businesses generated 81 to 100 percent of their revenues from Amazon sales.

Amazon seller revenues

In the end, all of this benefits Amazon. In 2019, Amazon generated 53.76 billion U.S. dollars in third-party seller service revenues, up from 42.75 billion U.S. dollars in the previous year. Seller-service revenues account for the second-largest revenue segment of the online retail platform, after retail product sales and ahead of Amazon Web Service revenues.

Percentage of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2020

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Source

Release date

July 2020

Region

Worldwide

Survey time period

Q2 2007 to Q2 2020

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Statistics on "Online marketplaces"

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