Third-party merchants selling on Amazon hit record numbers
The online retail giant released a few details about sales by partners on its site, suggesting big gains in the lucrative business.
Seattle Times business reporter
Typically secretive Amazon.com offered a glimpse into its business of selling items on behalf of other retailers and, not surprisingly, the data suggests the online giant and its partners did quite well in 2013.
Amazon said that the more than 2 million Marketplace Sellers, those third-party vendors whose items are available alongside Amazon’s own merchandise, sold more than a billion units worldwide. The company said those sales totaled “tens of billions of dollars.”
Amazon declined to be more specific. And even though the company described the data as “record-setting,” it didn’t offer comparable numbers for 2012. So it’s unclear how much the Marketplace business is growing.
But Citigroup analyst Mark May noted in a research report that the smattering of data Amazon released suggested “incremental value” in his financial model for the company. That’s because the service fees Amazon receives from third-party sellers range from 14 to 40 percent of the purchase price, and account for between 10 and 15 percent of its total revenue, May wrote.
Amazon also noted that the number of active sellers who use its Fulfillment by Amazon service, in which they send inventory to Amazon to warehouse, pack and ship to customers, grew by more than 65 percent worldwide in 2013.
And the company said the number of Fulfillment by Amazon shipments worldwide grew by more than 50 percent during the holiday season compared with the 2012 period.
As lucrative as the third-party-seller business is for Amazon, it’s not without controversy. Last year, some merchants filed a class-action lawsuit against Amazon, alleging the company violated Washington state law by holding some sellers’ money for more than 90 days.
Some sellers have also complained to the state attorney general, accusing Amazon of arbitrarily withholding payments and suddenly shutting down accounts.
Jay Greene: 206-464-2231 or email@example.com. Twitter: iamjaygreene