How Amazon and third-party sellers together give customers more choice
An important part of why we are able to give customers such a great experience is because the Amazon store is a single store made up of both our own first-party retail business and third-party sellers. Having many sellers in a single store means customers have a greater choice of products, get better value because there is healthy competition, and can easily compare offers and prices for the same product.
Ultimately, our business is based on the Amazon store as a whole succeeding, which means small businesses who sell on it succeeding, too. A customer’s choice to buy from Amazon retail, or from a third-party seller both contribute to that success, so long as they have chosen to buy from the Amazon store. This model is good for customers, sellers, and Amazon – it’s a win-win-win situation.
Thanks to more than 15 years of investment and innovation, small-and medium sized businesses on Amazon are thriving. Third-party sellers now account for around 60% of sales in Amazon’s store. Third-party sellers are growing twice as fast as Amazon’s retail sales, and on average an independent seller sale is more profitable to our business than an Amazon retail sale. So, making sure third-party sellers have the tools they need to succeed makes sense - it benefits our customers and makes the store more successful.
The global retail market is highly fragmented and varied, with international chains, local and regional retailers, brick-and-mortar stores and online shops giving shoppers choices no matter what they’re looking for. This includes those living in rural and remote communities miles away from the nearest physical store, who have far more choices today than in the past. In such a competitive environment, retailers must work hard to win the same customers—whether online or off. Part of this is making sure that the products people want to find are available. That is why it is important we make sure gaps in the selection of products available on the Amazon store are filled – whether that is by Amazon retail or third-party sellers.
Just like customers can choose to shop somewhere else, we know sellers can and do sell elsewhere, too. For example, in France and Germany, over 90% of sellers sell on at least one other channel. Although Amazon was among the first to invite third-party sellers into our store, Amazon is just one such hybrid marketplace, and for that reason we must constantly innovate on our sellers’ behalf.
Sellers now have dozens of choices for where they can sell their products and it is why we have to continually work to keep improving the experience of selling through Amazon. In Europe, we work with more than 900,000 independent partners, including selling partners, developers, content creators, authors, and delivery providers. In 2020 alone, we spent approximately €2.8 billion on logistics, tools, services, programs, and employees to help small and medium businesses selling on Amazon succeed.
Those investments include ensuring independent sellers have all the data they need to grow their business on Amazon. We have also launched over 250 new tools for sellers which have contributed significantly to sellers’ success and sales optimization. These include business reports and insights tools such as the Manager Account for advertising, and dashboards for Listing Quality and Account Health.
The shared success of the Amazon store is built on giving customers power to choose between more products being sold at more competitive prices by more businesses.
Our business has allowed around 185,000 European businesses to sell through our store, enabling them to generate tens of billions of Euros in revenues annually and to create over half a million jobs. We are working to continue to grow and expand the number of third-party sellers, with all the benefit that makes available to our customers and make sure that the success they have enjoyed over the last two decades continue into the next.
Learn more about our investments in Europe.