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 2021, 56 percent of paid units were sold by third-party sellers.
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.
Amazon seller revenues
This magic formula has ultimately cashed in for Amazon, which has seen its net revenues multiply in recent years. In 2020, the e-commerce giant generated approximately 80.5 billion dollars in third-party seller services, an increase of nearly 50 percent over the previous year. While these figures are the product of orders throughout the year, a significant chunk is attributable to special offer and discount days. According to a survey, Black Friday is the shopping event driving the largest sales increase for Amazon sellers, followed by two of the company's own events, Prime Day and Amazon Summer Sale. In the context of the coronavirus pandemic, Amazon Prime Day played a particularly decisive role for small and medium-sized businesses around the world, many of which had to turn to online sales overnight in order to survive.
Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021
Share of paid units
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Amazon. (July 29, 2021). Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021 [Graph]. In Statista. Retrieved September 24, 2021, from https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/
Amazon. "Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021." Chart. July 29, 2021. Statista. Accessed September 24, 2021. https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/
Amazon. (2021). Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021. Statista. Statista Inc.. Accessed: September 24, 2021. https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/
Amazon. "Share of Paid Units Sold by Third-party Sellers on Amazon Platform as of 2nd Quarter 2021." Statista, Statista Inc., 29 Jul 2021, https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/
Amazon, Share of paid units sold by third-party sellers on Amazon platform as of 2nd quarter 2021 Statista, https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/ (last visited September 24, 2021)